On September 22 I called your attention to what seemed like an obvious move for Salesforce.com in this post
Today, salesforce.com (SFDC) announced it’s intent to acquire Rypple. Rypple is a small Ontario, Canada based performance management vendor. This is SFDC’s first formal move in the Human Capital Management (HCM) space. But, in my opinion, the news here isn’t really about Rypple – or performance management leading a new affront by SFDC into the HCM market. It’s just SFDC rattling their saber – letting us know they are here.
Guess what? They’ve been here for a while…
On 9/22 I pointed out:
salesforce.com customers already have enterprise licenses or incredibly cost-effective per user pricing, internal expertise, and the ability to DEVELOP CORE APPS internally on the platform (read: be in the cloud and keep my programmers fully utilized). It seems that if they stay on the course they are on now, they will quietly begin to pull business off of the table around what Kutik calls “work management”. If they make one or two key acquisitions, or invest in a few partners – it might not be so quiet. In fact it might get downright noisy for 4 Spires, Rypple, Workday, and SAP.
It’s hard to size up the salesforce.com market-share in HCM, but we do know this (again, from the 9/22 post):
salesforce.com has been extending from sales, into service, then marketing, and internal social networks via their core apps. Key being their core apps. They’ve extended into other areas: HR, Recruiting, Expense Management, and ERP like capabilities (Project Management, Accounting/Finance, etc.) via their “App Exchange” . Their big announcement at DreamForce this week was around new “Social Enterprise” capabilities – Connecting Employees, Customers, Projects, Products, etc. leveraging the customer’s database and the social graph. Sounds a lot like “work management” doesn’t it?
They are already in this space folks – they just don’t make a lot of noise. Vendors like jobscience, that moved their native HR applications to the salesforce cloud, or those that were born on salesforce have been quietly growing and feeding off of the salesforce eco-system. They don’t make a lot of noise at industry events – because, they don’t have to. They just grow.
With today’s announcement Rypple becomes part of salesforce, SAP/Successfactors gets a more nimble and faster-to-market competitor directly in their face… and to add insult to injury, the new business unit named “SuccessForce” will be led by John Wookey, who recently left SAP after serving as a top executive in its SaaS strategy (according to PC World)
I don’t like to make predictions, but this is going to get very interesting. Here are a few things to watch for:
- Work Management, Collaboration, Engagement, Social Enterprise, etc. is something for HR to take seriously and start leading the charge across the Enterprise. Read more HERE and HERE
- Expect more from SFDC. I would expect that they quickly (if not already) realize that while performance management aligns with their core sales app, the management of the Talent Record with a direct offering including ATS, OnBoarding, and Training could possibly give them more market share in HR than SAP, Oracle, etc. by the end of 2012. (consider SMB, Mid-Market, and Enterprise combined) Read the 9/22 post – the apps are already out there – the most notable being Jobscience.
- Successfactors/SAP will be challenged to keep up. There is managing the transition, assimilating to a new culture (a new SLOW culture), and then there is relying on a very large development firm to learn how to release products as if they were an emerging firm. Based on Lars Dalgaard’s (SuccessFactors CEO) video from earlier this week, Successfactors will be relying on the SAP development org to augment their product development. This might not be a match like Chocolate and Peanutbutter… it may be more like an oil spill in the ocean – all life gets slowed down while it gets cleaned up …. time will tell.
- More Pressure on Taleo. Taleo has been difficult to partner with and extremely slow to acquire to extend it’s platform. When they have acquired, the integrations don’t seem to pass muster. The market is now moving much more quickly. It seems they are becoming more and more of an acquisition target.
- What of the Workday/salesforce.com partnership? I don’t see Workday or salesforce.com leading the market via a partnership. It seems TO ME, that salesforce will need to extend it’s acquisition list as stated above, or at least it’s direct investment in partners. Either give them more control over product direction than a partnership. (again my opinion)
- What about the other vendors? Other HCM vendors have an opportunity to retain focus and win more customers while these shops “assimilate”. A true dark horse could emerge. I have thoughts on this – what it will take – but, that’s for another post.
