In a move that ups the ante in an increasingly crowded HR software market, IBM has acquired HR, talent acquisition and talent management software provider Kenexa.
For its $1.3 billion, the Armonk, N.Y.-based technology giant gains Kenexa’s range of technology offerings that include recruitment, onboarding, employee assessment, interviewing, performance and compensation management, career development, goal alignment, succession planning and employment branding platforms. IBM will integrate Kenexa’s approximately 2,800 employees and operations from 21 countries into its software and services groups.
According to IBM, the acquisition will help its clients “embrace social business capabilities.”
In a teleconference announcing the purchase, Alistair Rennie, general manager of social business for IBM, described how Kenexa complements IBM’s “strategy of bringing relevant data and expertise into the hands of business leaders within every functional department from HR, sales, marketing to product development.”
“Kenexa has always applied a science-based view to key processes—locating talent, helping it perform better,” he said. “Combined with our expertise, it’s an absolutely perfect fit. Our capabilities combine perfectly to create outcome-driven perspectives for our clients.”
The transaction, which IBM expects to close in the fourth quarter, brings Big Blue into a talent management software market that already includes Oracle and SAP, with those companies having acquired Taleo and SuccessFactors, respectively, earlier this year. This latest acquisition has tremendous potential to shake up an ever-more competitive space, says Jason Averbook, CEO of Minneapolis-based HR consultancy Knowledge Infusion.
“Kenexa is not only an application vendor, but has a tremendous mix of value-added services and expertise that makes its value much more than just an application play, but a pure solution play. Whether an organization wants to leverage applications or create a complete outsourced talent solution, Kenexa provides that capability,” says Averbook.
If you combine Kenexa’s data asset and IBM’s focus on big data, solutions and the combination of knowledge, transactions and the impact that people [have] on the business, IBM has created a leapfrog moment in the true talent management solution space that an application vendor alone cannot provide.”
There’s a need for the HR applications that suppliers such as Oracle, SAP and Cornerstone OnDemand provide, continues Averbook. “But what IBM and Kenexa have done with this acquisition is an attempt to leapfrog others in the industry to create something ‘different’ but possibly more relevant in what human capital management professionals are looking for today,” he says.
The combination of IBM and Kenexa creates a new type of play in the human capital management space that is a combination of transaction, big data and social that, if done correctly, could redefine the next generation of talent management.”
Today’s announcement is more evidence of increasing competition among the marquee names in the HR software market, adds Josh Bersin, CEO and president of Bersin & Associates, an Oakland, Calif.-based advisory services firm. “IBM, if they wanted to, could be the biggest or one of the biggest players in the talent management space, in terms of both software and services. Even though you have Oracle and SAP and Cornerstone out there, no one has the reach of IBM. They’re in a lot of countries where there aren’t many reps selling HR software.
“This market is still growing,” he continues. “The big players are trying to cement their positions in an increasing market. I think that’s what’s happening.”