IBM Acquiring Kenexa for $1.3 Billion

IBM has announced plans to acquire Kenexa, a recruitment and talent-management firm, for approximately $1.3 billion.

Kenexa offers a portfolio of cloud-based services, including performance management and employee surveys. It also offers a “Social Solution,” which leverages social networks to help connect with potential job candidates.

The purchase allows IBM to counter rivals such as SAP, which spent $3.4 billion on human-resources management firm SuccessFactors in December 2011 (the deal closed in February 2012). As with IBM’s purchase of Kenexa, the SuccessFactors acquisition gave SAP a cloud-services platform for talent management and performance monitoring, potentially a vital service for any client looking to streamline its human-resources backend.

Oracle and Salesforce, competitors with IBM for the same pool of business dollars, have also made high-profile acquisitions of human resources firms.

While Kenexa’s offerings include a certain degree of reporting and analytics, IBM can clearly use its deep bench of data-mining software to make those offerings more powerful. In the press release accompanying the announcement, IBM alluded to the acquisition strengthening its ability to help clients “embrace social business capabilities while gaining actionable insights from the enormous streams of information generated from social networks every day.”

Throughout the summer, IBM has rolled out a selection of products designed to augment its analytics portfolio. These offerings include the Analytical Decision Management platform, which integrates social network analytics into predictive models. By applying real-time analytics to all manner of operational data, and tying it to intuitive dashboards, IBM is trying to open up analytics more to regular business workers who may need insights quickly.

“Every company, across every business operation, is looking to tap into the power of social networking to transform the way they work, collaborate and out innovate their competitors,” Alistair Rennie, general manager of social business at IBM, wrote in an Aug. 27 statement. He added that the intelligence mined from those social networks could help companies become “more competitive in their markets.”

But IBM’s rivals are also bulking up on social networking and analytics—meaning that IBM could have a hard fight ahead.


Image: Dmitriy Shironosov/

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