IBM expands its enterprise solution portfolio, draws close to Kenexa acquisition

IBM (International Business Machine) follows the suit of its biggest competitors in enterprise solutions and acquires Kenexa, recruitment software makers. The company announced on Monday that purchase will finalize in December this year for $1.3 Billion in cash.

IBM’s biggest rivals in the aforesaid business are Oracle and SAP, both of whom have acquired talent management tool making companies earlier this year. SAP purchased SuccessFactors for $3.4 billion in February while Oracle followed with the acquisition of Taleo for $1.9 Billion.

Terry Tillman, an analyst for Raymond James, said the series of acquisition is these companies’ efforts to reform their enterprise business structure, mostly including cloud services. Talent management has become a vital part of companies’ recruitment process and the likes of IBM want to make sure their clients get a full array of services.

“These large enterprise software companies want to remake their businesses and have more of a cloud model, and there has been a lot of opportunity for them to pick up assets in the space,” Tillman said.

The news of purchase by IBM boosted Kenexa’s stock price which jumped 41 percent to $ 45.79. However, the same could not be said for the purchaser. The Big Blue saw a 1.1 percent fall in its share price.

The cloud computing model is catching a strong trend among technology companies because if its cost-effective features. Companies store their data and application on remote data repositories and access them via the web whenever and wherever they are required. IBM, Oracle and SAP are expanding their business models via cloud computing.

Alistair Rennie, IBM’s general manager of social business, said the Kenexa acquisition will make sure the clients get a full range of services including human resource management.

“We are a leader in social networks from a market share perspective and also from a business analytics perspective,” he said. “Our goal here is really to help clients transform every part of their business, enabling a smarter and more effective workforce ….”

Kenexa develops and sells enterprise software related to recruitment and human resource management related services such as behavioural and skills workforce assessments.

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Posted by Usman Khalid on Aug 29 2012. Filed under Sci-Tech. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.