I heard this rumor earlier, but before spreading it I wanted to be sure it was true. After all, this is not the first time that I hear rumors about Centive!
And it is true…
Xactly Corporation just posted the press release about the Centive acquisition.
“In a stock-based transaction, Xactly has acquired all of Centive’s assets and its employee base. The combined companies will operate under the name Xactly… Xactly will fully support both companies’ product platforms for a minimum of 18 months to ensure the seamless transition of customers to a unified product roadmap. The company will continue to be led by Xactly’s management team, and will maintain its headquarters in San Jose, California.”
I expected something like this to happen eventually. Xactly secured $30 million last May, putting them in a good position to acquire another company, while having enough cash to survive a recession. That 30 million dollar also made Xactly a company that would have been very expensive to acquire.
The Centive acquisition is a huge change in the SPM market! First, because both Xactly Incent and Centive Compel were leading solutions in the 100% SaaS market focused on the small to mid market segments. As we know, SaaS companies rely on a price per payee per month model… That means that to be viable, a certain number of payees is required; and Xactly just managed to significantly increase their number of payees in a snap.
Secondly, as I said before, vendor’s balance sheets are very important, especially in a tough economic environment. One of the biggest concerns of companies selecting an SPM vendor at the moment is: “will this company be around for the next several years”. And that’s a valid concern, considering that many companies have revenues MUCH larger than those of the vendor they are selecting. By increasing its size (and revenues) significantly, Xactly should be able to reassure many of those companies.
The next hurdle will be to convince everyone that in 18 months, both companies will be able to be transitioned to a unified product roadmap. And the other major hurdle will be to actually manage to do that, without having to re-implement all the Xactly and/or Centive implementations.
Re-implementation… That’s probably the biggest concern of Centive clients who received that news today. Since Xactly made the commitment to support both solutions for the next 18 months, the news probably means “business as usual” for most people… for the next year. In the meantime, Xactly engineers have 18 months to figure out a clever way to make the transition.
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