First, I would encourage everyone to read the great discussion happening on the Center of Excellence (free registration required to comment).
- Overnight, they have eliminated their fiercest competitor
- The acquisition puts them significantly in front of the competition in terms of talent management market share
- Sometimes the best offense is a good defense, and through the acquisition, Taleo has prevented their talent management competitors that don’t have a talent acquisition solution from acquiring one of the leading vendors
- Vurv has build a strong company and great products validated by healthy customer traction
The most important question remains, though, “What will it mean for customers?” Existing Vurv customers will now be forced to go one of three direction. Do nothing (Taleo stated they will continue to support existing Vurv products), switch to another talent acquisition solution, or migrate to Taleo’s on-demand solution. I imagine a large percentage of Vurv customers also considered Taleo at some point and ultimately decided not to select them for many reasons. What are those Vurv customers thinking now that they have, in essence, selected Taleo?
Additionally, Taleo has always been known as the most expensive solution on the market and traditionally priced higher than Vurv. Does this mean Vurv customers should expect a price increase when they migrate? Customers typically don’t respond well to price increases especially if they are not getting significant value in return. And what will Taleo be doing with those Vurv customers that are highly customized (as with one I spoke with on Thursday that has 30 pages of customizations)? The acquisition now forces Taleo into maintaining a lot of customized products and will require them to shift Vurv’s revenue model from 35%+ services-based to less than 20% services based where Taleo is operating!
Lastly, how will Taleo blend the two cultures? Vurv had a very fun, passionate and creative culture that influenced many of their customers. Taleo, on the other hand, lacks a defining culture and has defined themselves as a “professional” company. Can (or will) they co-exist?