HR Technology Column

Two Tech Vendors Sold in One Day?!

The selling of Lawson and Plateau within a 24-hour period represents just one data point rather than the first sparks of a fire sale. But a closer look at these transactions provides end-users with some important insights into the strains and pressures shaping the HR technology world. It's also worth noting that SuccessFactors may have gotten a gem!

Monday, May 2, 2011
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Whenever a popular and widely used vendor gets acquired, there are tears on some cheeks (not just from those losing their jobs but often from those using the software) and sometimes blood in the streets. That was certainly the case when Oracle succeeded in its hostile takeover of PeopleSoft seven years ago.

But PeopleSoft is a very special case. I mean, it made HR sexy! Have you noticed how many people still use the name, as though the company were still in business? Some force themselves to say or write "Oracle/PeopleSoft," but often it's just "PeopleSoft." Such is the power of success, customer loyalty and brand.

Neither of the important two companies acquired on April 26 -- Lawson by Infor and Plateau by SuccessFactors -- have quite that kind of power, and the announcements coming on the same day are just a coincidence, not an indication of a heightened pace in mergers and acquisitions.

So let's take a closer look at what each means for the HR technology industry and maybe for you, no matter what software you use.

Some of what follows I learned from reading great discussions on the HR Technology® Conference group on LinkedIn, so I credit the participants for any thoughts I might have lifted. If you're interested in what follows, you should join immediately. Or use the link at the bottom.

Lawson first. Lawson was always considered a minor leaguer in the ERP world because it served SMB (small-to-medium businesses), ran only on IBM's minicomputers (variously System 36, System 38, AS400 and now the iSeries) and because it didn't have manufacturing software.

But then four years ago, Lawson acquired Swedish ERP Intentia and with it, manufacturing software. And the head of HR products, Larry Dunivan, started delivering an organically grown talent management suite integrated to core HR. Suddenly, Lawson didn't look so small anymore, as I wrote at the time.

As a result, Lisa Rowan of IDC put Lawson in her Marketscape "Leaders" sector for years. And you may have seen Larry taking part in several HR Technology® Conference Shootouts, where he competed with all the major leaguers.

But he never quite reached his dream of HR people reflexively saying, "PeopleSoft, Oracle, SAP and Lawson."

I wrote about Infor four years ago. At that time, the company was a classic software aggregator: buying vendors long past their technology prime and not building any next-generation system out of them, as Oracle did creating Fusion.

Instead, the focus was on keeping customers using the installed software and continuing to pay maintenance: that often-derided practice of customers forking over about 20 percent of the original perpetual license price every year for bug fixes, patches, updates and eventually new releases.

There's quite a lot of cash to be gathered from maintenance. Not usually enough for both a profit and real product innovation. Just enough to keep the gears turning.

If you read the column, Infor at that time promised some minimal product enhancements, mostly to the more modern HCM products in its stable, including Boniva and Workbrain, the once-hot workforce management software. I don't recall seeing any of them announced since then but perhaps they were.

At the time of the offer for Lawson, Naomi Lee Bloom's blogpost was the first, and may have been the last, word on the deal, on why it's not good news for Lawson or its customers, though I don't agree with all her reasons for why it happened.

If you go there (please come back!), be sure to read the comment from the anonymous Infor employee claiming we've got the company all wrong.

At the acquisition announcement, new CEO, Charles Phillips, formerly No. 2 at Oracle, made two pages of promises to Lawson customers.

I posted the full text on the LinkedIn group, but in summary, it promises "product investment, innovation and customer success."

This could be true, since Lawson is the first modern multi-function product Infor has acquired and could certainly be at the heart of a new ERP offering. Only time will tell whether this is the acquisition that changes Infor's direction. That's dearly to be wished.

On to Plateau, a totally different story: One market leader buying another.

Awhile back, SuccessFactors acquired Jambok, the informal mobile video learning company. Many said at the time it still needed a traditional learning management system similar to, Taleo's acquisition -- with courses, schedules, grades and updates to employee records. It's necessary for certifications, if nothing else.

After looking at every option out there, SuccessFactors bought Plateau, which has a great LMS, and much else besides. Except for recruiting, Plateau has all of the pillars of the talent management suite, and both companies were in the leader's section of the recent Gartner Magic Quadrant for Performance, Succession and Comp.

Let's skip over the challenges SuccessFactors faces with Plateau's old base of installed LMS users, plus dealing with the customers and code of their overlapping SaaS applications. Not to mention Plateau having a better compensation product from its own Nuvosoft acquisition.

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Let them worry about all that. Instead, let's focus on the unique opportunity The Plateau Foundation, a brand new technical platform, offers SuccessFactors.

Everybody knows about the iPhone and the App Store, where for a few bucks (or for free) you can download an app that instantly works on your phone. No integration necessary. That's because the app has been written for the iPhone technical platform: meeting all its specs, using its utilities and following all its rules. has something similar called, where its customers can buy applications just as simply, though certainly for more money, but they also work right away. The idea has become important enough to have been given a name: Platform-as-a-Service (PaaS, like SaaS).

HR didn't have one until Plateau created one, and it was just getting going.

Taleo and Workday both have websites for customers to acquire other apps and maybe a pre-written integration for them or great tools to write one, but integration is still required, so they ain't PaaS.

Now, as Jason Corsello of Knowledge Infusion says, "SuccessFactors has the potential to become a true platform company, allowing them to build a highly scalable partner ecosystem not yet seen in the HCM world."

Of course, that only becomes truly valuable when SuccessFactors completes its toughest project to date: making EmployeeCentral robust enough to serve as the core HR system for a large company.

The company's first attempt was with development partner EMC, the giant digital-storage company with 46,000 employees. Despite a public promise by EMC's Ed Golitko a year ago to unplug his PeopleSoft 7.5 system and use EmployeeCentral right about now, that apparently will not be happening.

No surprise. The added functionality EmployeeCentral needed to go from an SMB application to one meeting the needs of a large enterprise was a huge effort to finish in just one year.

When it does happen with another development partner, as I'm certain it eventually will, the plates will indeed shift.

HR Technology Columnist Bill Kutik is co-chairman of the 14th Annual HR Technology® Conference & Exposition, October 3-5, 2011 in Las Vegas. The full agenda is scheduled to go online Monday, May 9. You can comment on this column at the Conference LinkedIn Group , which does not require prior or future conference attendance to join. He is also host of The Bill Kutik Radio Show®. He can be reached at .  

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