SAP to launch $100M VC fund for NetWeaver
(Update: Turns out the fund's final size is $125 million)
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The goal is to ally with certain big-name venture capital firms in the valley, to drum up interest in SAP's ecosystem, specifically SAP's NetWeaver platform.
NetWeaver is a Web-based platform that can be used to develop not only SAP applications but others as well, and is SAP's way to try to co-opt competitors such as Oracle and IBM.
We've heard that it is not a legal entity like a traditional venture capital firm, but that its deals will be funded out of SAP's corporate development funds.
SAP might announce it next week at their user conference. Interestingly, though, it will apparently be run out of Philadelphia, not Silicon Valley -- a bit odd. We are checking for more details.
(Thanks to Merc colleague Therese Poletti for the scoop, which she got while working the phones for an upcoming Oracle story.)
http://www.siliconbeat.com/cgi-bin/mt331/mt-tb.cgi/1367
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Matt,
Interesting revelation. I presume the fund will actually be based in Newtown Square, not Philadelphia as that's where SAP's U.S. HQ is based. But if the components of the story are accurate, one has to wonder why this isn't under the perview of SAP Ventures. Deciding to have a fund that's not a legal VC, not part of SAP Ventures, and being housed in PA leads me to believe someone like Shai or one of his lieutenants is personally going to oversee this fund, wouldn't you agree?
By the way, I referenced your story in my blog and will follow up after I've had a chance to meet with Jeff and Lisa at Sapphire next week.
http://woodrow.typepad.com/the_ponderings_of_woodrow/2006/05/sap_launching_a.html
Jason
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SAP has to definitively decide if they are an applications company or a platform company. Trying to convince budding enterprise application ISVs to build on NetWeaver with the world's largest enterprise application provider, without bulletproof IP protection for both entities, is fundamentally a conflict of interest. Running it out of Newtown Square means the fund will be aligned with SAP America, and thus sales, which is actually a good thing. In the past, SAP has partnered and invested in ISVs but with little or no integration into the field, and thus, no sales synergies. Either way, this is a great move in the right direction for SAP, but they need to figure out their applications strategy and IP challenges.
Joe Insider on May 12, 2006 11:05 AMComment link
SAP has to definitively decide if they are an applications company or a platform company. Trying to convince budding enterprise application ISVs to build on NetWeaver with the world's largest enterprise application provider, without bulletproof IP protection for both entities, is fundamentally a conflict of interest. Running it out of Newtown Square means the fund will be aligned with SAP America, and thus sales, which is actually a good thing. In the past, SAP has partnered and invested in ISVs but with little or no integration into the field, and thus, no sales synergies. Either way, this is a great move in the right direction for SAP, but they need to figure out their applications strategy and IP challenges.
Joe Insider on May 12, 2006 11:05 AMComment link
