SAP acquires the digital adoption platform vendor in a bid to expand its portfolio of applications that helps customers moving from on-premises infrastructure to the cloud.
ORLANDO, Fla. -- SAP has agreed to acquire digital adoption platform vendor WalkMe for $1.5 billion. The acquisition was unveiled on Day 2 of the SAP Sapphire conference.
WalkMe, based in Tel Aviv, Israel, provides a software platform that can help employees understand and use enterprise applications more effectively.
SAP expects to integrate WalkMe into its portfolio of applications that aids companies through transformations from on-premises systems to cloud systems ready to support technologies such as AI. That portfolio already includes Signavio, which SAP acquired in 2021, for understanding business processes; and LeanIX, which SAP acquired in 2023, for understanding an IT application architecture as a whole.
The WalkMe platform sits on top of an organization's IT applications layer and determines where users might experience difficulties such as getting stuck when performing a process or task. WalkMe then provides guidance and automated processes that help the user complete the task.
WalkMe currently supports SAP and other enterprise applications from Oracle, Salesforce and Workday. WalkMe will continue to support these applications, according to SAP.
WalkMe helps the user and the CIO
SAP acquired WalkMe because of its modern software that can help both users perform work tasks more effectively and CIOs understand what's working or not in a changing IT environment, said Rouven Morato, general manager at SAP Signavio and SAP LeanIX.
"In the cloud, there are so many changes happening all the time and innovations coming, such as AI," Morato said. "End users can't keep up, but the CIOs need to make sure the functionalities are adopted, because why should they spend a lot of money on AI capabilities if no one knows about them or uses them?"
The addition of WalkMe to a portfolio that includes SAP Signavio and SAP LeanIX is about the people side of transformation around change management, he said.
"It's taking the end user by the hand and explaining to them the why and the how of what's changing, and how it will affect their work," Morato said. "Value is not created because IT rolled something out or the process owner changes a process. It's created once the end user adopts the [application or the process]."
Currently, about 80% of WalkMe's business is with non-SAP applications, and it will continue its support because SAP recognizes the drive for a platform approach to business transformation across the IT environment, he said.
"If you have Salesforce for CRM and S/4HANA for finance, and want to have cross-application processes, you need to be able to manage both," Morato said. "We're putting WalkMe into a business transformation area that includes Signavio and LeanIX, which are both tools that also go across SAP and non-SAP applications."
Powerful combo possible, but value questioned
This looks like a win-win for both SAP and WalkMe. For SAP, WalkMe offers a sophisticated, premium digital adoption platform product that broadens the capabilities SAP currently offers with its Enable Now, said Gina Smith, a research director at IDC. For WalkMe, this deal will also broaden its reach significantly.
If well implemented, the combination of the three could be quite powerful.
Gina SmithResearch director, IDC
The WalkMe acquisition along with the previous purchases of Signavio and LeanIX makes sense when viewed as a package that allows SAP to address the people, process and tools issues around business transformation, Smith said. WalkMe addresses the people part of that equation, as the platform aims to help people adopt and master software faster.
"If well implemented, the combination of the three could be quite powerful," she said.
HR departments increasingly use digital adoption platforms for onboarding and training, and WalkMe can play that role for SAP, according to Mark Feffer, contributing analyst at 3Sixty Insights and editor of the WorkforceAI Substack.
"It makes a lot of sense in that respect, especially now where there's so much new technology coming out," Feffer said. "Training's going to be a problem, and WalkMe is a neat solution to that. Given the scope of SAP's platform, especially in the enterprise, this is a handy tool for HR and training and development to have."
The acquisition fits into SAP's push to create a more seamless and automated user experience that's informed by the principles of less friction and more AI, said Jon Reed, co-founder of Diginomica, an enterprise industry analysis firm. But, he added, it's questionable if WalkMe can retain value as more AI assistants are installed as user front ends.
"AI is already disrupting the user experience," Reed said. "As users get more and more usage interacting with a Joule-type assistant, I'm not sure WalkMe will retain as much value because it helps users navigate through screens."
Acquiring WalkMe now might be similar to when SAP acquired business intelligence vendor Business Objects in 2007, and then saw the whole BI market shift, he said.
"But WalkMe is working on a lot of that AI stuff already and how it interacts with users, so there may be some positives there too," he said.
WalkMe will continue to support non-SAP enterprise applications, but those customers might be concerned about the deal, and it could lead to legal clashes from other enterprise vendors over WalkMe data that SAP now controls, Reed added.
"It seems like everything is all aboveboard, but that's a lot of information that SAP's going to have access to," he said. "They'll likely put guardrails in place, and we'll have to see how that goes."
SAP's Morato said customers don't need to be concerned, given the architecture.
"It's not touching the underlying transactional or operational data in the system," he said. "WalkMe is an overlay in the UI level -- it's not integrated into Salesforce, for example."
David Essex, an industry editor for several TechTarget websites, contributed to this report.
Jim O'Donnell is a senior news writer for TechTarget Editorial who covers ERP and other enterprise applications.
