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Stuart Lauchlan

Head of Editorial At Sift Media

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Analysis: Oracle unveils plans for its Taleo acquisition

cloudy-ball

 While last week it was SAP explaining plans for its SuccessFactors acquisition, this week, it was the turn of the application vendor’s arch-enemy Oracle to talk about its Taleo purchase.

Earlier this month, Oracle announced that it would buy Software-as-a-Service-based talent management and recruitment software provider, Taleo, for $1.9 billion. The acquisition is expected to complete around the middle of the year.
 
Taleo’s chief executive, Michael Gregoire, explains that the rationale behind the move from his point of view was to ensure that the vendor’s product portfolio could “expand and become more end-to-end”.
 
He claimed that the firm, which currently employs 1,400 staff, has to date racked up 5,000 customers, “manages 15% of all US hires” and operates “one of the world’s largest cloud deployments, managing over 16 billion transactions a year”.
 
Once the purchase goes through, however, Oracle’s aim is to integrate Taleo’s applications with its own Fusion human capital management software, although it will also continue to sell them as standalone modules.
 
Its recruitment and employee on-boarding software will become Oracle’s offerings of choice in the area, but the entire portfolio will also be made available under the banner of its owner’s ‘Public Cloud’ portfolio.
 
Thomas Kurian, Oracle’s executive vice president of product development, says: “We’re bringing the two solutions together on a Software-as-a-Service basis, delivered through the cloud. Oracle intends to integrate Taleo with the Oracle Public Cloud because it allows us to extend Taleo’s capabilities with social networking, identity management, business analytics and a number of other capabilities.”
 
But the company also took pains to emphasise that the purchase should be seen as a complementary addition to its current Fusion Apps roll out, the first tranche of which are HR-focused in a bid to respond to the increased levels of competition being offered by vendors such as Workday.
 
Oracle’s president Mark Hurd, insists: “Taleo is very strategic to Oracle. It’s highly complementary. It clips straight into our Fusion HR cloud, already our fastest-growing cloud application. There’s no change to our strategy or our Fusion roadmap and release schedule. Taleo is incremental to Fusion.”
 
Reserving judgement
 
And indeed, incorporating Taleo into the Fusion HCM product set will have an impact on only one area of the current line-up. The aim is to integrate Taleo’s performance management application with the Fusion HCM equivalent in order to create what Kurian claims will be “a single offering that has all the features [of both offerings] and will allow for a seamless upgrade for all customers”.
 
Other heavily promoted concepts around boosting the analytical capabilities of Oracle’s current HCM offering, meanwhile, are the notions of internal talent searching and the creation of an external talent directory.
 
“Imagine if you had the capabilities of a manager to look at your organisation chart, and browse the organisation chart…but find the people within the organisation chart using a talent browser. So you can quickly and effectively find the best talent for a position or need that you have,” Kurian explains.
 
A talent directory, on the other hand, he describes as a “portable talent profile that’s attached to every employee or candidate, that’s then integrated with recruiting and sourcing, so you can look outside of the company and look at all the pipelined candidates that are out there and where you’re considering sourcing from, to get a view of what the talent outside of the organisation is. This allows you to find, recruit, and retain the best people”.
 
A further goal, however, is to add predictive analytics capabilities to Taleo’s recruitment applications in order to “plan, predict, and optimally source your workforce”, Kurian says.
 
This system would enable HR professionals to “understand your workforce structure, your recruiting needs, and talent gaps” in order to ensure that “you’re going after the right, the best talent”, he adds.
 
Moreover, by integrating recruitment, performance management and talent review activity, HR professionals and other managers would be able to “define the critical roles they have and source the top talent they have for positions internally, so you don’t even need to go outside the organisation to find the best people”, Kurian attests.
 
So in the wake of both SAP and Oracle lifting the lid on what they plan to do with their new HCM playthings, what is the industry verdict and which vendor do analysts believe has the more credible roadmap?
 
Angela Eager, a research director at Techmarketview, says: “The speed with which both are announcing their plans for their SaaS HCM acquisitions (which may well be different to their speed of movement), is a sign of how desperate they are not to lose out to each other, and to the likes of SaaS-only providers Workday and Salesforce.com. This is particularly important now that HCM has become the lead area for SaaS.”
 
While at this stage, “it looks like Oracle has a more coherent integration strategy than SAP”, timelines and an ability to execute are what really matters, she adds. As a result, any and all “judgment should be reserved (for both vendors) until we see some concrete developments,” Eager concludes.
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Stuart Lauchlan

Head of Editorial At Sift Media

Read more from Stuart Lauchlan
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