Can WalkMe’s Refocused Strategy Drive New Logo Acquisition and Revenue Growth?

Analyst(s): Keith Kirkpatrick
Publication Date: January 23, 2025

WalkMe, a digital adoption platform acquired by SAP, held its analyst day in Miami, at which executives from both companies discussed their shared vision for driving digital transformation as a continuous capability, not just a one-time project. At the event, SAP unveiled its plans to offer WalkMe as a freemium offering in conjunction with its applications, bundle it with S/4HANA transformations, and also let WalkMe sell it independently to customers for use on any third-party application or platform. This multi-pronged approach, including vendor-agnostic sales, aims to capitalize on SAP’s vast customer base and drive WalkMe’s growth, particularly with its AI-powered assistance tools.

What is Covered in this Article:

• SAP’s Acquisition Strategy: SAP acquired WalkMe to enhance its digital transformation offerings, particularly in addressing the “people” aspect alongside applications (LeanIX) and processes (Signavio). This aligns with their vision of continuous transformation, driven by technology innovation.
• WalkMe’s Multi-Pronged Go-to-Market: SAP plans to offer WalkMe through various channels: as a freemium on SAP applications, bundled with S/4HANA transformations, and as a standalone solution for any platform, including competitors.
• Focus on Digital Transformation as a Capability: WalkMe’s platform emphasizes continuous improvement and adaptation to evolving technologies. Its AI-powered features aim to automate tasks and accelerate user adoption, making digital transformation an ongoing capability rather than a one-time project.
• Vendor-Agnostic Approach: SAP and WalkMe are strategically targeting customers using diverse application stacks, recognizing the reality of multi-platform environments and maximizing market opportunity.

The News: WalkMe held its annual analyst day in mid-January in Miami, FL, where executives from the company discussed the company’s acquisition by SAP, the product roadmap, and the future initiatives and sales strategy that is designed to drive new logo acquisition and revenue growth. Executives from SAP also provided their perspective on how the acquisition of WalkMe supported their overall corporate strategy. Several customers provided case studies detailing the benefits they’ve already derived by using WalkMe.

Can WalkMe’s Refocused Strategy Drive New Logo Acquisition and Revenue Growth?

Analyst Take: WalkMe is a digital adoption platform that is designed to help organizations derive the most benefit from their technology investments, by ensuring workers are able to quickly get up to speed and leverage the features and capabilities of their platforms and applications. WalkMe also provides enhanced visibility into which resources are being utilized, and offers management tools that help ensure efficient and safe use of company technology.

SAP announced it had completed the acquisition of WalkMe in September 2024, and the Analyst Day (held in conjunction with WalkMe’s Sales Kickoff meeting) was the first opportunity for WalkMe and SAP executives to share their vision and plan for the newly acquired entity with the industry analyst community.

Rouven Norato – CRO & GM, Business Transformation Management, SAP, Dan Adika – WalkMe CEO, and other leaders from WalkMe discussed the company’s refocused strategy, which incorporated a multi-pronged approach to customer acquisition, growth, and support.

Transformation as a Capability, Rather Than a Destination

One of the key messages that was delivered by both WalkMe and SAP leadership was that WalkMe’s DAP is designed to help organizations ensure that digital transformation is viewed as a capability, rather than a project with a fixed or finite end point. This will be critical as the pace of technology innovation will only continue to accelerate.

SAP’s approach is underscored by its recent acquisition activity. LeanIX, Signavio, and WalkMe, are focused on addressing each critical capability involved with digital transformation and readiness: applications, processes, and people, respectively. Tying everything together is an underlying data layer, powered by SAP.

As an example, an organization that initiated a digital transformation project with a completion date of 2022 would have completely missed the boat on the generative AI revolution. That’s why we believe that SAP, and by extension WalkMe, is well positioned to provide digital transformation capabilities that incorporate a people-centric approach that aligns IT and business, enables increased visibility and measurement, and incorporates advanced AI and AI-ready technology.

How SAP Will Activate WalkMe

As part of SAP, WalkMe is being used to not only support SAP’s goal of driving adoption of its core applications, but also leverage WalkMe’s omnipresent capabilities (through the WalkMeX AI offering) that SAP currently doesn’t have. SAP says it will offer WalkMe in three primary ways:

• Offered on a freemium basis on top of its other applications, with the goal of upselling a complete version of the application.
• Sold on top of Rise with SAP S/4HANA transformation programs, with the goal of helping to drive adoption of its cloud-based, clean-core platform.
• Sold as a standalone application to work with any third-party platform or application, including those that compete with SAP.

