SAP discards Ace of Sybase: Digital Interconnect unit sold for $250 million

Swedish cloud comms firm Sinch has snapped up SAP Digital Interconnect for around €225 million ($250m).

SAP has been looking to off-load its mobile communications division since last month, so the sale agreement is not a surprise - though the price maybe is.

Sinch said the combined entity would create a platform for messaging, voice and video supporting almost 70 billion engagements per year and customers including global technology companies, banks, payment gateways, retail brands, and mobile operators.

SAP Digital Interconnect provides APIs to support messaging across SMS and email to help organisations connect with customers or other external parties. SAP bought the technology in 2010, with its $5.8bn Sybase acquisition. Sybase itself had purchased the technology, as Mobile 365, back in 2006 for more than $400m. The business unit makes up to circa €340m (€367m) in revenue for SAP according to reports.

Digital Interconnect includes three divisions: Programmable Communications for customer engagement through SMS, push, email, WhatsApp, WeChat and Viber; Carrier Services for mobile operators; Cloud Solutions for Enterprises for contact centres and event management.

By off-loading Digital Interconnect, SAP is concentrating on the core enterprise application business where it striving to convince customers to upgrade to the latest S/4HANA database. Lest we forget, SAP also bought Qualtrics International for $8bn in 2019, its largest acquisition to date. Qualtrics is a specialist in CRM, customer experience and customer survey, and has its own multi-channel messaging platform.

For Sinch, the deal beefs up customer support, operations and engineering resources in the US. And it gives the Swedish firm a foothold in the Bay Area on the west coast where Digital Interconnect is based, as well as a bigger presence in Europe, Asia-Pacific and India.

Oscar Werner, Sinch's CEO, claimed: "The transaction strengthens our direct connectivity globally. Plus, it enables us to expand and accelerate a range of business-critical services to mobile operators, including products for person-to-person messaging, reporting and analytics."

With falling market values around the world, Sinch has been on an acquisition spree this year. SAP Digital Interconnect completes a trio of takeovers, which includes Wavy, a Latin American provider, for £98m and chatbot/voicebot firm ChatLayer for £6m. ®