SAP can acquire WalkMe

The Bundeskartellamt has cleared under merger control plans by SAP (Walldorf) to acquire WalkMe, an Israeli company offering a so-called Digital Adoption Platform.

Digital Adoption Platform solutions (DAP solutions) are increasingly being used in large companies to replace training courses, the conventional method of knowledge transfer, to train their staff in the use of software. As these companies often use a whole range of software applications from different providers, they have an interest in harmonised solutions that, for example, make it easier to onboard new staff. When a provider of widely used enterprise software such as SAP supports or enhances DAP solutions, this can be advantageous for buyers which primarily use enterprise software from that provider.

Andreas Mundt, President of the Bundeskartellamt: “Overall, the Digital Adoption Platform sector is very dynamic. There is an increasing demand for solutions that support the digital transformation of businesses. At the same time, new solutions can only continue to emerge if markets remain competitive. We must therefore take a close look when a large provider of enterprise software such as SAP intends to acquire what we consider to be a leading provider of DAP solutions. Having examined the acquisition, we have no serious competition concerns about the project. The acquisition is not expected to significantly impede effective competition in the market for DAP solutions.”

The Bundeskartellamt’s investigations have shown that as demand for support in the digital transformation of businesses is increasing, the market for DAP solutions will also continue to increase. WalkMe will continue to be exposed to competitive pressure from other providers. It is to be expected that WalkMe will have easier access to SAP customers after the merger as SAP is going to actively promote WalkMe’s product among those of its customers, in particular, which do not yet use a Digital Adoption Platform. However, in technical terms, WalkMe’s competitors will not be precluded from accessing these customers as well. Simultaneously, with WalkMe focusing on SAP applications, new competitive opportunities will open up for other providers which base their business models on software applications from third parties or purposely remain vendor-neutral.

Background

Digital Adoption Platforms provide software tools that build on and make it easier to use existing applications. For instance, software application users may be offered context-aware assistance showing them what information the respective application requires them to enter in a given situation. It is also possible to monitor software application use in order to improve processes, for example by modifying in-app guidance. Digital Adoption Platforms are overlays that sit on top of software applications and are usually made available via a browser extension. They are not integrated into the applications.