Yesterday we reported on the shutdown of Coghead, a web-based enterprise software editor that featured an unusually intuitive interface. Today, we were contacted by the company’s CEO Paul McNamara, who informed us that software giant SAP, which previously had invested in the company, has acquired Coghead’s intellectual property assets. While Coghead will cease operations, much of the company’s team will join SAP (though McNamara will not be joining the company).
While SAP had previously invested in the company, its ultimate acquisition of Coghead is sure to raise a few eyebrows. SAP has long been associated with local enterprise software suites that require time-consuming upgrades and IT teams, and has had trouble coping with the pressure to lower its prices to reflect those offered by SaaS services like Salesforce.com (though SAP offers products that these SaaS solutions don’t).
To combat this attrition, the company recently began offering smaller upgrades, allowing customers to pick and choose the features they’d like to upgrade rather than having to spend time on large system overhauls. It has also been making strides to establish services in the cloud, which may explain the logic behind the Coghead acquisition.
Update: Some comments below note that the Wall Street Journal article referenced originally contained some inaccuracies, and that SAP may not be introducing the ’smaller updates’. However, the company is indeed expanding its presence in the cloud.
Here’s a portion of McNamara’s letter to customers:
As a customer, you know that the Coghead platform provides one of the
fastest and most efficient ways to develop applications. SAP saw great value
in our technology. SAP also saw great value in our people. As part of the
deal, many of the Coghead engineering and operations team have joined SAP as
well.Coghead began as an ambitious vision by Greg Olsen, Chelliah
Thirunavukkarasu, and Bill Trento. Along the way, the company became a
trendsetter in the cloud computing space and I want to thank all of our
employees, customers and partners who contributed to turning Coghead from
vision to reality.As for me, I will not be joining SAP, and I cannot comment any further on
SAP’s future plans for the technology or the details of the sale
transaction. However, I wish my former colleagues the best of luck at their
new home.
Brilliant move on a strategic level… but God knows how the execution (or total lack thereof) will play out for SAP.
And what does “will cease operations” mean? Does anyone know if the lights are still on for existing Coghead-built apps?
No, see the post from yesterday. They’re giving everyone until April 30th to grab their data:
http://www.tech...o-the-deadpool/
@jason – SAP has not been seeing attrition as you put it to Salesforce.com – check the numbers. Neither is it offering smaller upgrades. Again, check the details.
Dennis, I was basing that primarily on this recent report from the Wall Street Journal:
http://online.w...7470844941.html
That particular WSJ article was a major blunder. It first appeared with the title: SAP Pushes Web-Based Software – only to be redacted within hours.
The WSJ journalist was the only one ( afaik) who received pre-event briefing, and what he came out with shows a total lack of understanding SAP’s business.
SAP is trying for a while no to get into the medium and small business markets with more flexible and more affordable products. Despite those efforts they are struggling to diversify by getting away from the classic enterprise behemoth software model.
Maybe this *is* another piece in the puzzle towards a successful diversification.
why did coghead fail – conceptually I think its the way forward in a lot of ways for software development – thoughts?
I’m very sorry to see coghead go, they were indeed a trend setter in the cloud space and they made much of what we’re doing now at Iceberg (www.getIceberg.com) possible by promoting interest in the space and validating it.
I am very glad to see the team will be able to continue working on their dream
Sorry to see Coghead go. We wish them all the best.
Zoho Creator is offering free consulting for Coghead customers. More details at Zoho blogs:
http://blogs.zo...30;..-customers
We look forward to helping you make a smooth transition to Zoho Creator.
SAP venturing in to cloud computing will give lots of trouble to MS and GOOGLE.
Makes sense, I think every software platform company going SaaS need a PaaS solution.
PaaS tools are also a great way to allow business analyst to build custom applications (on-premise or not).
It’s sickenning to see SAP’s complete lack of responsibility to customers who trusted Coghead partly because they saw SAP as its backer.
Shame on Coghead VC’s not to see in themselves to pony up a small amount to keep the lights on for a few extra months and let customers have a smoother transition.
And total disappointment in Coghead management for not working out a migration plan for their customers with one of their competitors.
Frank Zamani
Founder and CEO, Caspio
http://www.caspio.com/coghead
Like Iceberg we at Procession in the UK have pioneered a new way to build web based applications no compling, core code never changes a unified approach to remove complexity using a declaritive technique now only visioned by Microsoft. Quite how SAP IBM and the likes can match on price and flxibility without cratering their core business is the big question I guess taking them out is an option let us see what SAP does bury or promote time will tell
The demise of Coghead can be seen as a blow to the burgeoning Platform-as-a-Service market, but the fact that SAP acquired the Coghead IP shows that even old timers like SAP recognize the importance of situational applications. I think if done right, it could be a huge success. No doubt there are many SAP clients that have a need for a tool like this. And the ability to use it directly with SAP data makes it extremely powerful. More discussion on this at http://www.PowerInTheCloud.com.
What an absolute shambles.
This rings alarm bells for anybody interested in building services with online apps, the big boys will watch it become successful then snap it up, take the best bits and shut you down.
What about everyone (like me) that invested weeks of effort building apps and envangelizing Coghead?
I’ve just spent a whole week building free tutorials to help small businesses innovate their IT using Coghead and it’s now in the trash can.
This is appalling and I feel sick to my core.
A very, very sad day for innovation.
Agree with Dylan Jones, this is a pretty shocking way to treat the Coghead developer base and their users. After all, they were equally responsible for making the company the success story it has been.
I was in the early stages of building a Coghead app to market, so perhaps I am one of the luckier ones.
Those that have invested heavily in the platform may find the transition to another PaaS difficult. I still have reservations about many of the other offerings out there.
I’m doubtful whether we will see a similar (read : affordable) incarnation of Coghead under the SAP umbrella, and even if we do, why would a Coghead developer who has been screwed so royally want to use SAP?
I agree that Coghead should have arranged a migration plan with one of their competitors. With these events, I am very happy that I chose XI-Factory (http://www.xifactory.com) over Coghead a few years ago. I am in total control on the hosting of my app.
After having competed with SAP on a David vs. Goliath basis in the enterprise space for several years, it seems that they may now be joining us on our home turf, what an irony!
Irony aside, Coghead’s demise is interesting both from the perspective of the end of innovative Coghead and the continuous evolvement of SAP. We have put forward a few thoughts on the matter on our homepage: http://www.isto...n-of-operation/.
Fredrik
I just wish these decision makers had truely thought of their customers, who had been so supportive of their business, when they made the decisioins.
Abandoning the customers in such way is just not ethical. Very bad!