A ‘timely and necessary’ acquisition, but customers should carefully watch the impact on pricing.
SAP today announced it has agreed to acquire AI-powered talent acquisition firm SmartRecruiters to bolster its SuccessFactors human capital management (HCM) suite.
During a media briefing, Daniel Beck, president and chief product officer of SAP SuccessFactors, highlighted what he sees as three major benefits for customers: First, according to Beck, AI and automation will assist in sourcing candidates, screening on skills and work history, and offer a more personalized candidate experience. Second, he said, “feeding all of this robust, rich recruiting data into People Intelligence will allow for identifying bottlenecks, identifying better sources for talent, and, of course, feeding this data into more strategic workforce planning.”
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Thirdly, he said, the combination will enhance the user experience for all concerned with the addition of SmartRecruiters’ user-friendly interface.
“Bringing in talent isn’t just an HR priority; it’s a business priority,” he noted. “And SmartRecruiters has a robust portfolio with advanced capabilities which allows us to move more quickly to serve our customers.”
The SmartRecruiters platform, with its embedded AI capabilities, including an AI “recruiting companion” known as Winston, will continue to operate as what its CEO, Rebecca Carr, described as “an agnostic vendor.”
“We’re going to support all of our customers and prospects just as we do today,” she said during the briefing. “That means same leadership, same support, same commitment to innovation. But of course, once this transaction is closed, we will be partnering very closely with Dan [Beck] and his leadership team to offer a deep and robust connectivity to the SAP ecosystem, so that whether you’re a SmartRecruiters customer or an SAP customer, or both, we’re going to be able to create good value for you.”
Neither Carr nor Beck would discuss specific post-acquisition plans, only saying that once the deal closes, they will develop joint roadmaps. However, in response to a question about the future of the SuccessFactors recruiting module after the acquisition closes, Beck said, “I think it’s safe to say the SmartRecruiters platform and portfolio allows us to move more quickly to serve our customers. Speed is essential in this industry and how we serve our customers, and our intent, of course, is to get to that point.”
Details of the deal were not revealed, but the companies expect it to close in the fourth quarter of this year, subject to closing conditions including regulatory approval.
Customer impact in the balance
Given that SuccessFactors lags behind its competitors in this space, noted Scott Bickley, a research fellow at Info-Tech Research Group, “this acquisition is both timely and necessary.”
“SmartRecruiters already serves a robust customer base of over 4,000 enterprises, including Amazon, McDonald’s, and Visa,” he said. “They possess best-in-class AI-driven capabilities via their Winston AI companion in the areas of talent match, chat, and talent screen. With hundreds of pre-built integrations to third-party applications and the ability to work natively via local environments such as Slack, Microsoft Teams, SMS, and WhatsApp, the potential to streamline the underlying talent acquisition workflows and client interactions for SAP customers is material.”
Still, Mike Tucciarone, VP analyst in Gartner’s software and cloud negotiation practice, warned that “SAP’s acquisition of SmartRecruiters could signal significant changes for customers, especially those already invested in SuccessFactors HCM suite.”
“The big question now is how SAP will integrate SmartRecruiters’ technology,” he said. “Will its capabilities be merged into the existing SuccessFactors Recruiting module, or offered as a separate product? This is particularly relevant in light of SAP CEO Christian Klein’s recent Q2 2025 earnings call comments emphasizing the company’s goal to increase prices to drive long-term margins and profits. If the SmartRecruiters acquisition is merged into the existing SuccessFactors Recruiting module, it could provide SAP with another lever to justify price increases.”
Tucciarone advised current SAP customers to ask the company how this acquisition will impact product roadmaps, licensing, pricing and contracts.
Info-Tech’s Bickley agreed. “SAP should also consider how they will deliver value and close the gap with the competition without raising their customers’ costs as well. SAP customers should not have to pay for the privilege for SAP to play catch-up,” he said.
