) recently announced its plans to acquire SmartOps, a leading
provider of inventory and service-level optimization software
solutions. The financial terms of the deal, which is expected to
close by the first quarter of 2013, remained undisclosed. As per
the terms of the agreement, the employees of SmartOps will be
The acquisition of SmartOps is strategic move by SAP as it
perfectly compliments the SAP HANA business. SmartOps' existing
Inventory Optimization Suite will perfectly match and increase
sales and operations planning solutions based on SAP HANA,
thereby allowing a "real-time supply chain" solution to be built
on SAP HANA.
In addition, the acquisition builds on the existing SAP
portfolio of multi-stage inventory optimization solutions that
global businesses require in currently in a tough competitive
Today, companies around the world are faced with challenges
associated with volatile markets and complexity of logistics
management. Therefore, striving in this environment requires an
understanding of the demand pattern of the products and an
efficient supply network.
Hence, with SmartOps on board, SAP will be able to provide
these vital solutions to the businesses. The demand for the
supply chain software is growing and is expected to have a annual
growth of approximately 8%, exceeding $9 billion by the end of
SmartOps primarily offers key operating parameters and ensures
efficient and effective supply chain management (SCM) planning.
Its solutions organize capacity, inventory, demand, lead time and
product availability variables that facilitate customers to plan
inventory and service levels, thereby freeing up working capital
for innovation and growth.
Before the announcement of this deal, SmartOps and SAP already
had business relations as both were jointly delivering
best-in-class supply chain solutions to many large enterprise
In the last reported quarter (4Q12), SAP reported
year-over-year earnings growth of 7%. Profits during the quarter
were driven by delivering specific industry solutions strategic
investments in its flagship innovation SAP HANA.
Although SAP has a Zacks Rank #3 (Hold), its competitors like
LM Ericsson Telephone Company
) carry Zacks Rank #1 and
) has a Zacks Rank #2.
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