Sponsored By

Inside IBM's $1.3 Billion Kenexa BuyInside IBM's $1.3 Billion Kenexa Buy

IBM social business group's move mirrors acquisitions by SAP, Oracle, and Salesforce.com to add online recruiting and talent management to product suites.

David F Carr

August 27, 2012

3 Min Read

Enterprise Social Networks: Must-Have Features Guide

Enterprise Social Networks: Must-Have Features Guide

Enterprise Social Networks: Must-Have Features Guide (click image for larger view and for slideshow)

IBM's social business unit announced a $1.3 billion acquisition of Kenexa, a cloud software provider for recruiting and human capital management, mirroring similar moves by SAP, Oracle, and Salesforce.com.

The big vendors are recognizing that people-centric processes like recruiting, training, and talent management are a natural match for social business. Within the last year, SAP acquired SuccessFactors for $3.4 billion, Oracle acquired Taleo for $1.9 billion, and Salesforce.com acquired Rypple, a startup using social recognition and goal setting to improve employee performance. Saba's People Cloud strategy to build an enterprise social platform branching out from its training and talent management products also fits into this pattern. Alistair Rennie, general manager of social business for IBM, said the combination of Kenexa's cloud software, outsourcing, and consulting services with IBM's enterprise social networking and analytic technologies would benefit companies seeking "to drive human capital innovation, productivity, and change from their employees." [ Need to pull the pieces together? Read How Smart Businesses Reorganize For Social.] Judging from the way it markets itself, Kenexa so far has emphasized the benefits of exploiting social media connections for recruiting, as detailed in a company blog post and a white paper on "Going Beyond Facebook And Linkedin." Rennie said one of the main questions Kenexa can help businesses answer is "How do I find the right people?" However, Kenexa's contribution will not be limited to recruiting, but also extends to areas like employee compensation and retention, he said. "We're looking to take what they know about how to find the right people, compensate the right people, and retain the right people, and combine it with our assets in social business." Rudy Karsan, CEO of Kenexa, said social media is a particularly valuable resource for recruiting because "we can use social to find where people congregate, whether live or over the Internet." The Wall Street Journal noted this $1.3 billion purchase of a public company was a change from IBM's usual pattern of acquiring smaller, private firms. Because this puts IBM in competition with SAP, a key partner, it also reflects a shift in IBM strategy toward competing more in the applications market, in addition to partnering with applications firms through its consulting arm. Kenexa is also attractive because it includes a consulting business, meaning that it in addition to providing technologies it offers the services to help organizations implement them, Rennie said. Buyers are typically looking to achieve a business outcome more than they are looking to buy a technology, he said. IBM expects the acquisition to close by December. Follow David F. Carr on Twitter @davidfcarr. The BrainYard is @thebyard and facebook.com/thebyard Social media make the customer more powerful than ever. Here's how to listen and react. Also in the new, all-digital The Customer Really Comes First issue of The BrainYard: The right tools can help smooth over the rough edges in your social business architecture. (Free registration required.)

About the Author(s)

David F Carr

Editor, InformationWeek Government/Healthcare

David F. Carr oversees InformationWeek's coverage of government and healthcare IT. He previously led coverage of social business and education technologies and continues to contribute in those areas. He is the editor of Social Collaboration for Dummies (Wiley, Oct. 2013) and was the social business track chair for UBM's E2 conference in 2012 and 2013. He is a frequent speaker and panel moderator at industry events. David is a former Technology Editor of Baseline Magazine and Internet World magazine and has freelanced for publications including CIO Magazine, CIO Insight, and Defense Systems. He has also worked as a web consultant and is the author of several WordPress plugins, including Facebook Tab Manager and RSVPMaker. David works from a home office in Coral Springs, Florida. Contact him at [email protected]and follow him at @davidfcarr.

Never Miss a Beat: Get a snapshot of the issues affecting the IT industry straight to your inbox.

You May Also Like