Salesforce.com Acquires Rypple for Social Performance Management

Salesforce.com (NYSE: CRM) continued its acquisition spree Dec. 15, agreeing to purchase Rypple, a startup that makes Web-based software for human resource professionals.

Terms of the deal, which Salesforce.com expects to close by April 30, 2012, were not made public.

Rypple's software is a goal-setting application that helps human resource managers give employees feedback about how they're performing in their positions. The software is used by Facebook, Gilt Groupe, Mozilla, Rackspace, among other high-profile customers.

Such software, which greases the human capital management (HCM) wheels for companies, is becoming increasingly popular, especially provisioned through a Web browser as Rypple offers it. Enterprise application giant SAP last month agreed to pay $3.4 billion for cloud-based HCM specialist SuccessFactors (NASDAQ:SFSF).

Days after inking that deal, SuccessFactors said it would buy Jobs2web for $110 million. Jobs2web makes a cloud-based recruiting platform that lures top candidates through social networks, such as LinkedIn, Facebook, Bing and Twitter.

While companies such as Google are typically loath to discuss how they will integrate and leverage their acquisitions, Salesforce.com is run by CEO Marc Benioff, whose straightforward style is a hit with Wall Street analysts.

Salesforce.com said it will relaunch Rypple as Successforce and create a new HCM business unit, which will be run by John Wookey, the executive vice president of advanced applications.

Wookey previously worked for Salesforce.com's competition, integrating software acquisitions at Oracle (NASDAQ:ORCL) and then SAP (NYSE:SAP), where he led the company's cloud computing push.

Companies employ HCM software to minimize the cost and risk of employing people. This practice hasn't changed, though the way people do their work has considerably evolved.

Salesforce.com argued that enterprises that embrace social media use software made by companies such as Rypple, which enables goal setting, feedback, recognition and continuous dialogue between human resource management and employees.

In name alone, Successforce appears poised to challenge SAP's SuccessFactors buy, underscoring just how much of an arms race the market for Web-based enterprise applications is becoming.

Moreover, Salesforce.com said in its statement that it isn't done laying a foundation in HCM: "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."  

"We believe this acquisition will position Salesforce.com as a mature and the most integrated cloud computing company with product sets covering Sales Cloud, Service Cloud, Marketing Cloud, and now HCM Cloud," said J. Derrick Wood, an analyst with Susquehanna Financial Group.