German enterprise resource planning software giant SAP SE today said it has snapped up a startup called LeanIX GmbH, which sells tools that offer enterprises a complete picture of their entire software stacks.

The financial terms of the deal were not disclosed, but media reports elsewhere suggest SAP paid a hefty fee in excess of $1 billion to buy the startup. LeanIX’s tools can tell enterprises about every piece of software they’re using, what has been bought and licensed, and what they’re likely to add in the future.

“Systems and processes go hand in hand,” said SAP Chief Executive Christian Klein. “Together with LeanIX, we want to offer a first-of-its-kind transformation suite to provide holistic support to our customers on their business transformation journeys.”

LeanIX acts as a single source of truth for enterprises’ entire information technology landscapes. It uses an automated, data-driven approach to visualize their software architecture and flag any applications being used that may be obsolete, enabling teams to get a better understanding of their IT estates and plan for the future. On its website, LeanIX says its software supports use cases such as portfolio assessment, application rationalization, migration and modernization, plus ERP transformation.

The startup launched back in 2021 and counts more than 1,000 customers globally, including 10% of the Fortune 500 plus more than half of Germany’s DAX 40.

Keeping up with the latest trends in tech, LeanIX offers a generative artificial intelligence assistant that can help with tedious manual tasks such as documentation, creating app descriptions, and acting as an intelligent recommendation engine for IT transformation.

SAP said it’s buying LeanIX and everything it has to offer to strengthen its own suite of business transformation tools. It will add LeanIX’s capabilities to its Signavio business process automation platform that was acquired in 2021. It will also bring the tools to RISE with SAP and its Business Technology Platform.

As a result, SAP said, its customers will benefit from a fully integrated and comprehensive view of their IT applications and business processes, including all of the overlaid process dependencies. It will also allow them to map the potential impact of business transformations.

The idea is to help companies create a culture of “continuous adaptability and improvement,” SAP said. At the same time, it said, LeanIX will provide customers with a clearer path to migrate to SAP’s S4/HANA database. “Building on our decades of expertise, we’ll embed generative AI to offer self-optimizing applications and processes that can help businesses achieve key goals such as maximizing cash flow while minimizing their environmental impact,” Klein added about the plans.

Klein’s comments imply that SAP is also looking for LeanIX to serve as a foundation for AI-powered modernization, though exactly how this will look remains to be seen.

Constellation Research Inc. analyst Holger Mueller said understanding customer’s system landscapes remains a key challenge for SAP as it looks to migrate them to S/4HANA. “LeanIX can help SAP customers assess, plan and access their SAP upgrades better,” he said. “How well this will work in practice needs to be seen, as the details to be considered and the degree of automation expected as an SAP company are significantly higher than as an independent vendor.”

For the time being, LeanIX said, its platform will continue to cater to non-SAP IT estates. The acquisition is expected to close by the fourth quarter.

Photo: SAP SE