|By Maureen O'Gara||
|December 19, 2011 08:45 AM EST||
Salesforce.com is taking a step outside its core contact management cloud and into very social, cloud-based human capital management (HCM) with its announcement Thursday of a definite agreement to buy three-and-a-half-year-old Toronto-based Rypple on undisclosed terms.
Apparently Rypple completes the hand that salesforce CEO Marc Benioff is going to play. At least that's what he told Reuters.
Salesforce will be turning Rypple over to its new EVP, advanced applications and now head of what will be a new HCM unit John Wookey, who joined salesforce last month.
A provocative hire, Wookey used to work at Oracle, responsible for its next-generation Fusion applications, then jumped to SAP, which he left last spring, running its on-demand software strategy for large enterprises. Need anybody point out that Oracle and SAP are salesforce's biggest competitors?
SAP, as it happens, just agreed to spent $3.4 billion buying SuccessFactors, which is also in the HCM game, and, as it happens, salesforce means to re-launch Rypple as Successforce. Bet SAP's lawyers are having a think about that.
Aside from building out Rypple, er, Successforce, Wookey is supposed to take the widgetry and embed some of its features like stroking and feedback into existing salesforce products including Chatter, Sales Cloud, Service Cloud and the Force.com platform.
What Rypple does is "help managers and employees improve performance through social goals, continuous feedback and meaningful recognition." Such real-time reinforcement includes customizable "merit badges."
With a global workforce increasingly going social, it's supposed to replace the traditional annual performance review with a painless, "social and collaborative approach so people know where they stand and are accountable for achieving their goals."
Companies such as Facebook - which evidently introduced Benioff to Rypple - Spotify, Rackspace, the newly public Jive Software and Mozilla use Rypple. Reportedly the start-up has 350 customers and offers some services for free. The Wall Street Journal said Facebook and Spotify have contributed key development suggestions.
The transaction is supposed to close by the end of April. Salesforce does not expect the acquisition to have a material impact on its FY13 revenue. It said it will initiate EPS guidance for fiscal 2013 on its fourth-quarter conference call in February.
Rypple collected $13 million in venture between 2008 and 2010 from Bridgescale Partners, Edgestone Capital Partners and angel investors including PayPal co-founder Peter Thiel and former eBay COO Maynard Webb, now chairman of LiveOps. At some point, the Journal said, it got some financing from salesforce. Acquisition talks date to whenever that was.
Rypple is the second Canadian cloud start-up to get bought this week. Cloud pioneer Enomaly is getting picked up by Virtustream.
Salesforce said nothing about Rypple co-founders and co-CEOs Daniel Debow and David Stein, who previously started Workbrain, an enterprise software company they sold in 2007 to Infor Global Solutions for $227 million. Perhaps they're on to their next kill.
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