Oracle Buys Taleo
Well it did not take long for the other shoe to drop.
Today it was announced that Oracle intends to acquire Taleo. There has been a lot of speculation that this would be the next big acquisition and I think it makes a lot of sense. We took a poll here at InsideTMT and 50% of the respondents thought so too.
Here is the message from Taleo's CEO Michael Gregoire:
Taleo Customers and Partners,
On February 9, 2012, Taleo announced that it has entered into an agreement to be acquired by Oracle Corporation. The proposed transaction is subject to Taleo stockholder approval, certain regulatory approvals, and customary closing conditions and is expected to close mid-year 2012. Until the deal closes, each company will continue to operate independently, and it is business as usual.
Together, Oracle and Taleo expect to create a comprehensive cloud offering to help organizations improve the performance of their business by unlocking the power of their people. The combination is expected to empower employees and managers to effectively manage careers throughout their entire employment, enable organizations to retain talent and optimize costs, and improve the employee experience through faster on boarding and better collaboration with team members via social media.
Taleo’s industry leading talent management cloud is an important addition to the Oracle Public Cloud offering.
We look forward to continuing to deliver the solutions and services that you have come to expect from Taleo and will be providing you with important updates on how this combination will benefit our customers and partners around the world.
It will take a while to fully digest and appreciate the significance of this transaction, but here are a few initial thoughts:
- While people will probably talk about this being a cloud computing strategy - for me it is more about adding rich talent management capability. Just like SAP, Oracle would routinely lose business to the "best in class" SaaS products when competing for Talent Management deals.
- I think this gives Oracle a slight edge over SAP because Taleo is the dominant player in Talent Acquisition. If you look at the deals where the ERP/HRMS vendors are getting slaughtered, it's when Talent Acquisition is a high priority. SuccessFactors was much weaker in recruiting, although with the acquisition of Jobs2Web they have a fighting chance.
- This will create some questions for Taleo clients who run SAP, but they can sit tight for a while. It will take years to shake out and SAP and Oracle already have many mutual clients running different parts of their platform.
- I think for any Oracle/PeopleSoft shop who is out looking at "best in class" talent management products, Taleo will go to the top of the list and they will be less likely to look at SuccessFactors - but it still won't be automatic.
- The remaining Talent Management Suite products will probably also benefit. When competing for deals in an Oracle/Peoplesoft or an SAP shop they will likely only be up against one of the top two players.
- Customers who are suffering through PeopleSoft TAM implementations might see a light at the end of the tunnel, but dumping TAM for Taleo won't be cheap.
Even though this was quite expected, my head is still spinning. It is just further evidence that this is going to be a really fun year in Talent Management Technology.