When Sally met Harry – No wait, That’s IBM and Kenexa.

(Read Josh Bersin's post on the Kenexa-IBM Deal Here.)

Should I worry? That's what our members often ask after their software vendor gets acquired by a larger company. The good news is probably not. Vendors are fond of customers and want to keep them, whether or not they keep them on the original products for the long term. But while there may not be any immediate repercussions for end users, there are other ways to look at the ramifications of a buyout.

What and the Why.

Kenexa’s software solutions range from cloud-based talent acquisition (the one time BrassRing), talent management, learning management (OutStart) to compensation (Salary.com). Did IBM offer to pay $1.3 billion for the software solutions? For Kenexa’s 8,900-strong customer base? Or how about Kenexa’s consulting and services business? The latter is my guess. Kenexa’s RPO business grew by almost 50% in 2011.

The Ashbourne Group that supplies occupational psychology services, Talentmine for assessments, and JRA Technology Ltd., that provides surveys to ascertain employee culture.  While the software can augment IBM consultants’ kits, the added services and RPO further extend the service footprint.

And then there is the talent: the 2,800 Kenexa employees will be folded into IBM’s Software and Services Group. 1,637 of those employees stem from Kenexa’s customer delivery and support group, including the Global Support Center. Were these customer-centric people a driver for the acquisition?

Strategy Upheaval.

Companies like IBM, Microsoft, and Sage have a huge partner business. These are cages that they would rattle at their peril.

IBM has always said it relied on partners to provide applications, while it provides the infrastructure:  the middleware on which the application is supported, the DB2 database, and the IBM SmartCloud for SaaS support. The move into application sales, if that is what this, could disenfranchise their many partners who develop competing solutions on the IBM platform.  Employwise, for example, is an integrated HCM and talent management platform that runs on such a platform — will IBM now compete with companies like it directly?

Time will tell... 

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