On August 6, I attended a Global Virtual Press Event to discuss the completed acquisition of hybris by SAP. The acquisition has been in the works for quite some time and in fact, RSR partner Brian Kilcourse discussed it in our weekly newsletter on June 11, 2013. But under European law, not much was said by either company until the deal was done. It’s now done, and hybris is a wholly owned subsidiary of SAP.

So what does it mean? Let’s start with what it means for SAP. Frankly it means a lot. The company had a couple of glaring holes in its retail portfolio, both of which have now been filled. One wasretail planning. That application was built out internally, and is complete and running on SAP’s high performance computing database platform, HANA. Of course, the other elephant in the room was the lack of aworld-class eCommerce platform. Hello hybris!

In keeping with recent trends, SAP is going to run hybris as a separate entity, much as it has with recent acquisitions Ariba, Sybase, SuccessFactors, and Business Objects. We think this is a good decision. In days gone by, SAP preferred to merge its new companies onto the SAP platform, which cost valuable time and money. The world has changed. SAP just doesn’t have that kind of time. The race is on to create the next generation Commerce engine: one that drives in-store POS, mobile and ecommerce. We have said before that hybris is one of very few players out there who are well-positioned in that race. Now, by virtue of the acquisition, that extends to SAP.

What does it mean for competitors?

If it wasn’t already abundantly clear, SAP is very serious about retail. And its footprint extends from the customer all the way back into financials. Only two or three other vendors can claim the same footprint. Just as I said at the time that ATG was a powerful purchase for Oracle, I must say the same about hybris for SAP. Both companies are building out compelling suites. It also makes the recent announcement of Noel Goggin’s (formerly of Red Prairie / JDA) move over to head Epicor’s Retail Solutions Division even more timely. We expect to see a reinvigoration of that division under Noel’s leadership. And of course, JDA isn’t standing still. And Microsoft Dynamics is rapidly moving up market.

What does it mean for retailers?

A year ago, I might have been concerned about hybris’ financial stability, but it had already grabbed a new tranche of capital and was headed for an IPO. Still, it’s good to know the company is no longer “in play. ” And with hybris in hand, I would expect to see SAP create another enterprise-grade entrant into distributed order management / order orchestration from the combined entity. In other words, I believe we’re seeing addition by subtraction. There may be fewer overall players in the field, but those who remain are stronger, more full-featured and more viable than before. If I was a retail CIO, I’d be feeling pretty good right about now, even without thinking about the platform players from ecommerce through supply chain execution who are making a strong showing in the industry.

In short I see a lot of opportunity for all concerned. I also see there’s a lot of work to be done. While hybris can provide a single view of the customer across all selling channels, it’s not clear to me how that will work at the in-store POS in the short term. In the long term, it’s clear…there’s got to be one engine driving customer, order and inventory visibility. We’ll be watching this one closely, and recommend you do too.