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SAP Acquires Coghead's Technology As It Looks Towards The Cloud

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Yesterday we reported on the shutdown of Coghead, a web-based enterprise software editor that featured an unusually intuitive interface. Today, we were contacted by the company’s CEO Paul McNamara, who informed us that software giant SAP, which previously had invested in the company, has acquired Coghead’s intellectual property assets. While Coghead will cease operations, much of the company’s team will join SAP (though McNamara will not be joining the company).

While SAP had previously invested in the company, its ultimate acquisition of Coghead is sure to raise a few eyebrows. SAP has long been associated with local enterprise software suites that require time-consuming upgrades and IT teams, and has had trouble coping with the pressure to lower its prices to reflect those offered by SaaS services like Salesforce.com (though SAP offers products that these SaaS solutions don’t).

To combat this attrition, the company recently began offering smaller upgrades, allowing customers to pick and choose the features they’d like to upgrade rather than having to spend time on large system overhauls. It has also been making strides to establish services in the cloud, which may explain the logic behind the Coghead acquisition.

Update: Some comments below note that the Wall Street Journal article referenced originally contained some inaccuracies, and that SAP may not be introducing the ‘smaller updates’. However, the company is indeed expanding its presence in the cloud.

Here’s a portion of McNamara’s letter to customers:

As a customer, you know that the Coghead platform provides one of the
fastest and most efficient ways to develop applications. SAP saw great value
in our technology. SAP also saw great value in our people. As part of the
deal, many of the Coghead engineering and operations team have joined SAP as
well.

Coghead began as an ambitious vision by Greg Olsen, Chelliah
Thirunavukkarasu, and Bill Trento. Along the way, the company became a
trendsetter in the cloud computing space and I want to thank all of our
employees, customers and partners who contributed to turning Coghead from
vision to reality.

As for me, I will not be joining SAP, and I cannot comment any further on
SAP’s future plans for the technology or the details of the sale
transaction. However, I wish my former colleagues the best of luck at their
new home.

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