Debbie McGrath

Taleo / Vurv


For some of us who have been in the HR media space for a long time, the relationship with Taleo spans over 12 years. From a small, Canadian French job board, started as Recruitsoft, Louis Tetu grew the business into the largest pureplay talent acquisition software player. To be the number one player, they have had to refine their business model and messaging several times over the last five years to grow the business.
While starting out competing with resumix and restrac with a web-based product on a fee-per-hire model, they were adamant about being the largest best-of-breed player in the talent acquisition space.

The problem with being the largest and best player in the talent acquisition space is that it is a relatively small space; not large enough to warrant significant growth, satisfy shareholders’ expectations in a SaaS model and generally not a scalable enough business model. When Mike Gregoire came in as the new CEO, he faced a number of significant hurdles, which frankly most new CEOs would not have handled as elegantly and quickly as he did. We were skeptical, but now we are not. He has truly delivered in the last 24 months.

Here are some of his accomplishments:
He replaced the entire management team,
He hired many Peoplesoft alumni who really did not have deep talent acquisition experience , but were rock stars at Peoplesoft,
Taleo moved the company’s headquarters and management from Quebec City to expensive San Francisco and then to Dublin (right near his old Peoplesoft stomping grounds),
They replaced the majority of the sales team (and are replacing Jeff Carr who announced his resignation in April),
They entered the SME market with the acquisition of recruiternet,
In January of 2006, he indicated they were not going to stay only in the Talent Acquisition space but were also going to expand to performance and launched a kick ass performance management product (probably the best we have seen in terms of interface) last fall, and
He purchased Wetfeet (campus) and Jobflash (hourly) recruitment solutions,
With yesterday’s announcement of the definitive agreement to buy VURV (who has been rumored to be going public for the last two years), Taleo has now emerged as one of the leading contenders in the Talent Management space and the Talent Acquisition space. Vurv also brings Compensation and Performance Management.

The VURV acquisition is great for the industry as it will solidify Taleo’s position as a market leader in the Talent Management space, expand its geographical reach and eliminate some of the market clutter that is prevalent in the HCM space.
Expect job cuts, integration pains,, and all the normal stuff for a merger of this size; short-term pain for longer term shareholder and user gain.
Clients of both VURV and Taleo should feel very happy that this combined company can deliver a broader platform, more robust solutions and better yet - in a profitable, sustainable fashion.
This leads to a couple of things to think about:
1. When do the LMS vendors who are predominately learning, but have launched into performance, start to collide with the recruiting vendors who are moving into Talent Management, like the Kenexa’s and Taleo’s of the world?
2. Does this make PeopleClick the de facto winner for the best-of-breed solution for Talent Acquisition, as they are one of the only larger pure plays left … and even at that, can you declare them a winner or is their market tapped?
3. Can firms like Halogen, Successfactors and Cornerstone on Demand corner the mid market for Talent Management?