Dalgaard downplayed the importance of platform consolidation. "The reality is that it's a big market we're approaching," he said. "Having some platforms is not the biggest problem in the world."
The real goal is to create "magical applications that work well together," he added. However, "for sure, we'll find ways of consolidating where it makes sense," Dalgaard said.
He also expressed little concern over threats from the likes of Workday and Oracle, saying that the degree of high-level executive backing as well as the deep reservoir of intellectual property and know-how provided by SAP will push the company's cloud efforts ahead of the competition.
SAP plans to discuss the joint product road maps in greater detail at an upcoming event.
"It's exactly what I expected," Forrester Research analyst Paul Hamerman said of Wednesday's announcement. "[SAP needs] to have an offering in the cloud for core HR." That's due to competition from the likes of Workday, which has landed large, high-profile contracts for its own cloud-based HCM application, Hamerman said. "Workday is having an impact in the marketplace. That's part of what drove this deal."
While SuccessFactors has done some good things with Employee Central, it's not yet fully built out, according to Hamerman. "They need to add in country-specific localization they have in the on-premise HR systems." SAP's on-premise application "has the most regulatory support of any HR system," he added.
It may take SAP and SuccessFactors a few years to get Employee Central to where it needs to be, according to Hamerman. "They have to get into employee benefits and compliance issues across a number of countries. It's a significant job."
But cloud-based core HR software is also a high-growth market, Hamerman said. "The majority of customers running on-premises systems will stay put, but there's going to be a significant level of attrition over the next few years," he said. "As much as 10 percent will migrate to a cloud-based solution and SAP needs to be in a position to offer that."
SAP will also be able to go down-market, selling Employee Central to growing companies that want their first serious HR system to be cloud-based, Hamerman said.
Oracle recently made a big move into cloud HR software earlier this month when it announced the acquisition of SuccessFactors competitor Taleo. Oracle is paying $1.9 billion for Taleo, a significantly smaller sum than what SuccessFactors cost SAP.
"SAP paid more but they have a lot more to work with here in terms of assets," especially on the talent management front, Hamerman said. "What Oracle gets is a tier-one recruiting solution, but the other assets they're getting are not necessarily going to benefit them as much."
Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris's e-mail address is Chris_Kanaracus@idg.com