Following on from last week’s SAP acquisition of SuccessFactors, customer management specialist Salesforce.com has also gone Christmas shopping, and with what looks like a similar idea in mind.
Its target is Toronto-based Rypple, which like SuccessFactors is a player in the HCM sector. Unlike SuccessFactors, however, Rypple is a 2008 start up business with just 45 staff. The move is not being seen as reaction purchase by Salesforce, however. The company was an investor, along with other cloud-oriented companies Facebook and Spotify, in Rypple’s recent $13 million round of development funding.
"Salesforce.com and Rypple share a vision for extending the social enterprise to transform the way we work," Salesforce.com CEO Marc Benioff said in a statement. "The next generation of HCM is not just about a Cloud delivery model, it’s about a fundamentally better way to recruit, manage and empower employees in a social world."
Rypple counts Facebook as one of its customers. “We chose Rypple to be the core of Facebook’s employee performance management platform because it’s designed from the ground up to be social,” Tim Campos, Facebook CIO.
The move can, however, be seen as a clear sign that major software and services businesses are now looking to extent their range of complementary offerings in order to provide more comprehensive services. Human resources is seen by some commentators as an important opportunity as employee management trends change to accommodate new ways of working, such as the incorporation of social media tools and techniques.
It now has to be expected that the New Year will see more acquisitions of this type.
Rypple’s target market is an important corner of the Human Resource Management mix – building tools that provide workers with online coaching coupled with on-going feedback about their performance. Working with investor, Spotify, it has recently added the capability to work with the Objectives and Key Results (OKR) management methodology, which it is expected to incorporate into future products.
Such capabilities should fit well with Salesforce’s core market of Customer Relationship Management, where is should help businesses motivate, manage and coach sales teams, both as a team and as individuals.
Angela Eager of research firm TechMarketView commented: "[Salesforce.com] is planning a heavy move into HCM and is looking to expand into talent recruitment, team building and applications to empower employees, which we believe will come via acquisition. Throughout its history Salesforce.com always said it was not interested in the back office. It has shifted stance over the last few years (e.g. the joint venture investment in FinancialForce, this year’s ERP components agreement with Infor) and got involved indirectly. Now it is all up front and direct.
"So what prompted the move? A slowing of growth probably drove it to look for new business areas but I suspect increased SaaS competition from SAP and Oracle who are building and buying their way into its space was the final kicker. We are looking at interesting times – in many ways Salesforce.com has had the SaaS business applications market to itself, but that has all changed and the ‘incomers’ have more resources than Salesforce.com."
