Thinking Out Loud About the SAP and IBM/Kenexa Partnership

I’m fresh off of the June 5 joint-briefing from SAP/SuccessFactors’ Mike Ettling and IBM Smarter Workforce/Kenexa GM Debbie Landers. Almost one month ago to the day the two vendors announced cloud-to-cloud integrations of their HCM offerings with the stated goal in the title of their PR to “transform talent management.” The actual release read to be more of a standard integration announcement — linking IBM BrassRing Talent Acquisition directly to SAP SuccessFactors Employee Central, and linking SAP Success Factors Learning Management System (LMS) directly to IBM Kenexa’s Learning Content Management System (LCMS).

When two big market leading brands in HR technology announce that they are furthering their strategic partnership with the intention to “transform” an area as important to HR, as talent management, then outline a basic integration offering, it leaves customers, analysts, and thought leaders – well, pretty much anyone paying attention to this stuff – a little confused.

The confusion seemingly got expressed on LinkedIn and in the blogosphere enough to warrant a call with 20-plus of us in the analyst community. The call opened with Mike Ettling and Debbie Landers dispelling rumors. Ettling stating that “both of his two legs were still working” and that “he’s not bored and still enjoys what he’s doing.” I’m still scratching my head about that opening line, wondering exactly what prompted it. Landers later went on to state that IBM is not moving away from the Kenexa suite and remains committed to the market.

I love a good conspiracy theory as much as the next guy, but let’s focus on the facts here for a minute. 

The partnership aspect isn’t new.

IBM and SAP have had a long-standing partnership and have had the ability to resell specific pieces of their product and service offerings for a long time. Nothing new here.

Cloud-to-cloud integrations are good for everyone.

Both Ettling and Landers repeatedly stated that these integrations were customer driven by firms that already have both SAP and IBM/Kenexa in house. These “connectors” that are packaged, licensed, sold and supported, as products — NOT professional services are what customers of cloud vendors should expect from their existing vendors, and will no doubt see more of as time moves on. This provides the customer with more choices that will work better together.

There isn’t much to look at here. Yet.

Right now this is a story about more effective integrations brought to you by the evolution of cloud technology. It’s a good story for customers that will benefit. “This is phase one” was said many times. While there is no timeline announced, this will evolve to eventually include data from both platforms for analytics.

Expect to see both vendors “connect” with other similar solutions.

This is not an exclusive partnership and both vendors will continue to partner with others. Ettling stressed that he believes “ecosystems” beat pure software. I would expect to see SAP/SuccessFactors build out this kind of integration with as many vendors as possible. Landers smartly pointed out that IBM/Kenexa will not move into core HR and that being agnostic there is a strategic advantage for them. She’s right. They also both went on to reinforce the significant global services revenue that IBM drives in BPO for both recruiting and learning. These partnerships drive service revenue for IBM.

Okay, here’s your conspiracy theory.

Several of the analysts on the call were trying to read the strategic tea leaves and potentially interpret this as something provocative in the IBM and SAP go to market – “Is IBM getting into the LMS space?” “Is this a competitive play to compete with Workday?” “Is SAP moving away from talent acquisition?” “Is IBM moving away from talent acquisition?” All good questions, and drawn out by the confusion in the PR.

Here’s the theory I was chewing on after the call – Wouldn’t this integration in both product, service, and sales/licensing set up SAP nicely to acquire that Kenexa technology components that aren’t core to IBM’s Smarter Worforce offering?

I mean, on the call Ettling supposed that if half of the Kenexa customers got on Employee Central via these connectors, the result would be the undisputed leader in HCM.

Just a thought.