More views on IBM-Kenexa deal

Tom Paine

I'm trying to dig in and get a more complete picture of IBM's $1.3 billion acquisition of Wayne-based Kenexa, announced on Monday, and the plans for it going forward.

What it is not: despite some media reports, I do not see it as IBM acquiring a technologically superior Cloud or SaaS platform through which it can expand into other verticals beyond talent management. SAP acquired SuccessFactors partially for that purpose, but I doubt Kenexa's overall technology (or technology leadership) is good enough to play the same role for IBM.

What Kenexa and its CEO Rudy Karsan are recognized for is providing thought leadership and superior services in the talent management space, particular around recruiting and talent assessment. But it is a company that has always, in my view, led with a consultative emphasis with technology following, rather than the other way around. That is not necessarily a negative, since Kenexa has usually achieved a solid understanding of customer needs before seeking out technology solutions for them. But it has resulted in Kenexa having many pieces of technology gained through acquisitions spread about in different places rather than being integrated around one platform.

In announcing the acquisition, IBM emphasized Kenexa's potential as a "social business" tool, but in fact Kenexa is not a highly social solution today. This is where IBM hopes to be transformative. Kenexa will become part of IBM Collaboration Solutions (formerly Lotus), IBM's core social enterprise business run by General Manager Alistair Renee, while also working closely with IBM's Global Process Services unit. Thematically, Kenexa fits into IBM's concept of creating a "smarter workforce". IBM apparently also aims to pitch talent management solutions more directly to the CEO function rather than to HR, as has usually been the case.




The survival of Kenexa as a separate entity with a major presence in the Philly area is in doubt. Its workforce is already highly dispersed due to its acquisitions and its operations in India; the Inquirer reports that only 239 of its total workforce of about 2700 are based in Wayne. Forrester analyst Claire Schooley says in a blog post that while the "Kenexa services business is a gem for IBM", she expects the Kenexa name will go away. Also not clear from what I've read is what role Rudy Karsan will play going forward.

Previous PTN Post: IBM to acquire Wayne-based Kenexa for $1.3 billion

Some selected blog posts:

IBM’s Billion-Dollar Social Business Bet (Information Management)

IBM Acquires Kenexa To Help Customers Create A Smarter Workforce (In the Next Version)

Inside IBM's $1.3 Billion Kenexa Buy (Information Week)

IBM Announces Plans To Acquire Kenexa, A Talent Software And Services Company (Claire Schooley/Forrester Blogs)

The Kenexa/IBM deal – The consequences for the HR solution space (Brian Sommer/ZDNet)



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