Salesforce.com Inc is entering the business of selling human resources software in a move that raises the stakes in its battle to woo customers away from bigger rivals SAP AG and Oracle Corp..
The provider of web-based software for managing sales, customer service and marketing said on Thursday that it has agreed to buy Rypple, a closely held company with 350 customers including social networking giant Facebook and Internet music service Spotify.
Salesforce said that the deal is expected to close in the quarter ending April 30, 2012, and won't have a material impact on revenue in the coming fiscal year. It did not say how the deal would affect earnings for next year.
The company described the acquisition as the first step in an effort to build out a line of web-based human resources software for corporations.
Companies use Rypple to manage goal-setting, feedback, recognition and coaching using an interface that has the feel of modern social networking sites like Facebook.
Salesforce.com is internally developing addition human resources software to help companies with recruiting, adding new workers and training them, said Executive Vice President John Wookey, who will run the new HR business unit.
The company is currently the biggest seller of web-based business management software, but is a far smaller company than either SAP or Oracle, which provide broad lines of software that is installed inside corporate data centers.
Oracle and SAP have invested heavily over the last few years to catch up with Salesforce in the business of selling web-based programs.
SAP announced earlier this month that it planned to spend $3.4 billion to buy SuccessFactors Inc, one of the biggest providers of web-based human-resources software.
Officials from SAP and Oracle declined comment on Salesforce.com's plans.
(Reporting by Jim Finkle. Editing by Gunna Dickson)