Just after SAP announced its plan to acquire Qualtrics, I shared my thoughts about the news. I felt a little like a coach giving a pep talk before the first game of the season — training, educating, and winding up the players, then hearing the game bell and watching the fun begin.
Except in this case, the players on the field are our customers, analysts, journalists, partners, and employees. Ideally, they were poised to play the game in the same way it was envisioned when constructing its playbook — with pride, exuberance, and wide-eyed anticipation.
It’s been one week since “game time.” It’s probably comes as no surprise that I’m a proud coach and eager to share my play-by-play reflections.
The response from the capital markets was quite positive: Even though SAP share price fell on the day the deal was announced, the decline coincided with a day the NASDAQ fell by almost three percent, the shares recovered as analysts have weighed in with support. As Kirk Materne of Evercore wrote: “While the multiple obviously appears high on the surface, we believe Qualtrics is a unique combination of growth (52 percent in 2017, >40 percent forward) and strong unit economics… Overall, we believe this is a smart strategic deal for SAP longer-term.”
As I’m writing, our shares have we have already recovered most of the under-performance relative to the wider market.
As the days progressed, more people came to understand our vision and reinforced our exuberance. Most of the analysts and investors recognized the immense potential for experience management to become an exciting new growth category. Most also see the potential benefit for our customers in combining experience data gathered from employees, brands, products, and customers with operational data in order to act decisively and quickly. It was terrific to read journalists like Adam Lashinsky at Fortune and Richard Beales at Breakingviews, in a piece that also ran in The New York Times, praising the deal’s mutual benefits.
Those who understand that experience management is exceedingly more comprehensive than what today’s customer experience software provides also innately sense its transformative value. Josh Greenbaum of EAC Associates put this in perspective when he told me: “There’s not a lot of understanding of data at this level. It’s a great opportunity to educate the market.”
I add Josh Bersin to the “get it” group too,based on his thoughts: “If SAP can pull this off, they could build a set of tools that help every company behave like Amazon; deliver real-time feedback to managers about customers, prospects, and employees – in an actionable and useful way. That market is probably 10-times bigger than the “survey” market, and it leverages SAP’s expertise in data management, infrastructure, and enterprise solutions.”
What was most rewarding for me? Seeing the reaction on the home field. Being at our company headquarters in Walldorf at the time of announcement afforded me the chance to host “coffee corners” in our canteen. In a “tell it like it is” culture, I was prepared for a mix of healthy and unfiltered honesty. I got nothing less than unbridled excitement!
Believe me when I say this sense of excitement is not limited to Walldorf. SAP employees around the world are inspired and elated at how the addition of Qualtrics supercharges their imagination and the potential benefits that await customers.
Need proof? Let me tell you about a chat exchange on a call with more than 3,000 employees in the Cloud Business Group that went a little something like this: “I used Qualtrics at a former company, but felt they struggled to use the insights in a measurable way. This acquisition solves that because we have the opportunity to embed this data in our clouds and services.” A colleague promptly responded, “Acting on customer, employee, and partner feedback is the whole key to listening to them — to listen without acting is a poor experience.”