Oracle to acquire SaaS vendor Taleo for £1.2bn

Oracle has announced that it has entered into an agreement to acquire cloud-based human capital management specialist Taleo for £1.2bn.

Taleo is a cloud software vendor that specialises in helping organisations attract, develop and retain human capital to improve performance.

Chief analyst at Ovum, Tim Jennings, argued that the acquisition is an indication that Oracle is attempting to align itself with recent cloud acquisitions made by competitors SAP and Salesforce.

"Oracle's announcement of intent to acquire Taleo is the latest in an aggressive and competitive wave of market consolidation in the cloud-based human capital management (HCM) space, which has seen SAP acquire Success Factors, and Salesforce acquire Rypple," said Jennings.

"These acquisitions indicate the increasing enterprise acceptance of the software-as-a-service (SaaS) model, with HCM following in the footsteps of customer relationship management (CRM) as the next SaaS battleground," he added.

"It also emphasises the urgency that the major enterprise application vendors attach to establishing a strong position in cloud-based software. Both Oracle and SAP have existing on-premise HCM solutions, but both have been prepared to pay out large sums on cloud-based equivalents, rather than simply transitioning their existing solutions to the cloud."

Oracle said that the Taleo board of directors has unanimously approved the transaction, and it is expected to close by mid 2012.

"Taleo's integrated cloud-based talent management solutions optimise how organisations hire, manage, develop and reward their employees and gives companies the intelligence needed to capitalise on their most critical asset – their people," said Michael Gregoire, chairman and CEO of Taleo.

"Joining forces with Oracle gives us the opportunity to better serve our customers."