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Latest on SuccessFactors, Taleo Acquisitions

Amazingly, SAP and SuccessFactors have stuck by every promise they made three months ago, putting all pundits and cynics to shame -- including me. Oracle and Taleo, meanwhile, have released some pretty specific details of an early product roadmap, with existing Taleo customers seemingly buoyed by what they have heard.

Monday, March 5, 2012
Write To The Editor Reprints

If you write news-analysis columns once a month (as I do), it's sometimes humbling to go back to reread old ones.

In preparation for this update, I reread my SAP & SuccessFactors column from Dec. 12. It was skeptical, disbelieving and cynical. Everything a column about a major acquisition in the software business should be.

Only this time, to my horror, three months later, everything that I quoted SAP Co-CEO Bill McDermott and SuccessFactors CEO Lars Dalgaard saying in response to my questions has turned out to be true! How embarrassing is that?

How did the two know so long before the deal closed or even before consulting with their own executives who will actually make sure the work gets done? Or in HR terms, if they had already decided, how did they get everybody in their companies aligned to their goals so fast?

So if you want to know the latest, reread their answers, and ignore my skepticism. Now, we're reduced to watching carefully to see if they screw up on execution, especially with building out Employee Central with those SAP developers and product managers. Plus whether Lars ever does get a seat on SAP's powerful executive board, which has been promised for three months.

As for Oracle acquiring Taleo, that occasioned the longest discussion in the two-year history of the HR Technology® Conference group on LinkedIn, should you want to join and scan it. (After joining, scroll down to "The Other Shoe Drops.")

I deliberately say "scan" because reading an astounding 323 comments to the original discussion and links to an untold number of blogs may be out of the question.

The discussion evolved into the most fundamental questions facing HR software, leading some members to call it "a graduate seminar" or "master's degree" in HR technology. Some tough technical sledding, but worth reading.

Then, there are another 120 comments to a second discussion -- which followed a public webinar by some of the most senior executives from both Oracle (President Mark Hurd and EVP Thomas Kurian) and Taleo (CEO Mike Gregoire). It revealed more about their product roadmap than some pundits wrote. That's what I want to tell you about.

But first, take note that senior executives at Oracle have never spoken publicly about HCM in at least my 22 years, except for CEO Larry Ellison in his Oracle Open World keynote in 2010, calling Fusion HCM Talent Management his "SuccessFactors and Workday killer."

SAP, on the other hand, was always famous for a pendulum interest in HCM. Two years hot to trot; then two not so eager. I think it's safe to say that our major ERP vendors have in their entire histories never cared as much about HCM as they do today.

Whether they're just reacting to the competitive threat from Workday, trying to catch up on talent-management functionality or buying a late boost into the Cloud -- it doesn't really matter. This is good news for everybody in HR.

So what did the Oracle/Taleo webinar tell us about their joint product roadmap?

Despite being as carefully scripted as a broadcast television show, Hurd left a serious misimpression in his opening remarks by only mentioning Taleo recruiting (Enterprise Edition) as "clicking" into Oracle HCM Fusion. Made me think, "Oh, they're trashing the rest, despite Fusion needing Learning." 
 
Kurian, the company's top hardware and software executive, cleared that up with a slide that I pored over like the Rosetta Stone trying to divine their plan -- at least today's plan. Remember Oracle first saying after acquiring PeopleSoft that it would pull the plug? Plans often change after acquisitions.

The slide showed six bars of "Talent Management Offering in the Cloud." Read that as Oracle Fusion. The first two were green for Taleo with "Recruiting and On-boarding" on one and "Learning and Development" on the other. Perfect sense, Fusion HCM still needs both.

The bottom three were red for Oracle: "Engagement and Retention, Compensation and Rewards, and Talent Review." Not sure what the first one means exactly, since it doesn't correspond to the names of any particular Fusion apps, but we'll see. The other two do.

The third bar in the middle was half of each color and labeled "Performance Management," and Kurian said Oracle will combine the Performance Management modules from both companies, delivering "all features, seamless upgrade for all customers."

Well, it was a marketing webinar after all. Others have pointed out the enormous difficulties of combining those two very different modules.

Kurian went on to beggar belief by talking about "unifying" the two suites into a single offering. Sounds like a mini-Fusion project to me. How long would that one take? 
 
But two takeaways are clear.

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First, Taleo's Compensation product unfortunately seems to be toast. Doesn't have many users right now, and nothing was said about using it in Fusion HCM or supporting Taleo's current customers.

The other certain thing was repeated three times. Oracle is going to continue to support the SMB's using Taleo Business Edition, who together represent more than 4,300 of the 5,000 Taleo customers that have been bragged about.

This will be a major departure for Oracle, supporting customers that small. Plus it adds more new code lines. Remember TBE originally came from Taleo's acquisition of recruitforce.com, and it added versions of its organically grown performance and purchased comp. But Oracle seems adept at supporting dozens of code lines.

A random selection of Taleo users who posted to the LinkedIn group or I e-mailed seemed buoyed after the webcast. Since 85 percent of them use recruiting, they came away feeling Oracle had made a firm commitment to continue their two products: Taleo Enterprise Edition and TBE.

The remaining question for me is, Do these indicated Taleo apps get plugged into Fusion first thing or do they continue to be sold separately as a Taleo talent-management suite (apparently to users of whichever HRMS) until that new fusion (note the lower case) gets done? Can't say.

But Taleo Enterprise Edition customers did get their new Version 12A right on schedule in February. And the two companies are obviously working together before the deal closes, as evidenced by the webinar.

Me, I'm still hoping against hope that Oracle will allow one more Taleo WORLD, just about the best vendor user conference around. SAP is doing that for SuccessConnect. We'll see.

HR Technology Columnist Bill Kutik is co-chairman of the 15th Annual HR Technology┬« Conference & Exposition, returning to Chicago for one year, Oct. 8-11, 2012. Astounding speaking proposals might still be considered when submitted through the website. 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 bkutik@earthlink.net.  

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