Salesforce.com Enters Human Capital Management Market with Rypple Deal

Salesforce.com (NYSE:CRM) has announced the acquisition of Rypple, a cloud-based social performance management software maker. ^[1] Rypple’s software enables employees to improve their performance using a social and collaborative approach. The company will relaunch Rypple as SuccessForce to mark its entry into the human capital management (HCM) software market, where it’ll be pitted against SAP that recently acquired SuccessFactors. Salesforce.com is one of the leaders in the cloud-based enterprise software market, where it competes with the likes of Oracle (NASDAQ:ORCL), SAP (NYSE:SAP) and Microsoft (NASDAQ:MSFT).

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Cloud-based customer software and other cloud computing offerings account for more than 90% of our $121 price estimate for Salesforce.com, which stands nearly 3% above the current market price.

Salesforce.com Enters HCM Software Market with Rypple Acquisition

The Rypple acquisition has provided Salesforce.com direct access to the HCM space, a market that also saw SAP making its entry into with the acquisition of SuccessFactors recently. Salesforce announced that it will be relaunching Rypple as SuccessForce, and while these two ventures may have similar sounding names, we think the re-branding is a conscious effort by Salesforce as it contends against SAP in the new market.

Rypple has various features such as badges, skills, goals and game mechanics to enable managers to improve team performance. It already has a large enterprise customer base including Facebook, Gilt Groupe, Kobo, Mozilla and Rackspace. Rypple’s features will also be integrated into Salesforce.com’s other cloud-based products like the Sales Cloud, the Service Cloud and Chatter.

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1. Salesforce.com Signs Definitive Agreement to Acquire Rypple, Press Release [↩]