Update on SAP and SuccessFactors

Thought I’d post this write-up from Bill Kutik, our HR Technology columnist and co-chair of our HR Technology Conference, who was briefed by SAP and SuccessFactors last week about the post-merger plans for the two companies’ products (SAP recently acquired SuccessFactors). Bill posted this on the HR Technology Conference Users Group on LinkedIn, and if you’re at all interested in anything having to do with HR technology, I strongly urge you to join this group. Registration is free, of course, and you needn’t have attended (or be planning to attend) any of the conferences.

Speculation Rages On About Oracle’s Acquiring Taleo

BY BILL KUTIK/ Influencers were briefed last week under embargo about today’s SAP and SuccessFactors announcement. The biggest news is SF will create SAP’s next generation SaaS replacement for its large company on-premise R/3 HCM. Just like Lars said two months ago! This doesn’t mean on-premise customers will be abandoned. SAP has committed to support R/3 (now called SAP ERP HCM) until 2020. While there will be minimal innovation and development in the on-premise Talent Management apps (that’s being saved for SF’s TM suite), the Core HRMS will get a new user experience and UI, Analytics, Mobility and Hana (SAP’s in-memory database).

The next gen product will come from accelerated development of SF’s Core HRMS product – Employee Central – and its continued integration with the existing TM suite.
SAP is taking dozens of experienced HRMS product managers and engineers from its own SaaS initiatives – Business ByDesign and Career OnDemand (now dead) – to work with the SF teams of VP Global Product Management Dmitri Krakovsky and VP of Engineering Adam Kovalevsky, a long-time PeopleSoft veteran. What is it with Lars and Russians?
Making that SaaS Core HRMS fully multi-national and useful for compliance is a terrifically complex task, despite Employee Central already having 100 customers. The effort has a slight chance of being derailed by SAP traditionalists who have always insisted all its ERP applications be on the same platform but that seems unlikely.When it is finished, the fully integrated SaaS HRMS/TM solution will be the perfect product to compete directly against Workday, which has a head start of several years. “We see the competitive threat from Workday,” says SAP’s David Ludlow, Group Vice President, Line of Business Solutions HR, SAP Labs, also speaking for his new comrade in arms, Dmitri. Uh, yeah.

Workday is much on the minds of Oracle, too, as it shapes and internally communicates plans for how to use Taleo’s market-leading big company recruiting application, as well as its full TM suite. Being such new software, Oracle Fusion HCM is apparently having a tough time competing against Workday, whose HCM is already six years old. In a recent announcement, Oracle said Fusion HCM had 50 customers signed, but much smaller companies than many of the PeopleSoft and SAP clients Workday is now targeting and taking away for its SaaS system. Yesterday, Workday reporting having more than 280 HCM customers signed and more than 25 for Core Financials. Average size is 15-20,000 employees.

I always assumed Oracle would use Taleo Recruiting and Learning to plug the two major holes in Fusion HCM and toss the rest away (Performance Management and Compensation). But Josh Bersin says Oracle is telling Taleo employees that it wants as many of them to stay as possible. So maybe a different plan is afoot. What would you do with Taleo if you were Thomas Kurian or Steve Miranda, Oracle’s top two product executives? As for the rest of SAP’s announcement, I leave that to others. Much of it makes good on what was telegraphed two months ago, including SF operating independently as “SuccessFactors, An SAP Company,” even keeping its own SuccessConnect spring user conference! A potent symbol of independence.
Does anyone imagine Oracle will stage the next Taleo WORLD in September?

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