What's going on?

SAP, Europe�s largest software company, said on Tuesday that it plans to buy cloud-computing specialist Callidus Software for $2.4 billion as part of a broader effort to accelerate SAP�s drift to the cloud.

What does this mean?

SAP produces enterprise software (i.e. apps that help operational efficiency) for big companies and governments. Callidus, based in the US, provides software that helps corporate sales teams track leads and create better sales strategies through data science (a bit like Salesforce). With this deal, SAP appears to be complementing its �back office� (business speak for operations and IT) offering with a move towards the more customer-facing side of things.

Why should I care?

For markets: SAP is looking for a boost to its profitability as it ascends into the cloud.

For decades, SAP�s business model was to sell one-off, up-front licenses for its enterprise software products. But as it works to develop its cloud platform further, SAP is planning to move to a subscription-based model for its services, which it thinks will end up being more profitable for the company. Its margins were squeezed as it transitioned between the two models, but SAP says that its strategy is now bearing fruit � and ought to be supported even further by its new acquisition.

The bigger picture: Computers can be pretty slick salespeople.

Callidus automates the sales game by tracking the activity of prospective customers on a company�s website, grabbing their contact information (with consent, of course) and following up with a data-driven customer acquisition strategy (so, probably a lot of emails). Apparently, Callidus� software can even offer a quote and start a bidding war with potential clients � all strategically informed by surveilling leads� cookies and data. According to one consulting firm, by 2020 some 85% of business-to-business (B2B) transactions won�t even directly involve a human. Spooky!