Home / / Oracle buys HCM specialist Taleo for $1.9bn

Oracle buys HCM specialist Taleo for $1.9bn

Acquisition of cloud human resource solution company to boost Oracle portfolio

Oracle buys HCM specialist Taleo for $1.9bn
The deal to acquire Taleo gives Oracle HCM expertise to match recent acquisitions by rivals SAP and Salesforce.com.

Oracle has agreed to buy cloud-based talent management company Taleo for $1.9 billion.

Taleo provides a cloud-based human capital management solution (HCM), which allows companies to attract, develop, motivate and retain human capital to improve performance and drive growth.

The Taleo solution helps both employers and employees to manage recruitment, performance management, learning and development, and compensation management.

Oracle intends to integrate the Taleo solution into its existing human resources solutions, to provide a comprehensive cloud-based solution for HCM.

Thomas Kurian, executive vice president, Oracle Development commented: "Human capital management has become a strategic initiative for organizations. Taleo's industry leading talent management cloud is an important addition to the Oracle Public Cloud."

The deal, which values the company at $46 per share, has board approval, and subject to usual shareholder and regulatory approvals is expected to close by mid-year.

Tim Jennings, chief analyst at Ovum said that the buy is indicative of competition in the HCM market, and also shows growing acceptance of cloud-based solutions among enterprises.

"Oracle's announcement of intent to acquire Taleo 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," Jennings said.

"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 (CRM) as the next SaaS battleground. It also emphasizes 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.

"Taleo will further 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."

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