This three-pronged approach seems to make sense for WalkMe, which has seen revenue increases, but only modest subscription growth. The freemium model, in particular, is interesting as it will help provide organizations that are unfamiliar with WalkMe, or want to validate the potential ROI themselves, with the opportunity to do so with little financial risk. According to WalkMe, the subscription product will include a full analytics suite, which is a great incentive for organizations to make the leap to a fully paid license.

Leveraging SAP’s Rise with SAP program to drive subscription revenue also appears like a solid strategy; organizations that are undergoing this transformation are usually seeking to get employees up to speed very quickly. WalkMe’s AI-powered assistance tools don’t merely guide or instruct users how to accomplish a task, but will intuitively learn processes with the appropriate context, enabling tasks to be automated, resulting in faster software and process adoption.

Perhaps most interestingly, SAP and WalkMe are actively embracing a vendor-agnostic approach to sales, seeking out customers that may use other third-party platforms and tools that are direct competitors to products offered by SAP. This is an extremely smart approach, as there are very few organizations that are truly single platform, and SAP/WalkMe would simply be leaving money on the table by not embracing the ability to support customers that are not currently, or are unlikely to ever become SAP customers.

The Potential Long-Term Impact on WalkMe

WalkMe is likely to see significant benefit as a result of its acquisition by SAP. SAP has a massive customer base to which its DAP and WalkMe X offerings can be sold. Furthermore, SAP’s current push to migrate customers to its cloud-based platform is a perfect use case upon which organizations can leverage WalkMe’s offerings to quickly ensure ROI during and after the migration to the S/4HANA platform.

WalkMe is also likely to generate incremental revenue from its strategy of being vendor agnostic, instead of tying itself only to SAP applications. Even though there is an ongoing push to consolidate application stacks in the name of efficiency and security, the reality is that most organizations will continue to deploy a heterogeneous application stack consisting of an underlying platform, plus additional point solutions to meet specific needs.

This assertion is confirmed by Futurum Intelligence’s 2024 Enterprise Decision Makers Survey, which found that 62.6% of respondents used a platform supplemented by point solutions to handle their enterprise application needs, while 24.6% used a combination of point solutions. Just 13.2% of enterprise decision-makers said they used a single platform to meet their enterprise application needs. The survey was fielded in November 2024, and included 895 respondents that were either technology purchase decision-makers or influencers.

Organizational Approaches to Purchased Applications

What to Watch:

• WalkMe will need to execute on all three legs of its revised go-to-market strategy in order to generate faster revenue growth.
• WalkMe X, the company’s AI offering, will need to be properly positioned as not just a collection of features, but as tools that can directly impact business metrics, in order to stand out above the competition.
• The features and capabilities in the freemium WalkMe offering may need to be tweaked in order to balance ROI capability demonstration against the potential to drive subscription sales; we would expect some adjustments as the program matures.

See the complete press release highlighting the completion of SAP’s acquisition of WalkMe.

Disclosure: The Futurum Group is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.

Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of The Futurum Group as a whole.

Other insights from The Futurum Group:

SAP Embeds AI Across SuccessFactors Suite: Transforming Workforce Management

WalkMe Spotlights DAP Professionals as Catalysts for AI Transformation

WalkMe Posts Mixed Results for Q2 2024

Author Information

Keith Kirkpatrick

Keith has over 25 years of experience in research, marketing, and consulting-based fields.

He has authored in-depth reports and market forecast studies covering artificial intelligence, biometrics, data analytics, robotics, high performance computing, and quantum computing, with a specific focus on the use of these technologies within large enterprise organizations and SMBs. He has also established strong working relationships with the international technology vendor community and is a frequent speaker at industry conferences and events.

In his career as a financial and technology journalist he has written for national and trade publications, including BusinessWeek, CNBC.com, Investment Dealers’ Digest, The Red Herring, The Communications of the ACM, and Mobile Computing & Communications, among others.

He is a member of the Association of Independent Information Professionals (AIIP).

Keith holds dual Bachelor of Arts degrees in Magazine Journalism and Sociology from Syracuse University.