Looks like SAP is getting into the acquisition grove, last week it wasSmartOps, this week with Camilion. No financial terms were disclosed and no timeline for the acquisition was mentioned.
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An(other) acquisition from the ecosystem
Like SmartOps, Camilion has been an SAP partner since a while, achieving NetWeaver certification a while ago already and both companies even launching the first Insurance industry Super Suite, back at the CIO Insurance Summit in May of 2012.
Camilion was founded in 2001 with only the CTO, Neil Ohm, still serving in management. The company has focused on the traditional problem of modelling and creating insurance policy & products functionality and then integrating them into the sales and service value chain, with even offering their own quoting and underwriting applications.
Policy & Products functionality meets ... Mobile
Interesting enough the press release mentions a number of forward looking statements - the key one in the area of mobile. Though Camilion claims to have a mobile quoting solution running alreaydy (AXA or Chartis (now AIG)?) - it does not seem to be productized yet, as no other customers are mentioned. For SAP this is now an opportunity to rebuild the Camilion mobile offering on top of Sybase SUP and Afaria products. Mobile applications on these products have been proven expensive (see the tussle on the expense of mobile HCM functionality here on LinkedIn) but in the insurance industry security and compliance are key - so it's an industry which should pay the premium on the Sybase mobile products.
Policy & Products functionality meets ... Hana
Camilion got the message, that Hana is key for SAP and SAP partners, even modelled their markettechure of the Super Suite on top of Hana (see below), in anticipation of real product creation. Similar to mobile, the press alludes to the potential that Hana can bring to the modelling and design of financial products.
Policy & Products functionality meets ... R/3
All ERP products suffer from a genetic misfit for service industry companies, due to their manufacturing heritage. Products are supposed to be created and be there for a long time. Contrast this to the financials service indudstry with yearly products, seasonal products (think of insurance) and a lot or regulation and governance on top. This gives companies like Camilion an opportunity to get a good footprint in large financial services companies. And SAP realized this and in partnership with Camilion created the Super Suite - which actually is a solution that embeds the Camilion products for the core product design, uptake and analysis part.
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| Diagram, of the SAP Super Suite from Camillion's website. |
As the diagram shows, this is pretty much enterprise systems heart surgery. Not only does the core policy and product functionality have to work - it also means a lot of interfaces that need to be tied between the front office (CRM) and the rest of the backoffice (ERP).
The customer wins
Given the risk of getting the heart surgery wrong, including the continued maintenance, it's likely that large SAP customers may have put pressure on SAP to acquire Camilion and for SAP to own the integration problem going forward.
Who could the customers have been? A quick websiteoverlay points to Axa and / or Chartis (AIG). But of course this remains all speculation. The good news for SAP insurance customers is, that they can expect a well integrated solution for the policy and product functionality problem. SAP will have to show they will achieve that, maybe it will be easier for SAP to rebuild the Camilion functionality in SAP technology, than to integrate with it (see here for the tenuous integration challenges between SAP HCM and Successfactors).
And a stab at Oracle
Camilion is also an Oracle partner... it was not clear how much Oracle depends on Camillion (e.g. the Documaker products?) - so this will be a blow for Oracle customers and Oracle. Maybe Camilion was able to shop with both vendors and SAP was the winner. Either way the competitive damage will have been a motivator for both sides.
MyPOV
Open heart surgery to ERP suites is not an easy endeavor. SAP already failed in the late 90ies with a highly customized banking product that could not be maintained with continuous integration backlog to the main SAP R/3 releases. Oracle ran into similar challenges with their CPG vertical. The good news is that the integration technologies improved and SAP has better chances than ever to integrate a product like Camilion with the new NetWeaver PI functionality. On the flip-side, this will take time, create frustration and need compromise - so SAP will need to do a good job to retain the key Camilion talent.