Posted by admin on February 9, 2012 under HCM Software | 
It was announced today that Oracle plans to pay $1.9 billion for Taleo Corporation, one of the leading HCM software vendors specializing in talent recruitment and management. This follows the 2011 HCM acquisitions of SuccessFactors by rival SAP for $3.4 billion and Enwisen by Lawson (Infor) for $70 million. It’s a mad race by the vendors to increase their HCM “footprint,” to move into the hot SaaS/Cloud market, and, in many cases, to lock up leading best-of-breed providers as a strategic competitive move!
These vendors are also facing fierce competition from SaaS/Cloud HCM provider, Workday, whose co-founder, Dave Duffield, founded PeopleSoft (now part of Oracle). Workday has grown rapidly since its founding in 2005 and has proven to be a formidable competitor in the large market space.
As we discussed in an earlier blog, expect to see a lot of mergers and acquisitions as SAP, Oracle, Infor and others try to acquire as many key cloud solutions vendors as they can. Keep an eye on the leading privately held vendors because in the next year or two expect to see them get acquired or go public (IPO).
So, what do you do if you’re looking for a new HCM solution? Hang on to your hat because it could be a wild ride!
Acquisitions can be very difficult for a company and its customers in terms of technology, integration, processes, culture clashes, resources, support, organization changes, turnover, knowledge transfer, etc. And, it’s not any easier with an IPO as resources may be diverted to support IPO activities and repercussions. Disclosure requirements, shareholder requirements, legal issues, stock options, and SEC compliance have a big impact on standard operations, employees and customers.
It’s critical that you plan how you will mitigate the risks in this turbulent environment. Stay tuned because we will be blogging with tips to help you successfully navigate these rough waters.
Posted by admin on December 23, 2011 under ERP Software, HCM Software |
A couple of weeks ago, SAP announced the acquisition of SuccessFactors – a Talent Management/HR software solution. There has been a lot of commentary regarding the high price that SAP paid for this company on the heels of Oracle’s acquisition of RightNow. Clearly these large traditional ERP/database vendors (SAP and Oracle) are doing everything they can to move quickly to the SaaS/Cloud market and the fastest way to do that is to acquire an established company.
While the acquisition of SuccessFactors looks like a good play for investors, we look at things from a practical end user standpoint. The main question is, what will SAP do with this product? Our take is that in the short run, there will not be much change with regard to current SuccessFactors customers. However, in the medium run, we would imagine that a standard interface will be made to the SAP R/3 product offering a cloud talent management solution to SAP’s existing customer base. In the long run, SuccessFactors could become part of a suite of cloud products offered by SAP.
It is important to note that SAP has built a cloud ERP product called Business By Design (BBD). However, at this time, BBD is really geared to the lower end of the market and does not scale up to the level of companies that would have a separate Talent Management solution like SuccessFactors, so an interface between these products does not make sense at this time. At this time, SAP’s current cloud software portfolio includes a high end Talent Management solution and a low end ERP product. This means that SAP will likely make other Cloud software acquisitions over the coming months.
This will be the last post to the Software Evaluation Blog for 2011. We wish everyone a great holiday season and look forward to providing more software vendor insight in 2012!
Posted by admin on August 1, 2011 under ERP Software, HCM Software |
Workday is a cloud based Human Capital Management (HCM) and financial/ERP software solution that has a lot of momentum in the market right now. Founded in 2005, they have grown rapidly and now have over 600 employees. They currently have 200 HCM installations and 12+ financial/ERP installations.
But in order to really understand this product, you need to understand it’s history and close relation to Peoplesoft. After Peoplesoft was acquired in a hostile takeover by Oracle a few years ago, Dave Duffield (the founder of Peoplesoft) left Oracle and started Workday. He wanted no part of Oracle and saw this as an opportunity to start fresh with a new solution based on the up and coming cloud environment. With a new software offering, he would have no legacy install base to maintain and could develop the product on the latest technology. In fact, many Peoplesoft veterans now work for Workday.
Workday is following exactly the same model that Peoplesoft used 20 years ago in the early 90’s. The strategy is to provide a Human Resources (Human Capital Management) software solution and then move into the financial/ERP software space. Basically this product is a PeopleSoft sequel!
Workday is built on an open source technology stack that includes Linux, MySQL database, Java, and Tomcat. Because they are fairly new, they are still building out functionality – especially on the financial/ERP side. As a cloud solution, they promise (and this is included in the contract) that they will be up and running 99.5% of the time. Workday requires a 3 year minimum contract commitment and a typical implementation cost is 1.25 times the annual cloud subscription cost.
Like Peoplesoft, Workday focuses on larger companies with a stated target of at least 1500 employees. They are focusing on going after companies that have a traditional HCM or ERP software solution that would like to move to the cloud.
We are watching Workday closely with our software evaluation clients and it will be interesting to see if they will be able to start taking market share away from the larger traditional vendors such as SAP and Oracle. Much of their short term success will depend on the general market adoption of cloud based solutions. On the HCM side, outsourced solutions have been offered for many years, making cloud based software very viable. Workday should be able to make inroads into that market quickly. On the other hand, companies have been slower to adopt the cloud model for ERP and there are fewer true cloud based solutions. While this makes for a more difficult sell in the short run, this also offers an excellent opportunity for Workday to penetrate the ERP market when (and if) the market turns toward the cloud model for ERP.
