Oracle discusses Taleo product plans, girds for new battle with SAP

Oracle moved quickly on Friday to lay out its plans for the HCM (human capital management) software market, a couple days after rival SAP did the same thing.

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SAP and Oracle have each made significant acquisitions of cloud-based HCM vendors in the past few months, with SAP paying US$3.4 billion for SuccessFactors and Oracle announcing plans to buy Taleo for $1.9 billion earlier this month.

While many companies have already invested in a core human-resources software system for areas such as payroll and benefits management, Taleo will bring Oracle applications on the fringes of the HCM category, such as recruitment and employee onboarding, that can be sold into existing and new accounts. Taleo will also give Oracle increased relevance in the cloud software market, as well as staff with hands-on experience running a SaaS (software-as-a-service) business. SAP is seen as getting similar benefits from SuccessFactors.

Once the Taleo acquisition is complete, Oracle will have “the most comprehensive set of enterprise cloud offerings in the world,” said Oracle Co-President Mark Hurd during a webcast event on Friday. And Taleo’s software “clips directly into” Oracle’s own Fusion HCM cloud application, he added.

Oracle wants to offer customers a complete suite of HR applications that includes embedded BI (business intelligence), social network and mobile capabilities, said Thomas Kurian, executive vice president of product development. “We feel we’ll allow organizations to find the best people, have lower turnover and have the best results.”

Kurian sought to explain how Taleo’s products will work alongside Oracle’s existing HR software.

Customers will be able to “plan, predict, and optimally source [their] workforce,” he added. They’ll also gain the ability to identify employees who may be at risk of leaving through predictive analytics, Kurian claimed. Those top performers can then be retained with help from a combination of Taleo and Oracle’s software for internal career development, compensation management and other areas, he added.

Taleo’s recruitment and employee on-boarding software, for which it is well-known, will become preferred offerings, according to a slide Kurian presented.

But Oracle intends to unify the companies’ performance management software into a single product, while providing “a seamless upgrade for all customers,” Kurian said.

Oracle intends to integrate Taleo with its Oracle Public Cloud, on which Fusion HCM runs. This will give the Taleo applications new capabilities for identity management, data services and analytics, Kurian said.

Executives repeatedly noted that Taleo Business Edition, which is aimed at smaller companies, will continue to be offered and supported. This was likely done to quell concerns from customers about that version, since Oracle has focused mostly on how Taleo’s Enterprise version will fit in with its products, said IDC analyst Lisa Rowan.

Kurian also emphasized that Oracle will continue offering talent management software for use with Oracle as well as non-Oracle HR systems, both on-premises and in the cloud.

This likely reflects a fear on Oracle’s part of losing Taleo customers who are now running applications from competitors like SAP, Rowan said.