Continuing its strategy of acquiring specific technology to strengthen its own software portfolio, SAP said today that it is buying Virsa Systems, Inc., a developer of software to enable companies to comply with such regulatory requirements as the Sarbanes-Oxley law. Terms of the deal weren't disclosed.
Founded in 1996, Fremont, CA-based Virsa offers the Continuous Compliance suite of software products for regulatory compliance. Virsa claims more than 300 enterprise customers, including manufacturers in such sectors as aerospace and defense, chemicals, consumer products, high tech, and pharmaceuticals.
SAP has been reselling Virsa's Compliance Calibrator product, part of the Continuous Compliance suite, since March of last year as part of its mySAP ERP product. SAP Ventures, SAP's venture capital arm, along with Kleiner Perkins and Lightspeed Venture Partners, have been the investors in Virsa. Former Oracle president Ray Lane, a partner in Kleiner Perkins, is on the board of Virsa.
In an interview in New York today, SAP Americapresident and CEO Bill McDermott said the acquisition of Virsa is consistent with SAP's overall three-part growth strategy. That strategy consists of organic growth, co-innovation on SAP's technology platform, and what he called "tuck-in" acquisitions.
Last year, SAP bought Lighthammer Development Corp., a developer of manufacturing intelligence software, and TomorrowNow, an applications maintenance and migration services firm that specializes in JD Edwards and PeopleSoft applications. SAP also bought two companies in the retail software space, Triversity and Khimetrics, after failing to acquire Retek, a large retail software company. Retek was bought by rival Oracle.
McDermott said SAP decided to acquire Virsa in part because regulatory compliance has become a "big issue for C-level executives" since the passage of Sarbanes-Oxley and other regulations. "We were only selling [Virsa's] flagship product [the Compliance Calibrator], not the whole suite," McDermott said. "Now we get the suite and the people, and we need the people. Most importantly, we get the thought leadership."
McDermott said that Jasvir Gill, CEO and founder of Virsa, would remain with the company, as would other key members of the Virsa team.
He added that since the March 2005 re-seller agreement, SAP and Virsa have sold about 150 licenses of the product, with about one-third of these in manufacturing.
Virsa's Continuous Compliance suite consists of four products. They are: the Compliance Calibrator, which provides real-time assessment simulations, remediation for ERP user authorization risk, and what is called detective segregation of duties (SoD) analysis; Firefighter, which provides compliance-focused emergency access administration; Access Enforcer, which provides automated user access, request, approval, and compliant provisioning; and Role Expert, for enterprise role definition, documentation, and change control.
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SAP said it expects the acquisition of Virsa, which has about 250 employees, to be completed in May.
Separately, McDermott said that there are 400 companies in the "pipeline" for its Safe Passage program, which is designed to encourage users of applications acquired by Oracle, including those from the former JD Edwards, PeopleSoft, Siebel, and Retek, to migrate to SAP software.
On March 20, SAP said that more than 200 companies have taken advantage of the Safe Passage program to date.