Oracle Buying Taleo for $1.9 Billion in Direct Hit at SAP - herronoverniseents1972

Oracle is purchasing cloud-based talent direction and employee recruitment software seller Taleo for roughly $1.9 billion, the company proclaimed Thursday. The move comes shortly after SAP's move to adopt SuccessFactors, a close contender of Taleo, for $3.4 zillion in a deal that has yet to incommunicative.

"Quality capital management has become a strategic initiative for organizations," said Thomas Kurian , executive director V.P., Oracle Development, in a statement. "Taleo's industry leading talent management cloud is an large addition to the Oracle Public Cloud."

The Taleo deal is expected to enclose the middle of this year and is subject to shareholder approval, Oracle said. Taleo's board has unanimously approved the sale.

Taleo's applications revolve about talent management, which includes areas such as recruitment, learning and development, and compensation and succession planning.

It remains to constitute seen exactly how Taleo's intersection portfolio will be straight with Oracle's Spinal fusion HCM (human capital management) software, which is also available as a corrupt offering, and has some overlapping functionality.

Collectively, the companies "expect to produce a comprehensive cloud offering for organizations to manage their Human Imagination trading operations and employee careers," Kurian said in a alphabetic character to customers. The resulting products will "authorise employees and managers to effectively manage careers end-to-end their entire employment, enable organizations to retain gift and optimise costs, and better the employee experience through faster happening boarding and better collaboration with team members via social media," he added.

Some 5,000 enterprises use Taleo's software, which also handles 15 pct of employee hires in the U.S., according to an Oracle document. About half of the world's top career websites extend to Taleo Eastern Samoa well, Oracle said.

SAP has characterized the unfinished SuccessFactors purchase As something that will give the company needed "defile DNA" and expertise in that market.

Prophesier's announcement of the Taleo deal included no similar sentiments, merely Taleo is its second major acquisition, along with customer-service vendor RightNow, of a cloud application seller in the retiring six months.

Since SAP announced the SuccessFactors deal, speculation had run rampant that Oracle would make a move in response, with Taleo bandied virtually as a potential acquisition target.

Salesforce.com has also begun a push into human-resources software with its recent acquisition of Rypple, which focuses on employee execution management.

Unlike new package categories, the types of products sold by SuccessFactors, Taleo and Rypple have relevance to every employee in a society, allowing for more profitable large-scale SaaS (software equally a service) deals.

There bequeath believable be additional acquisitions in the HCM sphere soon, said HR software analyst Naomi Bloom, managing partner of the consulting stable Bloom & Wallace. "I think we can bear that the boards of Foundation, of Ultimate Software, they are beyond any doubt having conversations at least among themselves if not potency acquirers."

Oracle's move doesn't have "much to do with a technology steal," Blossom added. Instead, as with the acquisition of ERP (endeavor resource planning) vendor PeopleSoft, Prophesier is superficial to take away a contender and pull ahead a revenue stream, she said.

Taleo also has been moving a SaaS byplay and has a lot of cognition that will be healthful to Oracle, Bloom said. While Oracle has yearn sold an on-take CRM (customer relationship management) lotion, that experience isn't as relevant since dissimilar human resources, CRM isn't taxable to government regulations and it impacts far fewer employees in an organization, she said.

Meanwhile, "if you are a Taleo customer, or Divinity forestall are in the work on [of becoming cardinal], this should put option ice body of water in your veins," Bloom same. "I have great regard for Oracle, they are an amazing financial machine. But if I'm a customer, I might look at IT otherwise."

Oracle's promulgation stated that it is currently reviewing Taleo's product guideline, and that "any resulting features and timing of release of such features" are at Oracle's "exclusive discreetness."

But Prophesier has invested heavy in its Fusion Middleware and Fusion Applications American Samoa a next-generation software platform. Therefore, Taleo customers could await some incremental improvements in the software system over prison term, Bloom said. However, "if I entered into business with Taleo because I felt they were passing to be a continuous innovation machine, that's non going to happen," she added.

The SuccessFactors and Taleo deals also could ponder biological process concern connected the disunite of some SAP and Prophet over the rise of Workday, which has landed large deals for its personal corrupt-based HCM software system, Bloom aforesaid.

"I think Oracle was drawn in to having to get along this deal," said Forrester Research analyst St. Paul Hamerman.

"I don't know wherefore they didn't make this manage five old age ago," atomic number 2 added. Oracle would have paid some less and would have primarily gained recruitment software package, Hamerman aforesaid. But today, Taleo has built out the "quaternity pillars" of gift management, videlicet recruitment, employee chore performance, compensation and learning, he said.

While Oracle has had great success selling core HR applications for payroll, benefits and other areas, it hasn't had overmuch luck with talent direction, Hamerman said.

The overlap with Fusion HCM is non that world-shaking, since it currently lacks recruitment, learnedness and succession planning capabilities, all areas where Taleo is strong, according to Hamerman. "It's actually a pretty complementary fit."

Chris Kanaracus covers enterprise software and cosmopolitan technology breaking news for The IDG Newsworthiness Service. Chris's e-mail speak is Chris_Kanaracus@idg.com