Oracle said it will buy recruitment software maker Taleo for about $1.9 billion, as it expands its portfolio of cloud-based software.
According to Tim Jennings, chief analyst at Ovum, the move is “the latest in an aggressive and competitive wave of market consolidation in the cloud-based human capital management (HCM) space, which has seen SAP acquire Success Factors, and Salesforce.com acquire Rypple.”
These acquisitions indicate the increasing enterprise acceptance of the software-as-a-service (Saas) model, with HCM following in the footsteps of customer relationship management as the next SaaS battleground, says Jennings.
“It also emphasises the urgency that the major enterprise application vendors attach to establishing a strong position in cloud-based software. Both Oracle and SAP have existing on-premise HCM solutions, but both have been prepared to pay out large sums on cloud-based equivalents, rather than simply transitioning their existing solutions to the cloud.”
Jennings believes Taleo will advance Oracle's public cloud strategy, joining the recently closed acquisition of RightNow for customer service management, Oracle's Social Network for collaboration, and Oracle's own Fusion applications.