Qualtrics, which makes most of its money from subscriptions, is ahead of SurveyMonkey in terms of size and pace of growth. It also generated more revenue than SurveyMonkey during the first half of this year. Qualtrics’ customer base includes several leading companies like Microsoft (MSFT), Kellogg (K) and Mastercard (MA).
Qualtrics is the second largest acquisition to-date for SAP
SAP, which has a market cap of $128 billion, has been expanding its cloud business for a while and is looking for new product and growth opportunities as it tries to reduce its dependency on desktop software. The company has made a couple of acquisitions over the past few years, including the purchase of Callidus at the start of 2018, but Qualtrics is its second largest one to-date.
The acquisition provides both companies with significant benefits along with the opportunity to move into customer relationship management. Qualtrics has the potential to provide value to SAP and its customers as a whole new business division but it also faces the risk of having its wings clipped as it becomes part of a larger organization.
Several technology companies have made major acquisitions this year with the largest one being the purchase of Red Hat (RHT) by IBM (IBM) for $34 billion.