Posted by Don Holbrook on February 10th, 2012 |
No Comments » Today Oracle announced the $1.9 billion acquisition of Taleo, a cloud based HCM software firm. This announcement comes only 2 months after Oracle’s biggest rival, SAP, announced its acquisition of Successfactors for $3.4 billion. Successfactors is a cloud based employee performance management software located in the Bay Area. In addition to this activity, it is expected that Workday, a Saas based HCM software maker will file for an IPO some in the first half of 2012. Workday was founded Dave Duffield and Aneel Bhusri who were also the founders of Peoplesoft which was acquired by Oracle for $10.3 billion in January of 2005.
This activity validates the interest levels we saw in 2011 for Saas and Cloud based consulting firms. Large consulting firms have been proactively seeking to acquire firms that have Saas or Cloud computing skills to bolster their current offerings or add new practice areas to stay ahead of the demand curve for such skills. As with the multiples being paid for firms such as Successfactors and Taleo, we are seeing buyers willing to pay a hefty premium for Saas and Cloud computing skills.
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Posted by Alan Bugler on February 8th, 2012 |
No Comments » CHILDs sponsored the Atlanta Capital Connection today which was attended by over 100 private equity firms. The tone of the conference was very positive with private equity firms seeing increasing deal flow since the beginning of the year.
I personally met with over 20 PEGs that are interested in the human capital management sector and are very motivated to look at growing companies with quality management teams. Private equity firms typically invest in companies with more than $5 million in EBITDA but there is a smaller group that focus on companies with $2 -$5 million in EBITDA. Both of these groups are actively searching for investment opportunities.
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Posted by Jimmy Secretarski on January 18th, 2012 |
No Comments » Have you ever heard of Salesforce.com? Or this thing that everybody is calling the cloud? Is it software? Is it hardware? Does it produce rain? Should I be concerned about shelter?
The cloud is actually a little bit of all that. The essence of the cloud is man’s basic want and need to enhance functionality while lowering TCO on somebody else’s real estate. Gosh, we’re greedy, aren’t we!
But think about it for a second—a company decides it’s “going to the cloud” and that it’s done with all its servers, boxes, cables, ERP, data storage, switches, routers, blah, blah, blah—that is no small task. In reality, it is an outrageously complex undertaking. And like I’ve said in past blog posts, when there is ‘change’ and it is ‘complex’, services companies with a consulting bent will tend to flourish…..especially if they can manage a piece of that away from the client. So let’s focus on just ERP and data from my litany up above.
In the ERP space, Workday will be going public later this year as the rock star contender going up against SAP and Oracle. And in Big Data, Splunk just filed. When companies like this enter the public markets with great success, it is due to their growth trajectory. And when they grow, the ecosystem for their services partners grows too. We will be coming to market with a few companies over the next months along this theme. There are emerging markets in cloud-based ERP (Workday) and Big Data (Splunk) with tremendous underpinnings—and while the software companies are the centers of those universes, or rock stars, the services partners are growing at a similar rate with attractive value propositions. And if you ask me, given where software multiples are these days, the smart money (with strong returns) is in services……but maybe I’m biased.
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