Qualtrics, Utah-founded cloud firm, was about to go for initial public offering this week when SAP stepped in and announced its purchase. According to reports, German-based SAP announced its plans to acquire Qualtrics on 11th November 2018. The company intended to buy the firm for $8 billion, as per the statement from the company.

SAP has already gathered funds for the purchase. In its recent funding round, SAP reportedly gathered €7 billion. The company intends to complete the acquisition process by mid-2019. Following the collaboration, Qualtrics and SAP are expected to include customer relations management (CRM) software in their portfolio. The CRM software market is currently being dominated by Salesforce. Upon acquisition, the companies may have to work really hard to beat the competition set in the segment by tech giants such as Microsoft. The acquisition could also set a tough competition for Qualtrics competitor SurveyMonkey.

Although the deal would be one of the largest deals for SAP, the move is likely to add momentum to the recent trend in which tech startups lost their identity as other major firms overtake them. This means, following the deal Qualtrics might not have the control to work independently.

During an exclusive interview with Forbes, the CEO of Qualtrics ‘Ryan Smith’ and CEO of SAP ‘Bill McDermott’ said that the two have become acquaintance over recent weeks. The two shares allot in common. For example, they have mutual customers like Under Armour. The companies have been able to work together due to certain potential synergies, as stated by Smith. Qualtrics is focusing more on experience data, while SAP on operational data.

Commenting on the acquisition, Smith said that opportunity is way better than IPO. Qualtrics plans for the IPO were based on the purpose of creating a category for the company. Smith explained that the company had no pressure in terms of investors, finance, and workforce. However, the opportunity brought up by SAP is beyond what Qualtrics could have imagined. Smith also added that it would have taken the firm a decade to grab such opportunity.

SAP was attracted by the unique culture of Qualtrics and obviously its special skills in the development of software to meet SAP’s requirement of meeting the sentiments of its customers and adding voice to a variety of SAP applications across its suite said, McDermott. Further praising the skills of Qualtrics, McDermott said that there cannot be a better combination than bringing the X data experience of Qualtrics to O data or operational data that SAP has. McDermott also added that he could have not thought of collaborating with any other firm besides Qualtrics.

Qualtrics is founded by Smith family with Ryan Smith being the co-founded with his brother Jared and father Scott. According to the company’s regulatory filing, the Smith family owes nearly 45.5% of Qualtrics. The remaining stocks were sold by the trio for $75 million in a secondary transaction that took place in 2017. After taxes, the trio stakes in the company would be worth nearly $2.6 billion.