Oracle outlines Taleo roadmap, calls acquisition 'additive'

Despite some product overlap, Oracle maintains its acquisition of Taleo is complementary and will not have an impact on its Fusion roadmap. One analyst is not convinced.

Oracle executives Friday outlined their plans for an integrated human capital management (HCM) and talent management software portfolio in the wake of the company’s acquisition of Taleo.

In a half-hour webcast, senior executives presented a broad outline of how the two product roadmaps would converge.

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“This gives us the most comprehensive and modern cloud human capital management and talent management suite in the marketplace,” Mark Hurd, Oracle’s president, said on the webcast. “There is no change to our strategy or the Fusion roadmap and release schedule. Taleo is incremental to Fusion.”

Oracle announced it would acquire Taleo for $1.9 billion earlier this month. Taleo’s core strength is in recruitment and talent management software. In fact, according to Taleo’s CEO Mike Gregoire, Taleo manages 15% of all hires in the U.S. But there is some product overlap between the two companies, which Oracle executives sought to address.

“Oracle and Taleo’s products are complementary, and between Fusion HCM and Taleo Talent Management we offer a full suite, delivered in Software as a Service,” said Thomas Kurian, Oracle’s executive vice president for development. “This can be purchased and used as individual modules.”

Those explanations did not pass muster with one industry observer.

“Between Hurd and Kurian saying ‘it’s completely additive and complementary,’ it was off a script; there was such boasting going on,” said Mark Smith, CEO and chief research officer of Ventana Research, based in San Ramon, Calif. “Oracle’s already got compensation management, performance management and recruiting, and these things are available in the cloud. I don’t understand how they can possibly make those comments on this webcast.”

Oracle promised to continue to offer talent management that works with Oracle human resources and non-Oracle human resources and human capital management, whether on-premises or in the cloud, Kurian said. In addition to its recently released Fusion HCM, Oracle also offers PeopleSoft HR software.

Ultimately, Oracle intends to integrate Taleo with its own Oracle Public Cloud.

“It allows us to extend Taleo to our social networking, Identity Management and business analytics,” Kurian said.

Indeed, Oracle’s acquisition of Taleo has been characterized by Smith and other analysts as a grab for customers, to help build out its customer base on the Oracle Public Cloud.

Oracle also outlined its plans to complement its HCM offerings with its broader portfolio of applications and analytics.

“What Oracle wants to do is offer you a complete solution,” Kurian said. “Complete talent management, HCM to promote and reward [employees] -- with embedded BI, and social and mobile capabilities to allow people to make the right decisions quickly and effectively.”

What’s the takeaway for customers?

“If you’re an Oracle customer and already bought into Fusion HCM, the question is yeah, Taleo’s recruiting is probably a better path,” Smith said. However, most of the capabilities within Taleo beyond recruiting were themselves acquired functionality.

“For Oracle customers, OK, there’s a couple things to pick off,” Smith added. “If you’re a Taleo customer beyond recruiting and you were thinking of Taleo as your unified talent management suite I would be thinking again. I would be very concerned.”

Oracle’s acquisition of Taleo is just one in a recent rash of acquisitions by enterprise software vendors of smaller, HR technology specialists. SAP bid $3.4 billion for SuccessFactors in December, followed just weeks later by Salesforce.com’s acquisition of Rypple.

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