SAP acquires Israel’s Gigya for $350 million

SAP SE (NYSE:SAP), a German multinational giant that specializes in developing enterprise software, recently announced the acquisition of a technology firm for the enhancement of its “SAP Hybris” e-commerce division.

The corporation acquired Gigya, a tech corporation that specializes on a web-based platform that offers customer identity management and profiling to online properties.

Even though the terms-of-agreement have not yet been disclosed publicly, rumors from the Israeli press are saying that the purchase took place for about $350 million.

Also, according to Zirra (a tech enterprise that focuses on company analytics), Gigya was estimated to hold a value of about $250 million during its last valuation after having obtained $35 million during a funding round that was headed by Intel Capital last 2014.

Gigya was originally founded in Tel Aviv, Israel and is currently based in Mountain View, CA.

Gigya over the years

The company had its roots as a social-media login platform that assisted online properties in managing customer profiles that are linked to their social media accounts.

However, just a few years back, Gigya started to consider the expansion of its services to include customer identity management features that can be used for e-commerce sites and other online properties.

According to the CEO of Gigya, Patrick Slayer:

“We actually think that there’s quite a bit of a transformation happening. We’re coming from this phase where third-party identities were about social logins, but we’re seeing that the very definition of identity is changing … to include payment, security, even leveraging hardware. In this new world, who are the players that matter? In addition to Facebook, it’s Amazon, it’s PayPal.”

Gigya’s expansion over the years was parallel with the trend of transferring cybersecurity and management services to the cloud due to the increasing capabilities of malicious hackers.

In fact, the company itself was a victim of a cyber-attack last 2014, where the Syrian Electronic Army used its platform as a backdoor for website-hacking.

Customer identity management

As of today, Gigya is currently managing about 1.3 billion customer identities from hundreds of websites that are owned by enterprises soon to be brought under the domain of SAP.

Israeli company Gigya (not pictured) deals with customer identity management and currently maintains nearly 1.3 billion customer identities. (Source)

SAP plans to integrate Gigya’s features into its e-commerce operations in order to help expand the variety of services that are available for its customers and to promote its services to Gigya’s clientele.

According to the president and co-founder of SAP Hybris, Carsten Thoma:

“Gigya brings a wealth of skills and expertise that will significantly enhance the SAP Hybris Profile solution and allow us to take leadership of the emerging customer identity and access management market. Consumer trust is the main currency to succeed for customer-driven organizations. This is what Gigya is known and recognized for.”

Gigya has about 300 employees that will be transferred to SAP once the deal would be finalized by the end of 2017.

Localization and cross-channel access

Another important attribute that makes Gigya’s “registration-as-a-service” platform useful for SAP’s acquisition is the localization feature that it offers.

This feature is essential to the expansion of SAP’s e-commerce operations due to different regions having varying compliance rules and requirements in the areas of both data housing and data protection.

In a statement that was published last September 24 in Gigya’s official website, Slayer mentioned:

“Combining the data matching and enrichment capabilities of SAP Hybris Profile with Gigya’s consent-based identity data and access management platform will allow us to identify consumers across channels and offer a robust single consumer profile.”

Slayer also went on to add:

“This is a vital step for digitalizing businesses because companies need to be able to draw accurate conclusions seamlessly across all channels, including web, mobile, in-store or connected devices, and the Internet of Things, as well as collect data about consumer preferences. Together we are well positioned to drive more effective marketing, sales, and service through data, while the customer stays in control of how much data is shared.”

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DISCLAIMER: This article expresses my own ideas and opinions. Any information I have shared are from sources that I believe to be reliable and accurate. I did not receive any financial compensation in writing this post, nor do I own any shares in any company I’ve mentioned. I encourage any reader to do their own diligent research first before making any investment decisions.

(Featured image by Vladislav Bezrukov via Wikimedia Commons. CC BY 2.0)