SAP and IBM become friends in cloud HCM

IBM and SAP have acquired SaaS providers in the HCM space, Kenexa and SuccessFactors, respectively. To a certain extent, the solutions compete against each other. The partnership is about the integration of the solutions so that customers are able to use them in a combined fashion.

While HR payroll software is a maturing market, HCM is growing as more and more companies look for solutions that help them to win and retain professionals. Among others, vendors such as Workday, Cornerstone, IBM, Oracle, SAP, Salesforce.com and TalentSoft address this market.

The partnership between IBM and SAP is about the integration of SuccessFactors Employee Central, which provides a cloud-based core HR solution, and IBM Kenexa Talent Acquisition Suite, which is used to attract, hire and onboard employees. While these two solutions complement each other, there is some overlap if you consider the overall portfolios of SuccessFactors and Kenexa.

It is not the technical integration of the two products that is important, but the market potential it provides regarding the competition. IBM is one of the biggest system integrators for SAP solutions including SuccessFactors. So IBM can offer SAP customers wanting to deploy SuccessFactors to extend the scope of their HCM landscape with Kenexa. As Employee Central is part of SAP’s next-generation business suite S/4 HANA, Kenexa can be added here as well.

Bottom line

The deal between IBM and SAP does not include a mutual reseller agreement yet. For now, it is an agreement about APIs and data sharing. We expect more to come from the two vendors regarding sales and go-to-market activities around HCM in the SAP space. SAP customers need to understand why they should require a combination of two products from different vendors and how exactly they can benefit.