Tech Titan SAP buys SuccessFactors for $3.4 Billion

Announced on a Saturday, this deal signifies that the Tech Titans may be loosening their purse strings to make acquisitions that help them with long term growth (see a related Aragon Research First Cut on SuccessFactors). For SAP, this signifies that a growth via acquisition strategy may be a long term play for them. Note that for others, such as the IBM Software Group, this strategy has worked successfully for years.

Aragon Research will be doing a full First Cut with analysis of this announcement, which was announced today, December 3rd, 2011. It is clear now that there is a trend that has Talent and HCM Suites appear to be coming together (see Aragon Research First Cuts: Talent and HCM Part I and Part II).

One thing that we will be looking at long term is how well does Enterprise Learning fit inside a Talent Suite. In Enterprise Content Management (ECM) for example, Web Content Management never really got absorbed as part of that Suite (note, Aragon Research covers Learning as part of its Knowledge topic).

In the short term, this will put some pressure on remaining providers of Talent Management Software (Cornerstone OnDemand, Saba Software, Silkroad, Sumtotal Systems, Taleo, Ultimate Software, Workday) on what they do:

1. Remain standalone;
2. Combine forces with another Talent or HCM provider;
3. Get bought by a bigger tech titan (ADP, IBM Oracle, SAP).

Regardless, this may signify that with the better unemployment numbers that just got issued in the US, that it is a good time for large enterprises to loosen their purse strings and make some acquisitions.

Stay tuned for our Aragon Research First Cut early next week.

The War for PeopleSoft is over: Someone forgot to tell Workday

In the year before PeopleSoft was bought by Oracle in a hostile takeover in 2005, there was a huge amount of drama in the marketplace (about whether the deal would go through due to anti-trust laws) and even Gartner was in the mix.

Oracle did succeed in buying PeopleSoft and most of the Senior Executives at PeopleSoft ended up leaving the company. Today, PeopleSoft is a successful part of Oracle and at Oracle OpenWorld last month, CEO Larry Ellison did a nice job of telling the Fusion story (the integration of a number of legacy products into a common platform). Oracle Fusion looks good and because of that and Oracle execution in general, Customers feel a lot better about Oracle than they did back in the day. The battle for PeopleSoft is over, Oracle won.

However, when you hear from an upstart called Workday, which features former PeopleSoft executives Dave Duffield and Aneel Bhusri, it sounds like the battle is not over. Workday is doing some great marketing (particularly with press and analyst influence), but as always with marketing and spin, you have to separate the facts from the fiction.

Today, Workday is still a pre-IPO start-up. Oracle is a Titan. Besides PeopleSoft, over the last few years Oracle has gobbled up Siebel Systems and most recently Sun Microsystems (this week they announced a $1.5 Billion deal to buy RightNow).

It used to be easy to bash Oracle, but times have changed and Oracle is bringing its A game. They make a compelling argument to the Enterprise CFO to consolidate and go with an all Oracle Suite. On top of that, Oracle also is launching their own Public Cloud.

Ripping out core HR is easier said than done, particularly when Oracle now has  Oracle Social Network, a full Social platform that integrates with its HR Suite. So, let the war of words continue and we'll see how both providers fare in the land of execution.