Oracle's Taleo Acquisition Will Create Cloud-Based HR Resources

Oracle's acquisition of Taleo Corp. for $1.9 billion is a big step in building a cloud offering for human resources departments.

Oracle has acquired Taleo Corp., a cloud-based talent-management provider, for $1.9 billion.

According to a Feb. 9 statement, Oracle intends to use Taleo€™s assets to €œcreate a comprehensive cloud offering for organizations to manage their human resource operations and employee careers.€ In addition to streamlining the on-boarding of new hires and reducing costs associated with HR processes, the resulting platform will apparently leverage social media as a means of enhancing collaboration between employees.

€œTaleo€™s integrated cloud-based talent management solutions optimize how organizations hire, manage, develop and reward their employees and give companies the intelligence needed to capitalize on their most critical asset€”their people,€ Michael Gregoire, Taleo€™s chairman and CEO, wrote in a Feb. 9 statement.

Oracle is making deeper forays into the cloud, with an eye toward challenging rivals such as and Microsoft. Its plans encompass Web-based enterprise apps centered on customer relationship management (CRM), human capital management (HCM) and social-networking tools. Oracle€™s Public Cloud offers a combination of applications, middleware and database software hosted and managed by the company, fronted by social-networking software.

€œOracle€™s announcement of intent to acquire Taleo is the latest in an aggressive and competitive wave of market consolidation in the cloud-based Human Capital Management (HCM) space,€ Tim Jennings, chief analyst at Ovum, wrote in a Feb. 9 statement, €œwhich has seen SAP acquire Success Factors and acquire Rypple.€

These acquisitions, he added, €œindicate the increasing acceptance of the software as a service (SaaS) model, with HCM following in the footsteps of CRM as the next SaaS battleground.€

Oracle is also applying the cloud to stricter verticals, including health care. In October, Oracle Health Science introduced OutcomeLogix On Demand 3.0, a Web-based application that enables life-science companies and contract research organizations to collect data on the outcome of various therapy treatments in late-stage trials. OutcomeLogix runs in the Oracle Health Sciences Cloud, a Web-based infrastructure that Oracle intends to speed up IT deployments and reduce the IT infrastructure needed to run health care applications.

Oracle CEO Larry Ellison has made no secret of his company€™s plans to move into the cloud on its own terms. In September 2010, Oracle introduced the Exalogic €œcloud in a box€ system for implementing self-contained cloud environments, leveraging hardware from the then-newly acquired Sun subsidiary and a highly integrated Oracle software stack of database, middleware and applications.

In the enterprise-cloud space, Oracle€™s most high-profile opponents include Salesforce, whose cloud solutions emphasize Facebook- and Twitter-style social networking; Microsoft, which markets a variety of cloud-based platforms for Web developers and office workers; and SAP, which is expanding aggressively into mobility.

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