Adding more might to its stable of cloud based software, IBM has agreed to acquire Kenexa for about $1.3 billion. IBM, which has traditionally stayed out of the applications business, preferring instead to concentrate on infrastructure software such as databases and Web servers, is wading deeper into the business application market through various acquisitions. Earlier this year, Oracle Corp. bought HR software maker Taleo Corp. for about $1.9 billion, while last December SAP spent $3.4 billion to purchase rival SuccessFactors Inc., and Salesforce.com picked up Web-based provider Rypple. In fact, Salesforce Work.com is taking its first step toward transforming HR for the social era.
The present IBM-Kenexa deal is the latest sign of increasing competition among enterprise software makers, which are aggressively using acquisitions that blur old boundaries in an attempt to transform their companies for the Internet age where software is delivered as a service over the Internet instead of being sold in expensive licensing packages. It is apparent that IBM is serious about taking on the likes of Oracle, SAP and Salesforce.com in the business application market. IBM, believes that the deal would also help bolster the company’s initiatives around social media in business by helping co-workers connect with one another on various projects. Besides, Kenexa will give IBM access to around 8,900 customers across financial services, pharmaceuticals, retail and consumer industries.