SAP and Hybris Plot New Strategies Together as Commerce Evolves

8/7/13Follow @jpruth

Even a doggedly independent entrepreneur can have a change of heart. Ariel Luedi, CEO of hybris software, scoffed at the very notion of selling his company—until he did just that. “Early last year I said ‘Only over my dead body would I let SAP buy us,’” he says. “That’s where I was at that time.”

Yet on Tuesday, Luedi smiled alongside his new compatriots at SAP’s New York offices in Greenwich Village during a press event to discuss their plans to break down old conventions of commerce.

In June, Luedi’s e-commerce software company, which has U.S. offices in New York and Boston, agreed to be acquired by Germany’s SAP. The deal, completed on Aug. 1, put Swiss-born hybris—a plucky developer of platforms for managing customer relationships, Web content, and data—in the hands of a massive enterprise software company.

After yesterday’s press event, Luedi told me his prior resistance to making a deal faded once he got to know SAP a bit better. “In my head, SAP was a very conservative monster company doing enterprise internal process optimization,” he says, which may be important but not the most exciting sector to be in.

Getting to know SAP’s leadership offered him a new perspective, though. Luedi says SAP wanted to function more like a racing boat speeding toward innovation rather than a big ship. “They asked us to help change the company and get fresh DNA in there,” he says. That is why hybris operates as an independent business within SAP, he says, instead of simply being absorbed into it.

Luedi’s desire to grow his company while maintaining its identity actually put him on the path to making the deal. During the first half of 2013, he planned to file for an initial public offering for hybris as the means to remain independent and grow. After word of Luedi’s intentions got out, suitors brought up the idea of acquiring the company.

Those conversations gave Luedi a moment of pause. “I learned that my romantic notion of independence by being a public company was probably flawed,” he says. Weighing the regulatory rigors he would face, such as reporting to the Securities and Exchange Commission, led him to rethink his plans. Furthermore, the potential suitors hinted they might buy hybris, on their terms, the moment its shares dipped.

Rather than be at the mercy of the public markets, Luedi wanted to pick who would take hold of hybris. Signing on with SAP also gave him the chance to work with its HANA database technology to improve customers’ experiences in e-commerce.

Mark Ferrer, chief operating officer of SAP’s global customer operations, says HANA can be found in retail, wholesale, distribution, and manufacturing yet the hybris platform offered additional features, making the deal a natural fit. As commerce grows, he says, SAP sought to further its reach as well. “We had a big piece of the foundation but we didn’t have that next step out to make that customer [connection],” Ferrer says.

The acquisition of hybris, he says, deepens SAP’s role in the business-to-consumer realm. Ferrer says commerce companies want technology that helps them understand and interact with consumers across multiple channels including mobile devices and computers and in brick-and-mortar stores. “We’ve been transforming SAP over the last three to five years” he says, “now all of these technologies are starting to converge.”

SAP and hybris on Tuesday illustrated some of the innovations they are pushing for wider adoption. With the help of software the companies have in play, a consumer might capture information—via smartphone—about shoes in a window display in the real world, share the images and details online with friends, and receive alerts if the item goes on sale at retailers near his or her location. Luedi believes it’s possible to further tailor the customer experience through technology such as his to fit individual interests and needs. “You need a platform that allows you to experiment and change quickly,” he says.

João-Pierre S. Ruth is the editor of Xconomy New York. He can be reached at jpruth@xconomy.com and followed on Twitter @jpruth. Follow @jpruth

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