Dennis Howlett: Significant SuccessFactors accounting issues prior to being acquired by SAP

Enterprise Software consultant, analyst and blogger Dennis Howlett discovered that SuccessFactors had significant, "material" accounting issues at the time SAP agreed to acquire it last year. He questions whether SAP understood all these issues at the time of the agreeement, and whether SuccessFactors may have been overvalued as a result. Similar questions exist for many other SaaS and Cloud Vendors, which often use some accounting metrics and recognition methods that differ from more tradtional software vendors.

Ascent Venture Partners partner Matt Fates, writing in Gigaom, offers a explanation of using metrics that reflect a SaaS perspective. This may be appropriate, but that doesn't justify material accounting deficiencies that may have existed in the case of SuccessFactors.



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