Oracle is intent on taking an ample share of the increasingly hot HCM (human capital management) software market, and a new internal document describes its battle plan.
The 48-page document, "Fusion HCM and Taleo: GTM [go-to-market] Strategy and Partner Playbook, is dated this month and lays out a detailed set of positioning statements for Oracle's technology, selling guidelines and scenarios and other information.
Oracle spent US$1.9 billion to purchase Taleo, which focuses on the talent management segment within HCM, providing applications for recruiting, employee orientation and learning. It is pairing Taleo's software with Fusion HCM, which handles core human-resources functions such as payroll.
The Taleo deal came shortly after rival SAP bought Taleo competitor SuccessFactors for $3.4 billion. And the competitive stakes got even more interesting this week with IBM's announcement it would buy Kenexa, which offers a number of HR-related applications, for $1.3 billion.
Software vendors are keen to build out an HCM business because the applications can potentially reach and be licensed for all employees in a company. In contrast, CRM (customer relationship management) software tends to be used mostly by sales and marketing departments.
Oracle's partner document explains how its software can be positioned as a full suite spanning many functional areas, as well as sold by individual modules.
It also includes directives on how customers should be approached.
Taleo leads for "full talent suite" deals
For example, on full HCM Suite deals, partners should lead with Fusion HCM, according to the document.
"Net-new" deals for performance management, which covers areas such as employee reviews, would involve Fusion Performance Management added onto a Fusion, PeopleSoft or E-Business Suite core HCM application, according to the document. One exception would be with sales to Taleo Recruiting customers; in that case, Taleo Performance management would be the add-on.
In the case of "full talent suite" deals, Taleo Performance Suite is positioned first, according to the document. "Deal MUST include all Talent modules (Recruiting, Learning, Performance and Compensation)," it adds. However, it's "OK to lead with Fusion Performance in a full suite case if install base is Fusion HCM, or E-Business Suite HCM, or PeopleSoft HCM."
Finally, a "full suite play" should involve Fusion HCM, Performance, and Compensation along with Taleo Recruiting and Taleo Learn, according to the document.
The document notes that Fusion HCM "will remain on controlled availability and require development approval" through October, however. Taleo Performance and Compensation is also on controlled availability, it adds.
Elsewhere, the document reveals details of features that will be added to the Taleo and Fusion HCM products over time. Taleo and Oracle products will be integrated to provide a "unified profile that has candidate, employee and external content," it states.
Until now, Oracle hadn't described in so much detail how the Taleo products will be integrated and marketed, said Forrester Research analyst Paul Hamerman, who viewed the document. "This really kind of lays it out."
Pricing consistent with the market
The document also discusses pricing, including proposed scenarios for unified pricing deals that include applications from both Taleo and Oracle, although it wasn't immediately clear Tuesday whether the dollar figures cited were actual or current. Most modules were priced from $1 to $2 per employee per month.
Those figures "are pretty consistent with what you see in the market," Hamerman said. "What they're looking to do is layer them in $1 or $2 increments and try to get $10 [per employee per month]. That's what SuccessFactors does."
However, Oracle intends to use heavy discounting to win deals, with the potential price breaks growing with the relative size of the company, according to other parts of the document.
For example, a company with fewer than 2,500 employees could be entitled to a "HCM SaaS Base Discount" of 20 percent, while one with between 25,000 and 34,999 could get up to 52 percent off, according to the document. Companies with more than 150,000 workers may be entitled to a 64 percent discount.
Oracle's lineup all told is comprehensive and should be competitive against the likes of SAP as well as more specialized HR vendors, Hamerman said.
Workforce management, which covers areas such as time-and-attendance tracking, "is the only glaring hole right now," he added. It "might make a lot of sense" for Oracle to fill this gap with another acquisition, perhaps of Kronos, Hamerman said.
Oracle may reveal more or updated specifics about its HCM strategy during a "Tweet chat" Twitter event scheduled for Thursday.
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