Arik Hesseldahl

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Salesforce Gets Into the HR Cloud With Rypple Acquisition

Another company that builds human resources software that runs in the cloud has just been acquired, and the buyer is Salesforce.com.

Salesforce just announced that it is buying Rypple, an oddly-named outfit that specializes in performance management and goal-setting. It’s a cloud-based platform for giving employees feedback on how well they do their jobs, and which attempts to make the annual performance-review process — dreaded by so many employees and managers — less, well, dreadful.

Salesforce says in its press release that it plans to relaunch Rypple under the name Successforce, which to me sure sounds a lot like SuccessFactors, the cloud-based HR software outfit that software giant SAP acquired earlier this month for $3.4 billion. That makes the third acquisition of a cloud-based software firm in recent months. Oracle, you’ll remember, acquired RightNow for $1.2 billion in October. Expect a new round of speculation around other companies in the space, chief among them Taleo, whose stock has picked up considerably since the SuccessFactors deal, but which was down today.

Rypple’s customers run the gamut: Facebook is mentioned as one of them in the press release; Spotify was named as another in a Wall Street Journal blog post earlier this week. Jive Software, a social enterprise software outfit that IPOed this week, is another.

Financial terms haven’t been disclosed, but Rypple’s investors include Bridgescale Partners and EdgeStone Capital Partners, as well as several individual investors, including Peter Thiel, the PayPal founder.

Salesforce’s statement follows; below that is a short video explaining what Rypple does:

Salesforce.com Signs Definitive Agreement to Acquire Rypple — First Step Toward Human Capital Management for the Social Enterprise

Acquisition marks salesforce.com’s first step into Human Capital Management

Rypple’s next generation social performance management app to be re-launched as “Successforce”

New HCM business unit to be run by John Wookey

Rypple to extend value of existing salesforce.com products

Hundreds of companies like Facebook, Gilt Groupe, and Spotify embrace Rypple’s new social model to empower teams to share goals, recognize great work, and improve performance

SAN FRANCISCO, Dec. 15, 2011 — Salesforce.com [NYSE: CRM], the enterprise cloud computing company (http://www.salesforce.com/cloudcomputing/), today announced it has entered into a definitive agreement to acquire Rypple, a cloud-based social performance management company. The acquisition signifies salesforce.com’s entry into the human capital management (HCM) market for the social enterprise. Salesforce.com plans to re-launch Rypple as “Successforce” and create a new HCM business unit, which will be run by John Wookey. Rypple’s unique social technologies will also extend the value of salesforce.com’s existing core products. The transaction is expected to close in salesforce.com’s fiscal first quarter ending April 30, 2012, subject to customary closing conditions.

Comments on the News
• “Salesforce.com and Rypple share a vision for extending the social enterprise to transform the way we work,” said Marc Benioff, chairman and CEO, salesforce.com. “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.”
• “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 John Wookey, executive vice president, advanced applications, 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.”
• “We chose Rypple to be the core of Facebook’s employee performance management platform because it’s designed from the ground up to be social,” said Tim Campos, CIO, Facebook. “We are delighted to see it become part of salesforce.com’s social enterprise strategy.”
• “Rypple was designed from the start to be fun, social, and mobile — an app that can delight managers and employees in entirely new ways,” said Daniel Debow, co-CEO and co-founder, Rypple. “As the leading social enterprise company with more than 100,000 customers worldwide, salesforce.com will allow us to not only strengthen our offering for the hundreds of high-performing organizations that use Rypple today, but also scale it to reach many more.”
• “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, Rypple. “Salesforce.com gives us the opportunity to apply our expertise and extend our vision for Rypple with Successforce.”

Salesforce.com Redefines HCM for the Social Enterprise
Traditional HCM software that many businesses use today was designed 30 years ago for personnel departments whose goal was to minimize the cost and risk of employing people. While HCM software hasn’t changed in decades, the way people work has radically changed.

Today’s workforce demands new performance and leadership tools that are completely transparent and allow employees to be connected to their company’s mission and each other. Social enterprises and progressive HR leaders are embracing apps like Rypple, which focus on the inherent social nature of performance management — goal setting, feedback, recognition and continuous dialogue — to help employees align more effectively around the company mission.

The acquisition of Rypple and its planned re-launch as Successforce signify salesforce.com’s entry into the HCM market. The company plans to expand into other areas with a new social model that will revolutionize the way companies recruit talent, build teams, empower employees and achieve results.

The new HCM business unit, including Successforce, will be led by John Wookey, salesforce.com’s executive vice president of advanced applications. Wookey comes to salesforce.com with more than 20 years of experience in enterprise software, including senior leadership positions at Oracle and SAP.

Extending the Value of Salesforce.com’s Existing Products
A social revolution is taking place today. The number of social networking users has surpassed e-mail users. Nearly a quarter of all time spent online is spent on social networks like Facebook. People access the Internet more from mobile devices than from desktops. Today, companies must change the way they collaborate, communicate and share information with customers and employees to stay competitive. Salesforce.com is helping companies meet the challenge of this social revolution with its social enterprise strategy.

With this acquisition, salesforce.com will embed some of Rypple’s next-generation features into its existing products. For example, people will be able to thank colleagues, win badges and provide recognition – all from within Salesforce Chatter. And customers of core Salesforce products — the Sales Cloud, Service Cloud, and Force.com platform — will be able to connect with new employee feedback tools to help drive business goals and power the future of their employee social networks.

Rypple: Pioneers of Social Apps
Founded in 2008, Rypple pioneered a new approach to performance management — one that empowers managers and their teams to learn faster and perform better. Rypple is a social performance app built for the way we work today — in real time. With Rypple, teams can share key priorities and get the continuous feedback, coaching, and recognition they need to consistently achieve their goals, making performance management painless and effective. Hundreds of companies including Facebook, Gilt Groupe, and Spotify use Rypple’s social performance app, which is based on 50+ years of behavioral science, focusing on what really keeps people passionate about their work.

Details Regarding the Proposed Acquisition
The transaction is expected to close in salesforce.com’s fiscal first quarter ending April 30, 2012, subject to customary closing conditions. The transaction is not expected to have a material impact on revenue for FY13. Salesforce.com will initiate EPS guidance for fiscal 2013 on its fourth quarter conference call in February.

About Rypple
Rypple is web-based social performance management software that helps managers and employees improve performance through social goals, continuous feedback and meaningful recognition. Designed to build a transparent, results-driven work culture, Rypple replaces the traditional performance review with an easy, social and collaborative approach so people know where they stand and are accountable for achieving their goals. Hundreds of high-performing organizations use Rypple, including Facebook, Gilt Groupe, Kobo, Mozilla and Rackspace. Founded in 2008, Rypple is funded by Bridgescale Partners, Edgestone Capital Partners, Peter Thiel and a veteran team of angel investors. Learn more at www.rypple.com.


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