SAP has purchased cloud-based enterprise software company SuccessFactors for $3.4 billion. SAP, who plans to close the deal early in 2012, is paying eight times SuccessFactors' forecast revenue for next year.

 

"The cloud is a core of SAP's future growth, and the combination of SuccessFactors' leadership team and technology with SAP will create a cloud powerhouse," says Bill McDermott, co-chief executive of SAP.

 

SuccessFactors, which makes software used to manage employee performance, has more than 3,500 customers and 15 million subscribers in 168 countries. The company is predicted to have $502 million in revenue in 2013, according to analyst estimates compiled by Bloomberg.

 

Industry leaders like SAP have been searching for smaller companies that provide services through the cloud. Recently, Oracle purchased RightNow Technologies, which makes cloud-based customer service software, for $1.43 billion.

 

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