SAP, the German enterprise software giant, today announced an acquisition to strengthen its hybris e-commerce division. It has acquired Gigya, a firm that helps online properties manage customer identities and profiles. Terms of the deal have not been disclosed officially, but our sources tell us it is for $350 million.
This was the same figure that was reported yesterday when the news leaked out as a rumor in the Israeli press (Gigya is based out of Mountain View, CA, but its R&D is based in Israel, and its founders are Israeli). Analytics firm Zirra also told TechCrunch that the company was valued at around $250 million in its last valuation, back when it raised $35 million led by Intel Capital in 2014.
Gigya today manages some 1.3 billion customer identities across hundreds of sites, existing business that it will bring under SAP's umbrella. The idea will be to integrate those features into SAP's wider e-commerce operation to expand the kinds of services it offers to existing customers, and to help sell more e-commerce services to Gigya's base.
“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,” said Carsten Thoma, president and cofounder of SAP Hybris, in a statement. “Consumer trust is the main currency to succeed for customer-driven organizations. This is what Gigya is known and recognized for.”
Gigya originally had its start as a "social" log-in platform in which it helped online properties manage customer profiles as linked with their profiles on sites like Facebook. But a few years ago, the company started to widen out its view of the purpose of identity management and how it can be used for a wider set of customer management features for e-commerce and other sites.
“We actually think that there’s quite a bit of a transformation happening,” Patrick Salyer told TechCrunch in 2014. “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.”
That pivot was a smart move: online security is an issue that has blown up because of a number of high-profile breaches, the trend of moving more services to the cloud, and the growing sophistication of malicious hackers.
Gigya itself has not been immune to some of those issues: the company's platform was used as a backdoor by the Syrian Electronic Army back in 2014 to hack websites (the vulnerability was subsequently repaired).
With the rush of breaches, we've seen a focus on better and more water-tight identity management. E-commerce companies -- working as they do in transactions and consumer trust -- stand to lose the most of all verticals online.
Combined with that, they are simply trying to create better and more intelligent identity management systems to make their user experiences more user-friendly.
Another significant detail in Gigya's current offering is that its product -- which it sells as "registration-as-a-service" -- offers localization features, which is important in e-commerce as different regions have specific compliance requirements and regulations, both in terms of where data is housed and in areas of data protection.
“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,” said Salyer in a statement.
“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.”
Gigya has 300 employees, all of whom will be coming over in the deal, which is expected to close in the fourth quarter of 2017.