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TechData Sheet

Data Sheet—Why SAP Is Buying Qualtrics for $8 Billion

By
Aaron Pressman
Aaron Pressman
and
Adam Lashinsky
Adam Lashinsky
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By
Aaron Pressman
Aaron Pressman
and
Adam Lashinsky
Adam Lashinsky
Down Arrow Button Icon
November 12, 2018, 8:25 AM ET
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This is the web version of Data Sheet, Fortune’s daily newsletter on the top tech news. To get it delivered daily to your in-box, sign up here.

All companies with professional investors are always for sale. That’s doubly true once they file to list their shares publicly. The world can see all their secrets, and they market themselves heavily to prospective new investors.

It’s the perfect time for an acquirer to swoop in, which is what SAP did Sunday with its $8 billion acquisition of survey software company Qualtrics. It’s an astounding price for a company with annual revenues just shy of $300 million. In Qualtrics, though, SAP is adding to its arsenal of applications makers built primarily to deliver their wares online, compared with the old-fashioned way of shipping their software in packages. Like rival Oracle, SAP has been busy using its cash flow to add onto its core business software offering.

SAP also gets a seasoned entrepreneur and executive, Ryan Smith, the Qualtrics founder and CEO, who patiently built his company over a period of 16 years. Don’t miss Michal Lev-Ram’s Fortune profile of Smith from two years ago, where you’ll learn that the CEO is a big fan of Mountain Dew, among other details. Qualtrics will become part of SAP, which bought similarly positioned companies like SuccessFactors and Concur. The private company’s “exit”—by selling it solidifies the return it gets for investors in one fell swoop—will dwarf that of its Silicon Valley competitor, SurveyMonkey. That company trades for about $1 billion, and its shares have drooped since its September IPO.

Qualtrics is yet another win for the not-in-Silicon Valley crowd. It grew out of the rich if niche software scene in Utah, which gave rise to the likes of Novell and Omniture, successful companies both that, like Qualtrics, eventually ceased to be independent players.

Adam Lashinsky
@adamlashinsky
adam_lashinsky@fortune.com

NEWSWORTHY

Expense report approved. The big deal for Qualtrics isn't the only M&A move in techland today. Private equity firm Vista Equity Partners is buying financial analysis software maker Apptio for $1.9 billion, or $38 per share, a 53% premium to Apptio's closing price on Friday. The company went public two years ago at $16 a share.

Cashing out his chips. Masayoshi Son has come up with a way to raise billions that doesn't involve Saudi Arabia. Son's SoftBank Group got approval on Monday for the planned initial public offering of its Japanese telecom unit in an effort to raise $21 billion. The money will be used to invest in startups. About half of Softbank's Vision Fund, or $45 billion, came from Saudi Arabia and Son has said there could be some impact on the fund or future fundraising due to the murder of journalist Jamal Khashoggi.

Up, up, and away. Space startup Rocket Labs successfully launched its first rocket on Sunday in New Zealand. The Electron booster was carrying a cargo of small satellites and one science experiment. Rocket Labs will launch a second, similar payload of NASA Cubesats next month.

Shop 'til you drop. It was record sales of almost $31 billion for Chinese e-commerce giant Alibaba's made-up holiday of Singles Day on Sunday. Alibaba aired a TV special staring Cirque du Soleil and Mariah Carey to draw attention to its shopping-fest and said top sellers were products from Xiaomi, Apple, and Dyson.

Typo city. In an appearance at IIT Delhi in India on Monday, Twitter CEO Jack Dorsey said his company is still considering implementing a way to edit tweets. "We have to make sure that we are actually solving the predominant reason why people do it first and not make something that takes away from the public record, because I think it is really critical that we preserve it," Dorsey said at the event.

You grow up and you calm down. First come the rules, then comes the enforcement. New York City deployed inspectors to a high-end condominium building in midtown called the Atelier last month in a crackdown aimed at illegal Airbnb rentals. The city issued 27 notices of violation of rules against short term rentals. Under the city's current rules, residences can't be rented out for more than 30 days per year unless the owner is present.

FOOD FOR THOUGHT

Artificial intelligence apps have the potential to make many business processes faster and more efficient. But which ones? It's not so easy, warns Andrew Moore, the new head of Google's cloud A.I. business and the former dean of the Carnegie Mellon University School of Computer Science. In an interview with Will Knight at MIT's Technology Review, Moore says adopting A.I. is more than just spreading "magic dust" over existing processes.

There are a couple of mistakes I see being made over and over again. When people come and say “I’ve got this massive amount of data—surely there’s some value I can get out of it,” I sit them down and have a strong talk with them.

What you really need to be doing is working with a problem your customers have or your workers have. Just write down the solution you’d like to have; then work backwards and figure out what kind of automation might support this goal; then work back to whether there’s the data you need, and how you collect it.

IN CASE YOU MISSED IT

'Distinctly Uncomfortable:' U.K. Companies' Plans to Microchip Employees Face Fierce Pushback By Hallie Detrick

Lime Issues Another Recall, This Time for Scooters That Break in Half By Erin Corbett

Choosing the Cheapest Unlimited Data Mobile Plan Just Got Cheaper By Aaron Pressman

Facebook Goes After TikTok With the Debut of Lasso By Lisa Marie Segarra

Apple to Start Selling New iPhones, iPads, and Watches Through Amazon By Lisa Marie Segarra

What Is the 'Paris Call?' Google and Microsoft Back Emmanuel Macron's New Plan to Protect the Internet By David Meyer

BEFORE YOU GO

In a continuing and most wonderful trend, the Art Institute of Chicago became the latest museum to post online high resolution copies of thousands of works of art from its collections. Suitable for your PC's wallpaper or illustrating your next blog post, the posted works include Vincent van Gogh's Self-Portrait, Edward Hopper's Nighthawks, and Claude Monet's Water Lilies.

This edition of Data Sheet was curated by Aaron Pressman. Find past issues, and sign up for other Fortune newsletters.

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