By Anne Widjaja
IBM has announced the acquisition of human capital technology specialist Kenexa for $1.3 billion. The move is likely to increase competition with SAP and Oracle, following their respective acquisitions of HCM vendors SuccessFactors and Taleo.
Kenexa specialises in recruitment solutions that integrate cloud-based technology and social business solutions. IBM is looking to leverage Kenexa’s expertise in social media and front-office process solutions, to bolster its social business capabilities.
Kenexa supports more than 8900 customers across a variety of industries, which includes more than half of the Fortune 500.
“The customer is the big winner in all this because the combination of our two organisations will deliver more business outcomes than ever before,” said Rudy Karsan, chief executive officer, Kenexa, on the impending acquisition.
“Together, Kenexa and IBM will be unmatched in the industry, offering solutions that extend from strategy to the technology platform to the delivery of services for clients.”
Nucleus research analyst, Rebecca Wettemann, told itnews.com.au that the Kenexa acquisition marks a “big step” and makes it clear that IBM is serious about taking on Oracle, SAP and Salesforce.com in the business applications market.
“This brings the arms race up a notch,” Wettemann said.
SAP closed the acquisition of human capital experts SuccessFactors in February this year, which was closely followed by Oracle’s acquisition of competitor Taleo. With the entrance of IBM-Kenexa into the web-based human resource technology market, competition is likely to heat up between the three IT giants.
Nomura analysts told itnews.com.au that IBM’s decision to acquire Kenexa may be a strike back to Oracle and SAP encroaching on IBM’s markets. “Oracle’s move into hardware and SAP’s move into the database market position these leading apps companies more in IBM’s traditional markets.”
“IBM has perhaps fewer reservations about participating in the apps and software-as-a-service market.”
IBM expects the transaction to close in the fourth quarter of 2012, subject to Kenexa shareholder and regulator approval.
