SAP Expands Mobile Enterprise Foothold By Acquiring Syclo

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SAP (NYSE:SAP) has announced its plan to acquire Syclo, a SAP partner and a leading provider of enterprise mobile applications and technologies, for an undisclosed sum. Syclo has clients in industries such as utilities, oil & gas, life sciences and manufacturing. This acquisition will add to the growing list of SAP mobile solutions for enterprises. [1] SAP competes with players such as Oracle (NASDAQ:ORCL), (NYSE:CRM), IBM (NYSE:IBM), and Microsoft (NASDAQ:MSFT).

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Mobile Enterprise Market Push

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Syclo has a portfolio of products that provide enterprise mobility solutions. It caters to businesses that demand enterprise mobility on  smart devices such as tablets and smartphones. It has 600 customers in 39 countries, and SAP plans to integrate these customers under its SAP mobile platform. Enterprise asset management, field services, inventory management and approvals/workflow are some of the apps that may be of value to SAP. [2]

More Acquisitions In The Offing

We may see more acquisitions in this space by SAP in the near future. Businesses are moving toward providing more flexibility to employees in terms of access to enterprise information. This is driving the adoption of smartphones and tablets as a medium to check work-related information. Currently, this is not a major driver for SAP’s stock price, but as more SAP applications get deployed on the cloud, this may become a major source of revenue for SAP.

We currently have a $62 Trefis price estimate for SAP, which implies a discount of 6% to the current market price.

Understand How a Company’s Products Impact its Stock Price at Trefis

  1. SAP to acquire Syclo, Extends Leadership in Mobilizing the Enterprise, Sacbee, April 10, 2012 []
  2. SAP acquires Syclo, continues enterprise mobility push, ZDNet, April 10, 2012 []