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Micah Fairchild The Acquisition Age-Part 2: More HR Software Market M&A

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 By Micah Fairchild

Interpreting Recent Events in the HR Software Market

Let's face it, growth for a great deal of companies means either being acquired or acquiring some other company. Few places is this more apparent than in the HR software space, where few companies still exist that haven't been cobbled together through some type of merger and/or acquisition. As we introduced in our previous article "The HR Acquisition Age…", 2010 and 2011 have been particularly active years in the eat-or-be-eaten world of HR software. The wave of M&A activity that has occurred during this period has proven to be challenging for customers and software companies alike to navigate—and has forever changed the vendor landscape for human resources applications.

While our initial list of the top 3 acquisition stories still remains true, plenty of other companies made headlines during this time with their own M&A saga. Here is HRLab's selection of three more top stories of acquisitions--replete with implications for the HR software market as a whole, as well as implications for you the customer.

Headline # 4: SumTotal Proves HR Software is the Sum of Its Parts

On a mission to build (either through acquisitions or organically) a hire-to-retire solution, SumTotal (actually owned by Vista Equity Partners) has become one of the largest providers of talent management software solutions and hands down the largest LMS (Learning Management System) provider on the market. Leveraging a tried and true integration strategy, SumTotal unlike many of its large competitors has been overwhelmingly successful in making acquisitions a strategic part of the company growth (this includes Click2Learn, Pathlore, GeoLearning, Mindsolve, and Softscape). Now it seems SumTotal has gobbled up two more companies (Accero and CyberShift) making the overall company HR software portfolio broad enough to cover nearly every substantive aspect of HCM (Human Capital Management).

  • Accero—With 200+ customers, Accero's acquisition represents the holy grail of end-to-end solution deployment—a respected, global, and complex payroll provider.
  • Cybershift—With 700+ customers, Cybershift is a mid-sized provider of the secondary "core" elements of time/attendance software, expense management technology, and contingent workforce management solutions.

Some customers are referring to these latest acquisitions of SumTotal as the "Sears approach", indicating that the company is trying (but not succeeding) to be all things to all people. Others lament the way prior SumTotal acquisitions have negatively progressed (e.g. Pathlore, Mindsolve), citing that customers might want to remain "bearish over the monster this creates". Still, these latest acquisitions do in fact allow SumTotal to unequivocally tout an "end-to-end human capital management platform", which in this day-and-age can be a strong competitive advantage.

Headline # 5: Taleo Goes Holistic in its HR Software Offering

Offering solutions wholly through the HRMS Software-as-a-Service (SaaS) model, Taleo is HR software geared towards delivering the "whole enchilada". Boasting incredibly-designed and configurable solutions, as well as higher-than-industry average customer ratings, Taleo has apparently also been out on the market looking for recruiting solutions (a la Cytiva) and further learning capabilities (a la

  • Cytiva—A provider of on-demand talent acquisition software, the Canada-based Cytiva is a solid leader in the mid-market, and delivers solutions to 250+ organizations. In addition, the user experience (UX) for both candidates and hiring managers has garnered global attention with even Bersin & Associates' ringing endorsement.
  •—A privately-held, next-gen software solution company that focuses on learning (surprise, surprise) delivered via SaaS. started roughly 13 years ago as a provider of only learning content. Today, the company enables customers to fully customize virtually any learning portal, manage content, manage workflows, and develop content at extremely low prices. However,'s focus has not been on the global landscape, and as such could be a serious problem down the road—especially for those organizations needing specific compliance capabilities geared toward international markets.

Headline # 6: Lumesse Gets a Handle On Its HR Software Strategy

Now known globally as a leader in providing integrated talent management solutions, Lumesse hasn't always had a bright road ahead of it—especially given how mired down it was with being acquired itself not once but twice in one year! The tables turned though when, after successfully making it through the 2010 untangling from Axel Springer (and while the company was still StepStone), focus was put on how to best deliver on the core HR software operations of the business. The strategy? First, lock up a significant market contributor in SaaS-centric talent acquisition firm MrTed, and then (after changing names to Lumesse), add onto the roster a world-class Learning Management System (LMS) from Edvantage.

  • MrTed—Apart from the interesting name, MrTed has also enjoyed a rather unique position of being a multi-tenant SaaS solution (built from the ground up as such) that suffered from lack of scalability resources while at the same time having incredible brand recognition. Though more talent acquisition than talent management, the Partnership with Lumesse seems to be made in heaven—one side has the fame and the other side has the fortune.
  • Edvantage Group—With 500K+ users spread out over hundreds of companies worldwide, Edvantage is a force to be reckoned with when it comes to the Learning Management System market. Leveraging world-class SaaS capabilities in content development, authoring, and management, as well as a host of additional social and mobile learning tools, Edvantage adds significant power to Lumesse's learning software solution.

These acquisitions give some serious firepower to Lumesse in not only its home turf of Europe, but also in the emerging markets of China and India. Further with the increased recognition, and an already stellar integrated talent management strategy, the U.S. could soon be falling prey en masse to the growing company.

What's Next in this Age of HR Software Acquisitions?

The acquisitions of Lumesse, Taleo, and SumTotal all highlight the fact that HR software vendors are increasingly turning to strategic market purchases to stem the tide of competition. Customers are discovering that the old ways of having to cobble together HR software solutions are coming to an end. Viable, affordable, end-to-end human resource solutions are available without having to sacrifice an unhealthy amount of functionality. As such, customer churn is increasing and vendors know it. Before all is said and done, the landscape will likely change even more than what we've already seen. At at the rate that some of the up-starts are going, who knows, we might even see giants such as Oracle get acquired. Well…maybe not. End

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Apart from the interesting name, MrTed has also enjoyed a rather unique position of being a multi-tenant SaaS HR solution (built from the ground up as such) that suffered from lack of scalability resources while at the same time having incredible brand recognition."


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