Consultants continue to talk about whether the Taleo/Vurv deal is particularly good for the Vurv customer base, as one of the risks in becoming the customer of a rapidly growing private software company is not knowing what the ultimate exit will be for the investors.
“Being acquired by a leading talent management solutions company is a very solid outcome, and the customers should have confidence that their interests will be held in high regard,” says Ed Newman, founder of The Newman Group (profile; site).
However, consultant Rick Fletcher with HRchitect (profile;site) mentions that some Vurv customers consciously chose to go with Vurv, instead of with Taleo, because Vurv has traditionally been the more innovative firm with some unique leading-edge product features. Some Vurv customers may initially balk at being asked to migrate to the Taleo applications over the coming year.
“Vurv’s CEO, Derek Mercer, has great ideas and has been highly innovative, but Taleo has been the better-run organization with stronger professional services and customer support. Taleo is a very disciplined organization, while Vurv is a much more free-thinking organization,” says Fletcher.
“One environment fosters innovation, while the other may offer stricter processes. The merger of the two cultures may ultimately be a really good thing for both existing sets of customers,” says Fletcher.
“Keep in mind, Taleo has two platforms today, Enterprise and Business edition. The parts that don’t fit with Enterprise may well fit with Business Edition, making both platforms more complete in terms of the talent management spectrum,” says Newman.
For its part, Taleo says its goal is to incorporate the best of the Vurv intellectual property and product line into the Taleo Platform, delivering a unified recruiting, performance, and compensation solution.
Taleo says its “new” customers will have a simple upgrade path to a unified talent management platform.
“Taleo will continue to leverage cross-company domain expertise to fuel innovation and product leadership as we drive toward product integration, which will likely occur in late 2009,” says Dave Michaud, Taleo’s VP of product marketing.
“Upon closing the acquisition, we will work closely with Vurv customers on appropriate migration strategies based on their business requirements,” says Michaud.
Taleo says Vurv’s Jacksonville, Florida, location will be a key North American operations hub for Taleo, including but not limited to, engineering, production, and support resources.
“We will be working through the entire portfolio of facilities over the next several months to determine how to best optimize our assets. In regards to staffing, we expect synergies between the two entities and some duplication of functions. We will not be able to give more specific information about any redundancies until after the close of the deal and organizational structures have been finalized,” says Michaud.
While the company remains tight-lipped on the future of Vurv’s current staff, Fletcher says he hears that some “Vurv people are out looking for positions, but I would love to see Taleo keep a lot of the R&D people from Vurv, and add some of Vurv’s customer service representatives to Taleo in order to meet their increasing combined customer demand.”
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Taleo runs a well-disciplined machine, says Fletcher, though he points out Vurv’s several strong areas.
“Vurv has stronger compensation, competency management, and workforce transition software, which is primarily an offboarding system,” says Fletcher.
“I believe Taleo will throw everything else away. For them to support two applicant tracking systems makes no sense, so you go with the more stable one, which is Taleo’s Enterprise ATS. And Vurv Express will also be wiped out by Taleo Business Edition,” he says.
They have 48 of the Fortune 100 when you put them together, Fletcher points out. He also says there is room for both the talent management suites and the pure plays in the marketplace.
In fact, Fletcher says that when you merge Vurv and Taleo, it actually helps out other ATS pure-plays.
“Peopleclick, iCims, First Advantage, and even Sonic Recruit, for example, are going to end up ranking higher on the list and getting more market attention as you consolidate some of these top-tier companies,” he says.
Taleo’s Michaud notes that the company “will be working with Vurv counterparts to develop a detailed roadmap over the next several months to ensure we leverage the best capabilities of both companies. Once we have completed this roadmap, we will communicate our go-to-market plans.”
Newman points out that this is certainly the biggest news we have had in our industry in quite a while, and the most substantial in terms of consolidation.
“Overall, I think this is quite an aggressive move and a decision that I am sure was not made lightly. As with everything though, success is about 10% decision, and 90% execution, so the ultimate outcome remains to be seen. I certainly hope it’s a raging success,” adds Newman.