SAP AG’s $3.4 billion agreement to acquire SuccessFactors Inc. shows just how big a threat online products are becoming to the kings of conventional software, and points to the possibility of more such acquisitions.

The deal, announced Saturday, should bolster SAP’s portfolio of Web-based software. The urgency SAP felt to do that, industry watchers said, was apparent in the 52% premium the German software giant agreed to pay for the relatively small Silicon Valley company.

“It’s a defensive move,” said Peter Goldmacher, an analyst at Cowen & Co.

The shift toward software that runs online—or in the cloud, in industry parlance—began in the late 1990s with the emergence of companies like Salesforce.com Inc. and NetSuite Inc. The products let companies avoid the cost of installing and maintaining software on their own server systems and personal computers. Instead, they offered functions that employees could tap on demand through a Web browser.

Many analysts assumed that business-software giants like SAP and Oracle Corp. would eventually buy smaller cloud-based vendors, just as they snapped up smaller suppliers of conventional business software. Analysts also assumed that they would wait for their targets to mature and for valuations to come down.

But businesses are buying online software at a faster rate than anyone predicted, and so “the run is starting to happen,” said Frank Gens, an analyst at research company IDC.

In some cases, the trend marks an about-face. A few years ago, Oracle Chief Executive Larry Ellison dismissed the need for his company to push more decisively into online software, saying that companies that sold their products that way didn’t make very much money. But in October, Oracle said it would make new versions of its programs available online. Later that month it agreed to pay $1.4 billion for RightNow Technologies Inc., which makes online customer-management software.

SAP has offered a version of its widely used business-application software via the Web since 2007, but the product sold slowly, in part because the company initially targeted it mainly at companies with fewer than 500 employees. Its decision to buy SuccessFactors is an indication that SAP couldn’t build a sizable position with internally developed products fast enough, said Paul Hamerman, an analyst at Forrester Research.

Bill McDermott, SAP’s co-chief executive, acknowledged as much in an interview Sunday. “This is clearly one of the areas we had to go get,” he said. “At the end of the day, our customers want to consume the value of the software in many ways. They all want the flexibility to run certain apps in the cloud.”

On Friday, SuccessFactors shares were up 1.1% at $26.25 in 4 p.m. trading on the New York Stock Exchange.

SAP’s acquisition price of $40 a share amounts to a hefty multiple of 16.5 times the San Mateo, Calif., company’s $205.9 million in revenue last year. Oracle paid eight times RightNow’s fiscal 2010 revenue.

Mr. McDermott said SAP would use its scale to boost SuccessFactors’ revenue. While the price tag may look high, he argued, it’s very much in the “middle of the range” of the current valuation of cloud companies, he said.

Corporate technology departments used to balk at their company’s buying online software, citing concerns about others managing critical business information. But many IT departments have gotten over those concerns. Now they see cloud software as a way to save money and simplify operations.

Businesses world-wide will spend $28.2 billion on these so-called cloud services in 2011, up from $21.5 billion in 2010, according to IDC. Spending is expected to more than double to $57.4 billion in 2014.

A big factor is the proliferation of smartphones and tablets. Businesses are increasingly looking for ways to make corporate data available on such devices, and it is typically simpler to do that through online services. “Mobile devices are going to force the shift to cloud apps,” said Mr. Gens, the IDC analyst.

All of these factors have combined to put pressure on traditional software companies like SAP and Oracle, which is based in Redwood Shores, Calif. While such companies have their own online products, they have tended to be lightweight versions of the programs sold for on-site installation.

Oracle, in a statement Sunday, touted its new cloud offerings, calling them industry leaders.

Revenue from Web-based software is recognized over time, in a subscription model. Until lately, that gave companies such as Oracle, accustomed to reaping revenue upfront from licensing fees, little incentive to push heavily into the field.

But analysts are predicting more acquisitions as Web-based software becomes more popular and companies like SAP seek to quickly build up their offerings of it, even with valuations as high as they are.

Salesforce.com, the largest online-software maker, has made a series of increasingly large acquisitions.

SuccessFactors also has started to grow by acquisition.

Mr. McDermott said he thinks other companies will try cloud acquisitions, but cautioned that some on-demand software companies on the market are financially shaky. “Whether they will pick up the assets available remains to be seen.”

Source:http://online.wsj.com/article/SB10001424052970204083204577078712428839858.html

When the software development team at CollectiveSoft announced that project managers can now take advantage of the time-saving features of Google Cloud Connect from within TeamWork Live, PM’s everywhere felt relief from the constant toggle between their PM tools and Google documents. When they added Microsoft Project integration, they may have set a new precedent for how collaboration software is supposed to work.

The product is the company’s flagship project management and collaboration tool, built and launched officially in 2006. In 2011, TeamWork Live was further enhanced to allow those migrating from other platforms, such as Basecamp, a one-click import solution, reducing downtime during the switch over to the new platform.

“Our goal is to create simple tools that allow people to collaborate more effectively online,” said Tuyen Truong, Founder and CEO. “We really feel our solution offers the most robust suite of collaboration and time-tracking tools available.”

TeamWork Live includes many of the tools one might expect to find and several other bonus features that might surprise even the most savvy project manager. Some of these features include: advanced reporting, branding (add your logo), folders, calendar, milestones, tasks, documents, comments, time-tracking, budgeting, retainers, messages, group chat, contacts, productivity tools, permissions, and integration with email, Google Docs, Microsoft Project, and more.

The solution is currently available with a 30-day free trial or a 14-day no-credit card required trial, with plans starting as low as $39 per month with all the features mentioned above.

Source:http://www.pr.com/press-release/371888

id Software’s Tim Willits revealed in a recent interview that the studio’s upcoming shooter Rage will feature an online pass that gates off some content solely to original buyers, but the company’s approach will be more subtle than that of other companies to use such passes.

“Have you found any sewer hatches?” asked Willits to his Eurogamer interviewer. (Sewer hatches appear to be non-essential branches off into separate parts of the game world, comparable to Vaults in Fallout 3.) That content, the hatches, will be open to first-time buyers. It’s downloadable content, Willits explained, but doesn’t require payment if you buy a new copy of the game.

Willits downplayed the importance of this content. “Most people never even see it,” he said of the hatches. In essence, the content behind a paywall is far less central to the game than, say, the game’s entire multiplayer component (as EA Sports games have started doing) or large, story-critical parts of the single-player campaign. When walled off sections of the game are put right in people’s faces complaints can start, but by using them as bonus material EA aims to keep all customers happy.

That line of questioning turned into requiring persistent connections, as upcoming hits Diablo 3 and Battlefield 3 are confirmed to do. Willits believes that the industry is headed that way. Half-Life 2 launched Steam, and Diablo 3 will “make everyone else accept the fact” that connections will be required, he said. Moreover, he supports requiring persistent connections and wishes that gamers would “have that be acceptable.” Anticipating anger from the masses, he persisted. “In the end, it’s better for everybody,” he said, citing the convenience of automatically updated games and new content. He added that “juggernauts” like Valve or Blizzard have to be the ones to force these changes in the industry. “I’m always connected,” he concluded. “Our fans are always connected.”

Source:http://www.geek.com/articles/games/id-software-tries-unique-online-pass-for-rage-20110815/