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Oracle Enters HCM Fray with Taleo Deal

Oracle on Thursday said it has agreed to acquire Taleo, a leading cloud-based provider of human capital management (HCM) apps, for $1.9 billion.

The move is hardly surprising. In December, two of Oracle's key rivals made similar moves; SAP announced its $3.5 billion deal to acquire SuccessFactors and Salesforce.com agreed to acquire Rypple.

Given the newfound cloud religion of its CEO Larry Ellison and its $1.5 billion deal, announced in October, to acquire online customer service provider RightNow Technologies, it was safe to presume Oracle would want a piece of the HCM pie.

"These acquisitions indicate the increasing enterprise acceptance of the Software-as-a-Service (SaaS) model, with HCM following in the footsteps of Customer Relationship Management (CRM) as the next SaaS battleground," said Ovum chief analyst Tim Jennings in a statement. "It also emphasizes the urgency that the major enterprise application vendors attach to establishing a strong position in cloud-based software. Both Oracle and SAP have existing on-premise HCM solutions, but both have been prepared to pay out large sums on cloud-based equivalents, rather than simply transitioning their existing solutions to the cloud. Taleo will further advance Oracle's public cloud strategy."

Workday, seen by many as the leading SaaS-based HCM service, was presumably out of reach, but clearly the leading apps vendors want in. "Human capital management has become a strategic initiative for organizations," said Thomas Kurian, Oracle's executive VP for Oracle development, in a statement. "Taleo's industry leading talent management cloud is an important addition to the Oracle Public Cloud."

Oracle said Taleo's Talent Management Cloud is aimed at letting organizations recruit, develop and retain employees and gain maximum performance out of them.

Posted by Jeffrey Schwartz on February 09, 2012 at 11:59 AM


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