SAP buys more retail software expertise

SAP plans to acquire Khimetrics, a U.S. customer-demand management software vendor with a focus on the retail market. The move follows the Germany-based ERP (enterprise resource planning) company's September announcement that it would purchase retail player Triversity Inc., which specializes in selling customer-centric, point-of-sale software.

SAP, which announced the new acquisition Tuesday, expects to complete the purchase in January 2006, subject to the approval of antitrust authorities. The company didn't make public the financial terms of the deal. SAP said it hopes to retain Khimetrics' 130 staff and the firm's office in Scottsdale, Arizona.

Acquiring Khimetrics will let SAP add in more features to its SAP for Retail software suite, notably in the areas of analytical pricing and forecasting technologies. SAP plans to integrate Khimetrics' Java-based KhiDemand software into SAP for Retail, which is built on its NetWeaver platform. SAP believes it can pick up more customers in the retail market as users move toward standardized software and away from applications they developed themselves.

Although retail is the prime focus of the proposed acquisition, SAP also intends to continue Khimetrics' targeting of two other vertical markets -- financial services and consumer packaged goods.

Khimetrics' customers include grocery chain Albertson's, pet supplies chain Petsmart, home improvement store chain Lowe's Companies, and convenience store chain 7-Eleven.

There's been something of a feeding frenzy of late over the smaller retail software companies, with SAP's main rival Oracle also buying up firms rapidly.

Earlier this year, SAP and Oracle had a very public battle over which of them would acquire retail management software developer Retek. Oracle outbid SAP's original bid and ended up purchasing Retek.