SAP To Acquire Compliance Software Maker Virsa

Virsa's Continuous Compliance Suite monitoring and controls software helps users comply with regulatory requirements like the Sarbanes-Oxley Act and HIPAA (Health Insurance Portability and Accountability Act). Its software can be used in conjunction with ERP applications from multiple vendors, including both SAP and Oracle as well as custom systems, although Virsa's ties to SAP are particularly tight.

SAP said the deal will be an all-cash transaction, but it did not disclose Virsa's purchase price.

SAP has been reselling Virsa's flagship Compliance Calibrator security controls software since last March as an add-on to its mySAP ERP system. That alliance has netted 150 customer wins in the past year, comprising nearly half of Virsa's installed base.

Additionally, SAP's venture capital arm is an investor in Virsa, and the company is itself one of Virsa's largest customers. SAP has Virsa's Compliance Calibrator and Access Enforcer software deployed to 40,000 of its employees worldwide.

SAP is still working out its plans for Virsa and declined to comment on whether it intends to make Virsa's software available to its resellers. Pending regulatory approvals, SAP expects the Virsa deal to close in May, after which it will announce more detailed plans for Virsa's technology, according to an SAP spokesman. SAP's annual Sapphire user conferences in Orlando and Paris are scheduled for May, making them likely forums for further Virsa announcements.

One open question is how committed SAP will be to preserving Virsa's multi-platform support. Wohl suggested that SAP may use Virsa as a beachhead for attacking its Oracle ERP accounts.

"We built the business with SAP NetWeaver to be open to all technologies, recognizing that customers run a variety of different solutions," the spokesman said. "For customers that are running a mixed environment [with Oracle applications], we expect SAP would make an offer that would appeal to them."

Virsa has been a poster child for ISV partner work around SAP's NetWeaver middleware stack, AMR Research analyst John Hagerty said in a research note. He sees the deal as a smart move for SAP into an area of growing importance to customers.

"For the past few months, SAP has visibly placed compliance at the center of its application suite strategy," Hagerty wrote. "As spending accelerates in specific functional areas that are of critical interest to SAP's customers and prospects, the company will most likely fold in partner products to provide a broader application footprint."

News of SAP deal came as 10-year-old Virsa hosts its annual Simplify customer conference in Las Vegas this week. Virsa has headquarters in Fremont, California, and employs 250 people.