ISG Software Research Analyst Perspectives

The market for talent management software continues to consolidate as SumTotal will acquire Softscape to bring together a combination of customers, people and products that reaches more than 25 million users and 1,800 customers globally. This purchase follows three other recent ones: ADP acquiring Workscape, Kenexa acquiring salary.com and Taleo acquiring Learn.com. The result is fewer but stronger software companies providing applications that enable human resources departments and others in the organization to manage workforce performance. In recent years SumTotal has gone through a transition of management and rationalization of products from acquisitions with financial backing from Vista Equity Partners to help stabilize the company. On the other hand, Softscape had been growing organically over the last 15 years through its closely held ownership to expand its presence across the world. While SumTotal specializes in learning and collaboration along with performance management, Softscape has a complete HRMS and talent management suite that includes recruiting, onboarding, performance, compensation, succession planning and analytics. Now the market has moved beyond applications tailored for HR administrators to those that managers and members of the workforce use to support the development, collaboration, retention and optimization of talent across the enterprise. Many organizations have adopted some or all in a series of applications that address recruitment, onboarding, performance review, compensation and incentives and succession planning, all of which can contribute to creating and managing a single profile for each employee that can be a common reference for people at all levels of the organization. I expect that the product strategy for the combined SumTotal and Softscape will begin with basic integration of products while it builds a more integrated platform and set of applications over the coming year, along with release of new mobile applications. Softscape’s latest release continues its evolution of an entire talent management platform and suite with advances in what the company calls a talent network, support for coaching and workforce analytics. Organizations that already use software from Softscape and/or SumTotal should find the combined entity responsive to their needs since it will be a significant competitor in the market that has a stake in helping customers expand into workforce performance management with its applications. The new entity should be a leader in the consolidated talent management market where ADP, SuccessFactors and Taleo also have strengthened their positions. SumTotal now can scale the company upward while investing in marketing and sales promotions; it will need to be more visible to gain a foothold in customers’ new evaluation and application selection processes. Let me know your thoughts or come and collaborate with me on Facebook, LinkedIn and Twitter. Regards, Mark Smith – CEO & EVP Research

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