TTL’s Perspective: SAP’s Acquisition of SmartRecruiters

On Friday, August 1, 2025, SAP announced that it had acquired SmartRecruiters in a deal expected to be completed in Q4. The terms of the acquisition weren’t released, but it represents, in our view, a big shift in the center of mass of the Applicant Tracking System ecosystem and the Talent Acquisition ecosystem more broadly. It is another important chapter in the “Great Aggregation” taking place within Talent Acquisition, particularly among ERPs.  Workday’s acquisition of HiredScore and HireVue’s acquisition of Modern Hire are examples of two recent blockbuster acquisitions. After a long push to innovate, develop, and scale in a hiring-friendly environment post-pandemic, significant cutbacks in hiring and recruitment budgets pushed vendors toward industry consolidation. At the same time, point solutions look for an exit in an adverse market while major TA suites look to innovative vendors to add functionality, talent, and scope to core platforms.

SmartRecruiters Fills Key Gaps in SAP’s TA Offering

We hope that the acquisition will allow SAP to build SmartRecruiters’ strengths into its products, particularly SuccessFactors. In our survey research, SuccessFactors consistently ranks below its ATS competitors in terms of ease of use and overall satisfaction. SmartRecruiters is the opposite and is one of few standout platforms that can balance ease of use with configurability usually reserved for the large enterprise-grade ATS platforms like Workday. Right now, user experience is high on the list of ATS customer priorities, and it can be difficult to find an ATS that is enterprise-capable with an excellent UX. SmartRecruiters meets that need, and it is one of the top emerging vendors in a crowded ATS marketplace. On the other hand, for SAP, acquiring SmartRecruiters removes a key competitor and builds a best-in-class ATS into its growing TA ecosystem.

In its press release, SAP cites SmartRecruiters’ embedded TA analytics and AI capabilities as motivations for the acquisition. SAP wants its TA and TM technology to be more data-driven, efficient, and automated. This would be a great step for SAP SuccessFactors, for one.

Big Questions Remain about Integration and Impact

Looking at SAP’s track record of acquisitions, we’re unsure if we can see a clear path that brings the best of SmartRecruiters into a unified SAP ecosystem. For instance, SAP acquired Fieldglass to build up contingent workforce management alongside TA, but there still hasn’t been the level of seamless integration between Fieldglass and other SAP technologies that we might have expected. SAP Fieldglass still functions more like a standalone external workforce platform. The same is true for WalkMe, the adoption platform SAP acquired last year (though the acquisition is only a year old).

It would be a missed opportunity for SAP to manage SmartRecruiters as a standalone ATS alongside SuccessFactors, with little synthesis between the two platforms. Yet SAP claims that SuccessFactors and SmartRecruiters will be offered side by side. The core models and overall experience of the two platforms is fairly different. It leaves us wondering, however, just how much of the best parts of SmartRecruiters’ design and functionality will make its way into SuccessFactors or other SAP products.

As a result, it’s hard to tell what value SAP clients will get out of the acquisition. SAP products could function much the same as they do now. It’s also hard to tell what value SmartRecruiters clients will get out of the acquisition. SmartRecruiters already offers a strong prebuilt integration with SAP. We’re not sure how much more seamless the SmartRecruiters/SAP experience will be. SmartRecruiters will continue to be a standalone ATS, so will its clients see much of a change? What will long-term pricing look like, now that SmartRecruiters is no longer competing against every other ERP ATS vendor?

A New Chapter of The Great Aggregation

We hope this will be a chapter of the Great Aggregation that will open new opportunity areas for recruitment teams, not close some off. SmartRecruiters was introducing better ways of working in the ATS. SAP’s history with HR acquisitions, and its customer feedback from our survey research, leaves us guessing about SmartRecruiters’ roadmap for innovation going forward. We’ll continue to be in touch with these vendors to learn how SmartRecruiters will be embedded into the SAP ecosystem. The depth of that integration—and, fundamentally—its timeline, could make or break this acquisition, at least for customers.

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