IBM Acquires Kenexa

Today, IBM (www.ibm.com) purchased Kenexa (www.kenexa.com), a talent management cloud-based technology and consulting services firm. Here are some highlights and comments:

¬†IBM’s purchase of Kenexa gets them nearly 9,000 of Kenexa’s clients. Kenexa’s solutions are currently in use at 50% of Fortune 500 firms, certainly a sweetspot for IBM.

 For clients and potential clients of Kenexa, there are several questions that need to be answered and areas that need to be taken into consideration:

1. ¬†What new investments will be made in Kenexa’s products and technology? IBM spends an enormous amount of dollars on R & D related projects. IBM could easily increase R & D spending, giving clients new tools to drive business results.

¬†2.¬†Will IBM enable Kenexa to operate independently as it’s own brand? Of those¬†9,000¬†clients Kenexa has, only 250 of them are Fortune 500 companies – the rest are a mixture of¬†mid-sized companies.¬† Can IBM operate¬†effectively across these market segments,¬†or better yet,¬†how will Kenexa integrate successfully within this new environment?

 3. How will IBM keep the people and management team of Kenexa interested and aligned? When acquisitions of this magnitude occur, people leave, the leadership team almost always changes and entering into the IBM culture as an acquired company can take some getting used to.

The Talent Management/Acquisition/Social technologies market is still highly¬†fragmented – companies that are able to leverage their size, scale and investments are taking advantage of these acquisitions – think Oracle (www.oracle.com), IBM, SAP (www.sap.com) for starters. Next up? Microsoft (www.microsoft.com) – I wouldn’t count them out for making a play for one or several companies in this space.

We already were aware of IBM’s investments in HR Tools, BigData and analytics – Kenexa now becomes IBM’s newest investment. For now, Kenexa is the¬†bright new¬†shiny present for IBM. ¬†It will surely be spoken about daily for the next several weeks, with many industry pundits making guesses, right and wrong,¬†about what IBM will be doing with Kenexa. More importantly, what will IBM/Kenexa be doing for their clients?

 

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