SAP announced its intent to purchase Clear Standards, a promising start-up funded last year with $4m first round.
Large companies usually wait for market leaders to clearly establish themselves before making a purchase, and investors want to let the start-up grow in order to maximize exit price. This may be a cost effective move for SAP to buy a development team and a handful of customers, and for investors to make a quick return on their initial investment. Undoubtedly the new Board Member and CEO, Betsy Atkins, played a decisive move here. While price was not announced, we surmise the deal comes with a strong earnout and performance component.
At this time, it's unclear what this means for the development priorities. Surely SAP is focused first on shoring up its offering for its installed base of customers considering solutions, so we expect that at least for the next 12 months, the Clear Standards product will be focused on deep SAP integration.
Are more acquisitions waiting to happen? We are doubtful, but one never knows. The market may be still way too small for Oracle or IBM to make a purchase.