Oracle swoops to swallow Taleo
Three’s a trend, right? If so, then we can confidently say that there’s a consolidation movement underway in the Cloud apps space – and it’s looking increasingly HCM in flavour for now.
Today Oracle has swooped to swallow Taleo in what can only be seen as a counterstrike to SAP’s takeover of SuccessFactors and further recognition of the nervousness the firm feels about the onset of start-up Workday. It comes only a week after Oracle closed its last Cloud takeover in the shape of RightNow.
Oracle’s ready to pay $1.9 billion for loss-making Taleo, a substantial mark-up on the acquired firm’s closing stock price last night. Thomas Kurian, executive vice president of Oracle Development, reckons it’s worth it:
Taleo was running at a loss, but has some impressive clients. Last week it named Intercontinental Hotels Group as its latest client. The hotel chain plans to hire 400,000 people over the next 4 years and plans to use Taleo’s talent management funcationality to manage this process.
Oracle has skin in the HCM market of course, most notably with its PeopleSoft applications (acquired several years ago in a very hostile takeover) and its own next generation Fusion applications, the first tranche of which are HCM-focused.
But the market has become considerably more complicated. While PeopleSoft has long been the most prevalent HCM software, many organisations around the globe are reaching a systems refresh point – and many of them in turn are looking at the new breed of Cloud Computing applications firms.
In December last year, SAP shocked the market by agreeing a takeover bid for Cloud firm SuccessFactors, a bid which seems now to be in its final stages of completion to beef up its Cloud functionality, while Cloud pureplay Workday (from the people who originally brought you PeopleSoft) is gearing up for an eagerly anticipated stock market floatation later this year. Salesforce.com has also moved into the HCM orbit with its own acquisition of Canadian firm Rypple.
Now Oracle has ramped up its own Cloud credentials. The firm’s CEO Larry Ellison has been notoriously sceptical about the concept of the Cloud, openly mocking it as a marketing fad. But in recent months, the firm has learned to love the Cloud, taking over RightNow and now Taleo. Tim Jennings, chief analyst with research firm Ovum, commented:
Jennings added: