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Micah Fairchild HR Technologies Continue M&A Activity

3.5 stars Average rating: 3.5 (from 60 votes)
 By Micah Fairchild

HR Software Vendors Remain on Acquisitions Tear

It’s no secret that a host of businesses have recently been coming around to the idea that the right HR technologies can be a major point in their favor when striving for competitive differentiation. After all, with a host of new industry applications focused on ramping up employee productivity, driving efficiencies, and providing greater workforce insight than ever before, organizations around the globe have finally been able to capture that elusive “seat at the table”. Perhaps then, it’s also no surprise that software and service providers within the HR technology space are all leveraging every ounce of their considerable resources to stay viable themselves; whether that means adding new functionalities, innovating around disruptive technologies, or buying up smaller competitors to ease the burden of carving our market share.

While each of those strategies we just referenced has undoubtedly proved useful to the bevy of HR software vendors in today’s landscape, few have received as much press as the last point on acquisitions. Indeed, the past few years have yielded more high-profile M&A activity in the HR technology space than ever before—in large part driven by the unstoppable momentum of the cloud; the growing technical expertise of HR practitioners; and the need for vendors to shore up deficiencies in their offerings.

Over the past several months we’ve seen Oracle acquire Taleo, SAP bring SuccessFactors into the fold, and IBM take on Kenexa. Still, these three industry giants aren’t the only ones 'buying' into this strategy. After all, Salesforce.com jumped in with their buyout of Rypple; the Corporate Executive Board purchased SHL; and even Microsoft got into the game with their acquisition of Yammer. Yet countless other smaller acquisitions are occurring at a blistering pace too—from iCIMS purchasing JobMagic to CareerBuilder acquiring EMSI. In much that same vein, market consolidation most recently continued with Bullhorn buying up Maxhire Solutions and Sendouts, and Jive Software acquiring Producteev and MeetingsIO. And although certainly smaller than the billion dollar purchases made by the big players this past year, these purchases are undeniably important. Let’s take a look at each of these a bit further.

HR Software Vendor Acquisition #1: Bullhorn Buys Maxhire Solutions and Sendouts

Following up its own buyout this past June by Vista Equity Partners (the firm also responsible for SumTotal), this month Bullhorn added to its fold the SaaS recruiting solutions of both MaxHire and Sendouts. And while it’s tempting to assume that this is more of a “buy” disguised as a “build”, the truth is that these two acquisitions bring some significant firepower to what is already a recruitment force to be reckoned with in Bullhorn. For those unfamiliar with Bullhorn’s efforts to date, the company has its hands in a lot of talent acquisition pies; with services that include the rapidly emerging fields of both mobile and social recruiting and the recruitment management for companies like Randstad, Kelly Staffing, Forest Solutions, and HireMinds.

So what did Bullhorn net exactly with these two purchases? Well, first off data mining is certainly a benefit given the database access Bullhorn now has to Data.com, Broadlook, and Hoover’s Inc. Obviously that integrated prospect data is huge now given the industry’s push towards strategic recruitment, but Bullhorn is also getting impressive capabilities for vendor management as well as client portals. Plus, the combined customer base has grown to about 5K staffing and recruiting firms serving roughly 50K users in well over 125 countries. More importantly than that though, Bullhorn is getting access to a wealth of technology innovation from these two SaaS HR companies. Namely, with Sendouts’ Brian Hopcraft (CEO) coming aboard as GM and Maxhire’s Peter Blitz (CEO) joining as Bullhorn’s new Product Innovation Officer, the parent company will effectively be able to tap into some of the best cloud recruiting minds in the industry—allowing as Blitz puts it, the capability to “speed our ability to deliver the next cross-platform, cross-browser, and mobile-friendly product update”.

These acquisitions are an integral part of Bullhorn’s larger strategy moving forward, with release plans according to company representatives that involve a “multi-platform, smartphone enabled, multi-browser, tablet-friendly, PC friendly upgrade” just down the pike. Right now, that means both MaxHire and Sendouts will remain separate, individual companies with existing customers able to still utilize each and receive support. However, with Bullhorn’s larger plans just over the horizon, it’s relatively clear that the future for both MaxHire and Sendouts is to be integrated into the Bullhorn fold and support will in all likelihood be halted. And honestly, that’s a good thing. After all, Sendouts is front-end system that duplicates a number of capabilities Bullhorn already has. Granted it does have faceted search functionalities with criteria matching, but not a whole lot else. Maxhire is a bit different; with an impressive set of tools that can be leveraged in the temporary labor arena as well as a highly-sophisticated sourcing feature set; but once these tools are rolled up with what Bullhorn is already doing, very few organizations in this market are likely to be leveraging what amounts to separate, limited functionality by comparison.

HR Software Vendor Acquisition #2: Jive Buys Producteev and Meetings.io

After shopping around for some time for the right solution, the enterprise social networking provider Jive Software finally settled on the strategy of buying up the startups of Meetings.io and Producteev this month—paying close to $8M altogether and issuing 460K shares for both. What current and prospective Jive customers should know about Meetings.io is that, while small, they’ve been one of the leading innovators in the field of Web RTC (Real-Time Communication)—built off the rapidly evolving HTML5 framework. It’s an application that focuses on allowing video/audio conversations and data transfers to happen across browsers with anyone in the world at any time; and stands in direct competition with the big boys of conferencing services like WebEx and GoToMeeting.

Producteev on the other hand is software designed to get project teams organized. In much the same vein that we’ve been seeing vendors like Ceridian expand task management capabilities with their latest Dayforce offering, Jive’s purchase of Producteev seriously beefs up the company’s basic functionalities by bringing tasks that would normally be worked on via email into the social sphere. Granted, Jive’s not the only one with these capabilities. After all, it’s clear that a large part of Jive’s strategy has already been pioneered by the likes of Citrix and Cisco; and IBM, Microsoft, and Salesforce.com are already in the game as well. So what makes these acquisitions stand out? Namely, it keeps Jive relevant in the changing world of social task management and communications—especially against newer competitors such as Salesforce.com.

We expect the first stages of integration between these products to come out with Jive’s first 2013 release, but it’s rather unclear how much effort will need to be exerted to get all three companies on the same page. What is clear is that perhaps more than any other substantive area in the technology landscape, social applications are evolving to the point of being front-and-center for business strategies. Gone are the days where social was simply about sharing and status updates. Now, we’ve entered into an era where social is strategically driving business value, and Jive has set itself on the right path by shoring up the gaps it had against its competition—especially considering the productivity gains that are now available thanks to the fact that a platform for collaboration, chat client, and web conferencing tool have all been combined. Now, the next question is how the social software provider can pull away.

HR Technology Consolidation – Some Final Thoughts

Clearly the pace of at which acquisitions happen within the HR, payroll, and related technology landscapes has no signs of abating anytime soon. And while in the short-run this market turmoil has many of us wondering what will happen next, the fact of the matter is that this M&A activity that’s occurring all around us is ultimately good for the end-user. Why? Because as an industry, we’re getting closer to single solutions that can be deployed to meet a host of business needs. In the case of Jive’s latest venture, the company is combining a number of capabilities that organizations previously had to seek out from multiple vendors. And that same sentiment applies to what Bullhorn is contemplating as well. Granted, not all of the acquisitions we have witnessed (or likely will continue to see) will be about the customer. Some will simply be about buying up the competition. But even that has a silver lining in it…after all that means you’ve just got less decisions to make, right? End

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Market consolidation continued this month with Bullhorn buying up Maxhire Solutions and Sendouts, and Jive Software acquiring Producteev and Meetings.io. And although certainly smaller than the billion dollar purchases made by the big players this past year, these purchases are undeniably important.

 

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