ERP software giant SAP is set to purchase one of its partners, LeanIX, in a move that it says will boost its digital transformation offering for CIOs.
The company expects to wrap up a deal for the German software provider in the fourth quarter of the year. Financial terms have not been disclosed.
Why is SAP buying LeanIX?
Founded in 2012 and based in Bonn, Germany, LeanIX employs more than 500 staff. It is currently privately owned by a group of investors including Insight Partners, Digital Transformation Capital Partners, Capnamic Ventures, Iris Capital, Goldman Sachs and Dawn Capital, and raised $80m in its last funding round, in 2020.
Its software helps businesses visualise and manage their entire IT application environment, enabling tech leaders to uncover applications in danger of becoming obsolete and plan new architectures and software deployments.
The company says it works with more than 1,000 enterprise clients around the world and recently launched an AI assistant offering these customers more automated options.
SAP will integrate LeanIX’s software with Signavio, the business process management company it acquired in 2021. It says, “Many CIOs rely on LeanIX’s offerings as part of their digital transformation with the RISE with SAP solution.”
“[LeanIX] complements the transformation capabilities of SAP Signavio solutions and will give SAP customers the unique clarity on IT landscapes that they need to reap the full benefit of business transformation,” an SAP statement says.
LeanIX will continue to be available as a stand-alone product for non-SAP customers.
André Christ, CEO and co-founder, LeanIX, said: “With an integrated, comprehensive view of IT applications and business processes we speed up modernisation and reduce transformation risks for our customers, and also secure their ability to adapt to technology shifts such as cloud and AI.”
Mina Mutafchieva, partner at Dawn Capital, one of LeanIX’s investors said: “We were impressed from the outset by LeanIX’s vision of how to shape the enterprise architecture of the future, and by André’s focus and drive – and the discipline with which the company has executed since has been inspiring.”
She said that despite “macro headwinds”, the business has “delivered impressive growth while remaining efficient with particularly strong unit economics”, and added: “SAP’s acquisition of LeanIX today is a reflection of how impactful the company’s product suite and partnership has become.”
SAP continues its own transformation
The deal is part of SAP’s bid to prove its continuing relevance to its clients as more businesses move workloads to the cloud and away from the traditional software licences that made SAP one of Europe’s largest tech companies.
It has struggled with the cloud transition in the face of stiff competition from US public cloud hyperscalers Amazon’s AWS, Microsoft Azure and Google Cloud, and though its most recent quarterly results, released in July, show cloud income was up 19% to €3.3bn, it still accounted for less than half of the company’s overall €7.55bn revenue.
Earlier this year it announced it was embracing AI, with a host of new automated products for its clients.
Christian Klein, SAP CEO, said: “Together with LeanIX, we want to offer a first-of-its-kind transformation suite to provide holistic support to our customers on their business transformation journeys.
“Building on our decades of expertise, we’ll embed generative AI to offer self-optimising applications and processes that can help businesses achieve key goals such as maximising cash flow while minimising their environmental impact.”