HCM and Talent Merger Wars Claim More Victims

By Jim Lundy

With the announcement today that Oracle is in the process of buying Taleo less than 60 days after SAP announced it was buying SuccessFactors, the race is on to offer the most complete talent/HCM suite.

This also comes on the heels of Kenexa announcing yesterday that it was buying learning suite provider  Outstart. We will be publishing First Cuts on both announcements, but here are a few first observations about the industry.

HCM and Talent: SuccessFactors Was the First of Many

In our First Cut we published last month, we advised our readers and clients that the SAP/SuccessFactors deal was a trigger event and that at least two additional mergers would occur in the first half of 2012. Our specific comments then were:

“Planning Assumption: By midyear 2012, at least two major HCM/Talent providers will be acquired. The technology providers that become candidates for bigger mergers include:

– Taleo (core competency is recruiting)
– Saba (learning, talent, and collaboration)
– Cornerstone OnDemand (talent suite)
– Workday (HCM and talent)”

It is February and there have already been two merger announcements, so what is next?

HCM and Talent: Is Oracle Flanking SAP’s Move?

Clearly, while the big news might be perceived that SAP made a move and Oracle has countered, the reality is that these events represent the consolidation of talent and HCM markets. Many knew this day was coming and one thing is sure—there are many other vendors (in talent, HCM, and learning) who will be bought.

There will still be a lot of purchasing of best-of-breed solutions, but for larger players, they will have no choice but to beef up their suite, particularly in social and learning offerings.

What that means for the enterprise that has to deal with all of this is where we come in. Check back for our First Cuts on these events and look for more premium research on where this market is headed and how to navigate during these interesting times.