| Abstract: | Enterprise software leader plans to incorporate Pilot Software's products into its NetWeaver Business Intelligence platform. |
| Keywords: | SAP, acquisition, Pilot Software, corporate performance management, business intelligence, strategy management, CPM, BI, Lighthammer, PilotWorks, C-level, scorecards, dashboards |
In a move to enhance its business analytics offerings, enterprise software purveyor SAP AG has acquired Pilot Software, a specialist in corporate performance management technology.
The deal, which SAP closed last week for an undisclosed sum, adds to SAP's portfolio a product called PilotWorks, which allows C-level executives and other managers to monitor a business's progress against its strategic goals.
PilotWorks is sold as either an integrated suite of products or as standalone modules. Business functions enabled by the suite include operational reviews, strategy assessment, scorecards, dashboards, and workflow processes for entry and approval and configuration and modeling.
In its current state, PilotWorks has a horizontal bent, but that is slated to change.
"What we will do is work both with partners as well as with our... industry business units to start layering this application into a number of different verticals," said Sanjay Poonen, senior vice president and general manager of SAP's Analytics business.
In an interview with Managing Automation today, Poonen said SAP was attracted to Pilot Software in part because PilotWorks' applications server was built on J2EE, which he said will make the technology "very easy" to certify and integrate with SAP's SOA-based NetWeaver Business Intelligence platform.
The acquisition of Pilot continues SAP's strategy of acquiring small companies that it can use to strengthen its overall product portfolio. In December 2006, for example, SAP acquired Factory Logic, a small developer of software for lean manufacturing scheduling and supply synchronization.
Today, echoing the language the company used when it purchased Virsa Systems in April 2006, SAP officials referred to the Pilot deal as a "tuck-in" acquisition. Other such deals have included the June 2005 purchase of Lighthammer Software Development, a provider of manufacturing intelligence and collaborative manufacturing products, and the acquisition of Frictionless Commerce, a supplier of e-sourcing software, in May 2006.
Poonen described Pilot's technology as both complementary and unique to SAP's existing offerings. "We're looking for technology that lets us leap-frog the state of the market and... champion a new product category, and that's what we're looking to do with Pilot." In this case, he said, the nascent category is performance management.
"I think this is an example of where you're starting to see the big vendors take some of these new markets — like performance management, analytic applications — seriously," Poonen said.
John Hagerty of AMR Research praised the move in a research note today, saying that the products "look very promising and fit well into SAP's articulated vision."
Pilot maintains 150 customers, with accounts in verticals such as food and beverage, high tech, financial services, and retail. Between 20% and 30% of those accounts are also SAP customers, Poonen said. That presents an opportunity to sell PilotWorks to SAP's installed base, he noted. In a similar vein, Poonen pointed out that Pilot had seen success in selling to non-SAP customers, "and that's part of the appeal, too," he said.
Prior to the acquisition, Pilot was privately held by Excelsior Venture Partners III, a private equity fund managed by U.S. Trust; G-51 Capital, a venture capital firm; and individual investors. After a somewhat storied history that began in the 1980s with a focus on enterprise information systems and included stints as a subsidiary of Dun & Bradstreet and Accue Software, Pilot was reincarnated in 2002 as a strategy management company.
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