Lots of Activity in the Cloud

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.