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Kenexa bought by IBM – What this means for Talent Acquisition

Until this morning’s announcement by IBM to purchase the Talent Acquisition/Management Technology & RPO firm, Kenexa, it was the last of (what I consider) the old school big players in Talent Acquisition/Management to still be standing.

Virtual Edge, Taleo, SuccessFactors.

All gone.  And along with them went a host of other solutions they had acquired out of marketshare in the Talent Acquisition Space – Recruitmax, Vurv, Jobs2Web, Learn.com, Cytiva, WetFeet, JobPartners…the list goes on)

While the Virtual Edge/ADP play seemed to push VE down market and  be more for the relationship existing with SAP at the time and less for the success of the Virtual Edge Solution (Which, at one time, was the far superior solution in a lot of ways), the  Taleo and SuccessFactors acquisition’s were far more strategic to either complete a HCM offering or round out a solid enterprise business solution.

Which left the enterprise business market (SAP, Oracle) squarely in the human capital’s talent management market at the most fundamental levels…and a clear hole in the overall IBM offering.  A big, relevant name in the space was going to be required and outside of the technology Kenexa offers, they have a solid RPO solution that could build additional service depth for what IBM already has in the BPO (Business Process Outsourcing) marketplace.

For Silkroad and Icims – the brand awareness, product kinks and social strategy they have been quietly developing the last few years should be front and center.  They just were handed a ladder to climb up market.  Take it.

For other key players in the talent mangement market – now is the perfect time to really take strategic advantage and create/brand/sell some innovative talent acquisition tools that compliment your existing talent management solution.   If I were Saba, I’d be taking the social collaborations and performance tools shown as the summit this spring and roll out an offering to an entire marketshare that really has no clue who I am or what I do.   If I were Cornerstone OnDemand, I’d realize that have a perfect opportunity dive into a market that, outside of the analyst, really has little to no knowledge of them and despite modest efforts at key industry events, haven’t seemed to have cracked.

But what does this really mean for Recruiting & Talent Management Technology Buyers?  More than you probably think.

For buyers in the space the “suite” of products they were pushed to purchase when point solution shopping – will now include more business process and outsourcing components than ever before.    Its also going to limit options for a number of companies when they start down the path of selection – if you already have X in your business process, it would make sense to extend that same solution into human resources – regardless if it is the best product for your organization.

For buyers with some flexibility, expect three things:

  1. More add on solutions (like Talemetry who already does extensive work with Oracle clients and now extending to other vendors) to pop up and fill in the gaps where products are lacking around social, sourcing and onboarding.   (I talked about this in my 5 Strategic  Trends in Talent Acquisition Report this Spring)
  2. More companies taking a look at solutions that never seemed to get as much PR/Analyst coverage but have a number of enterprise clients and competitive solutions
  3. More point solutions will release their own “lite” or even full functioning ATS that plays nicely and can just sit in front of the “big” solutions – much like Avature has been doing for years.

Most importantly, if the heavy acquisition phase of the early 2000’s taught us anything, it is that for buyers – this stuff always works out better in the long run.  People will always pop in to replace the vendors that are gone.  Innovation increases, prices decrease and overall the market is forced to become more competitive with its self.

This last old Tier 1 talent acquisition solution marks the end of an era.  

And the beginning of a new, social, innovative driven one the likes of which we haven’t seen for nearly a decade. 

 

Check out the downloadable whitepaper on this acquisition here

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Sarah Brennan

Sarah Brennan is a recognized HCM industry analyst and advisor focused on improving the impact of technology on people, business and the future of work.  Sarah Brennan has been named a top global influencer in HR Technology by more than 50 publications and shared her insights at speaking engagements around the world. As Chief Advisor at Accelir, she partners with HR Technology vendors and investors as an advisor, interim CxO role and on engagements focused on growth strategies, product roadmap & market education/evangelism. She also works with corporate teams enhancing talent strategies.

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9 Comments

  1. Paul Mladineo August 27, 2012

    Sarah
    Good thoughts but curious where you think Peopefluent fits/will fit. Though they have fewer clients than Kenexa, they have both enterprise and SMB offerings in the talent acquisition and management space.
    Paul M.

    Reply
  2. Sarah White August 27, 2012

    Paul – To be honest, I haven’t been briefed on their product in about a year (HR Tech last year I think) and it looked to be on the right road – but they have been quite silent in the Talent Acquisition space and even leading up to general HR events like SHRM in June around what they are doing – much more so than iCIMS and SilkRoad.

    There are a number of vendors that I’m going to be meeting with at HR Tech in October and have a feeling this announcement shifts them even a little bit more in one direction or another. I am very optimistic for a number of the vendors in the space on where things are going to shake out – assuming they take the advantage they have been handed.

    Reply
  3. Bill Meidell August 28, 2012

    Sarah,

    Great post, great insight.

    You mention that buying behavior for applicant tracking systems might shift to single vendor vs. best in breed in this article; but you also seem to hint that this creates an opportunity for innovative, complementary tools.

    Does your gut / insight lead you to believe that the large enterprise software companies are more likely to see which new recruitment technologies will emerge, and acquire them in the future? Or do you see the Oracle’s of the world working to build new apps themselves?

    Reply
    1. Sarah White August 28, 2012

      Thanks Bill,

      I absolutely believe that we will see more technologies emerge independently (VC backed, angel, etc) vs the big guys building more apps. Start-ups and even younger companies then to have a lot more flexibility when it comes to building something innovative because they aren’t stuck with roadmap or existing technology constraints – then once its built they worry about how to partner with the big guys…Look at the number of additional product that popped on the market purely to plug-n-play with that one solution – Avature, Talemetry, TalentBin, Hirevue (Wowzer/Async/Active etc), Jobs2Web (smashfly, etc) have all built big businesses on being an “add-on” product because a vendor either couldn’t or didn’t want to address client needs around sourcing and recruiting.

      sw

  4. Susan Vitale August 31, 2012

    Really enjoyed the post, Sarah. We’re climbin’!

    Reply
  5. Thomas T November 30, 2012

    What is your take on ICIMS? Onboarding and ATS. Thank you.

    Reply
  6. Derek Gillaspy July 13, 2013

    100% agree with enterprise stack being forced down recruiting’s throat.

    I’m hearing this weekly with prospects that “Oracle is already approved by IT” but “I hate taleo” but “its not my decision to make (VP Talent) so I just have to force taleo to work, what else you got besides ATS [that integrates to Taleo]?”

    A current SAP HRIS customer said, “We launched an RFP to see if we could find someone with a compelling argument that could save us from having to use (competitor) ATS. So far looks like we’ll be using (competitor).”

    Also agree that the innovation/investment won’t go into modules/apps/additions to the Large Stack (IBM, SAP, Oracle) – the ATS is already viewed as a module/app/addition to the bigger vision – HR complete Stack. The big boys view ATS as having checked the box for recruiting in a WFP/Recruiting/Onboarding/Training/Org Dev view of HR. It is a laggard view that creates the opportunity that you rightfully point out – more innovation around ATS, and ATS becoming more of a giveaway/commodity.

    We’ll see less functionality and simpler processes happening inside the ATS, and more user time spent in CRM+.

    -DG

    Reply

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