IBM today (August 27, 2012) announced that they will be acquiring Kenexa for $1.3B. Kenexa has been around some 25 years in the human resources management software arena. They help companies to manage recruitment, hiring and retention of employees. A couple of things immediately jumped out at me when I saw this.
- The move is a bit bold for IBM. It’s not that they don’t have enterprise applications. Most of their applications are infrastructure or for specialized groups of users. Analytics, social business, information management, etc., are all part of the IBM stable of enterprise applications but they don’t have CRM, ERP, and other common enterprise applications.
- This is an established company with a real revenue contribution factor. It’s old fashioned in a good way. Too many deals are technology deals that may add something to a product line in the future but little revenue in the short to mid-term.
- IBM is tying this into Social Business and less into traditional process IT transaction management.
The last item is most interesting. It says something about the mindset of IBM and how it views the Social Enterprise. The impression is that Social Enterprise is a means to an end and not the end itself. In a sense, Social Enterprise is not an application as much as a capability. Think of it as the sauce but not the dish.
So why is IBM doing this now? For one thing, the time is right. Recent ESG research pointed out the fact that human resource software is one of the most desired enterprise applications that IT wants to see socially enabled. It’s also one of the least likely to actually be socially enabled. Kenexa fits well with other IBM initiatives in human capital management (HCM) including the process management consulting and Cognos talent management software. It may also be seen as something of a reflex move. Several of IBM’s rivals in the Social Enterprise space have HCM software applications that they can exploit to take advantage of the trend.
A better explanation is that it fits an overarching strategy that puts social tools where, when, and in the places that knowledge workers want them – the applications they use every day. IBM can talk about enabling a “Smarter Workforce” and it sounds great if not a bit vague. The reality is that HCM software is what CRM software was 15 years ago – really becoming a staple of global corporations - and IBM has something more to add to it. That something is the social element that is clearly desired by their customers.