Germany's SAP, the largest maker of business-management software, agreed to buy SuccessFactors Inc. of San Mateo, Calif., for $3.4 billion in cash to keep pace with archrival Oracle Corp. in the cloud-computing market.
SAP is paying $40 a share for SuccessFactors, which makes software used to manage employee performance — 52% more than the closing price in New York trading Friday, SAP said.
SAP is promoting cloud computing, which lets clients rent software delivered over the Web rather than install it on their own machines, as a safe way to outsource data centers and reduce the need for hardware. The deal comes six weeks after Oracle, based in Redwood Shores, Calif., agreed to buy RightNow Technologies Inc. for $1.5 billion.
The global market for cloud services may surge to $148.8 billion in 2014 from $68.3 billion in 2010, according to researcher Gartner Inc.