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Salesforce.com Enters HCM Space with Rypple Acquisition

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Posted December 16, 2011 By Thor Olavsrud     Feedback

Seeking to get its foot in the door of the human capital management (HCM) space, Salesforce.com Friday signed a definitive agreement to acquire cloud-based social performance management specialist Rypple.

Seeking to get its foot in the door of the human capital management (HCM) space, Salesforce.com Friday signed a definitive agreement to acquire cloud-based social performance management specialist Rypple.

Financial terms of the deal were not disclosed.

"Salesforce.com and Rypple share a vision for extending the social enterprise to transform the way we work," said Marc Benioff, chairman CEO of Salesforce.com (NYSE:CRM). "The next generation of HCM is not just about a cloud delivery model, it's about a fundamentally better way to recruit, manage and empower employees in a social world."

The acquisition comes a week after SAP made its own aggressive play in the space with the $3.4 billion acquisition of cloud-based HCM specialist SuccessFactors, the second-largest software-as-a-service (SaaS) provider after Salesforce.com.

Salesforce.com plans to rebrand Rypple as Successforce, a new business unit to be run by John Wookey, who joined Salesforce.com in November. Earlier this year, Wookey left SAP after spending two-and-a-half years in charge of its SaaS for large enterprises strategy.

"Our social enterprise strategy continues to accelerate, and is at the root of the broad-based transformation and innovation we are seeing from customers today," said Wookey, executive vice president of advanced applications at Salesforce.com. "With the launch of Successforce, Salesforce.com plans to revolutionize HCM starting with an exciting social performance management app that will delight millions of employees around the world."

Salesforce.com also plans to leverage Rypple's social technologies in its existing core products.

Rypple takes its inspiration from Facebook, eschewing performance reviews in favor of a more consumer-like system of real-time social feedback—including badges for skills and achievements—that can later be collected for a more formal review process.

"We took the science of team performance and applied the collaborative, transparent and real-time power of social networks to create a completely new model for managing people and the work they deliver," said David Stein, co-CEO and co-founder of Rypple.

Stein's fellow co-CEO and co-founder, Daniel Debow, added, "Rypple was designed from the start to be fun, social and mobile—an app that can delight managers and employees in entirely new ways."

In fact, Rypple runs the core of Facebook's own performance management platform, in addition to other companies like Gilt Groupe and Spotify.

Salesforce.com said it expects the transaction to close in its first fiscal quarter, which ends April 30, 2012.

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