After being acquired for $8 billion in November last year, Utah tech unicorn Qualtrics is now part of the German software behemoth SAP, but how do their platforms align and what does the ideal customer of both look like?
At the time of the acquisition SAP CEO Bill McDermott said last month that "the most important thing on our agenda right now is experience management".
He then told a German newspaper this week, as reported by Reuters, that he wants to double SAP's market cap to $282-$338 billion by 2023. Qualtrics is clearly a bet he feels confident in.
Speaking on stage at Qualtrics X4 in London, CEO Ryan Smith said that the first text he and McDermott received after their 'partnership'-cum-acquisition was announced came from Kevin Plank, the CEO of sportswear brand UnderArmour, a customer of both software vendors.
The text said, "we want to be the lighthouse customer" for the two companies now.
SAP specialises in enterprise resource planning (ERP) systems, but also sells a gamut of software which underpins some of the biggest companies on the planet. Where is the synergy between the two?
What Qualtrics and SAP do
Smith likes to talk about X and O data. Operational data ('O data') is things that have happened in your business, and has long been the speciality of vendors like SAP.
Then there is experience data ('X data') which is qualitative information from customers and employees and is what Qualtrics has built itself around collecting and making sense of for big brands.
It is the combination of these two data streams in one system which clearly enamoured McDermott enough to pay $8 billion for Qualtrics last year.
In a blog post published at the time of the deal, now-departed executive Robert Enslin wrote: "This is a very transformative moment. With this union, we are poised to combine over 1 billion records of experience data together with operational data from 77 per cent of the world's transactions touched by an SAP system.
"The two richest data sets in the economy - experience data (X-data) from Qualtrics that tells you why and operational data (O-data) from SAP that tell you what is happening - paint a complete picture that fuels intelligent enterprises so they can deliver superior experiences: a virtuous cycle."
Smith told Computerworld UK after his keynote that the first priority for Qualtrics is to get "all the experience data in an organisation on the Qualtrics platform and SAP's network and reach is going to help with that more than anything."
Once that is in place the two vendors can start thinking about product synergies, with SAP's cloud-based HR software SuccesFactors the lowest-hanging fruit, according to Smith.
Next is the commerce software Hybris, where Smith outlined his ambition to make Qualtrics "the feedback button for the internet".
Then there is the trickier parts of the partnership.
"We're working through what the strategy is for HANA," he said, "I think that's a little bit more heavy lifting. I think what's exciting is how we can play in that. Leonardo, their AI tech, we want that as soon as we can get it. Our engineers are already looking at that and how to bring that into iQ."
You complete me
Also speaking at X4, Adaire Fox-Martin, who leads global customer operations at SAP, said that when Qualtrics was presented to her in the boardroom as a potential M&A target she had to "look you guys up. I had to do my own research".
What she found after that - channeling her inner Jerry Maguire - was a "bit of an epiphany. I felt, quite honestly, like Qualtrics completes SAP," she said.
Expanding on that while speaking to Smith on stage, she added: "You just described some of the CEO narratives you have been involved in, and they are exactly the same narratives have happened in meetings I have had with CEOs, around how to differentiate their customer experience.
That was one aspect. Second was SAP has long been the custodian of operational data, so our system can tell you what happened and when, but it often can't tell you why.
"The third element is we were excited about the role Qualtrics could play in innovation at SAP. We have acquired some of the best cloud companies in the world [Ariba, Fieldglass, SuccessFactors etc.]. Each focuses on a vertical, but Qualtrics works across all verticals and can be a unifying element across all of those."
Go to market
Smith spoke a lot about how the deal with SAP was a partnership, suggesting there will be a certain amount of give and take, but he was also keen to stress that access to SAP's global reach will help supercharge Qualtrics' own growth.
"What if we just leveraged all of the relationships that are going on and every deal that is coming in and we're walking in and saying: 'Look, let's get it all together in one spot for the first time ever.' Our system integrates with everything already," he said.
"It's more the go to market and then how do you make the product speak to each other. That's what it really comes down to and we have some of the best engineers in the world... So I'm not worried, we don't even think about that, that's not a problem."
"I've been waiting for 17 years to go and have the conversations that we're having, to be globally the way we are and I love that SAP is backing us the way they are. And I think that I love that we're going to help SAP as well," he added. "There's a lot of companies that their acquisition strategy is to bring someone in and leave them alone and don't touch them."
Instead, Smith wants "the whole go to market from SAP, I want all the relationships, we want to integrate. At the same time we want to take the SAP Cloud, that has amazing assets and transform the whole company around the cloud."
At the time of the deal, many questioned the cultural fit between the Utah startup's culture with SAP's more corporate style. Smith was dismissive of the concerns however.
"Every company has their own culture," he said. "SAP has one of the better cultures of large tech companies. I don't think people realise that.
"I tried to recruit a lot of people out of SAP, and I've been very unsuccessful in the past. People stay for a long time, I mean Rob Enslin, who just left, was there 27 years, that doesn't happen.
"I'd rather deal with a culture of people who have been there a long time, and then figure out how to adapt, than the opposite, which is a culture where it's just a revolving door, and there's no personal loyalty, no personal brand, and people don't care. Which is why I'm seeing in the Bay Area," he added.