IBM Buys Social Business Company Kenexa for $1.3 Billion

By | Sep 14, 2012

IBM has announced an agreement to acquire the social business company Kenexa for $1.3 billion. The latest acquisition will enrich the vendor's business analytics solutions with social capabilities as well as help businesses dealing with human resource challenges.

With this acquisition, IBM will introduce Software-as-a-Service (SaaS) solutions that use big data collected from social media to provide analysis and information that helps companies make human resource decisions, such as recruitment and talent management or retention.

SaaS HR Solutions

On the surface, IBM seems to be responding to rivals, such as SAP and Oracle, that have recently acquired integrated HR solutions companies SuccessFactors and Taleo, respectively. Furthermore, IBM is not as experienced in providing social media technology solutions, as it has primarily been in the infrastructure software solutions market. However, surveys from leading IT research firms suggest there is a rising demand for solutions that aid recruitment of highly skilled talent, particularly in specialized sectors, like services and technology. There is also a growing interest in the use of Big Data to make business decisions. Many enterprises are looking for solutions that help them maximize social media benefits, which is why IBM's 1.3 billion dollar investment could pay dividends sooner than later.

Growing Needs

Although Kenexa is a relatively new and much smaller company, according to a recent eWeek news article, more than half of fortune 500 companies have already employed services from Kenexa to maximize employee efficiency, growth, and retention. Kenexa has created solutions that help firms deal with some of the most challenging issues for businesses in recent years, two of these being talent recruitment and analytics for Big Data that comes from social networking channels.

These issues are even more challenging for small and midsize businesses in particular because they have less capital to compete with larger firms for talent and social media presence. Also, many SMBs avoid new technology or trends they are unfamiliar with for fear of possible security or other unknown weaknesses in such technology.

The credibility that a name like IBM brings to a smaller firm like Kenexa opens the door to alleviating some of the concerns SMBs might have. IBM's purchase of Kenexa, as well as other recent major purchases of social media and Big Data analysis firms, goes to show the growing use of these tools by businesses. The truth is that if you are not making use of these tools, your competitor probably is or at least probably will; therefore firms not exploiting these trends may be at a strategic disadvantage.

Social media and Big Data analysis solutions are becoming more accessible for midsize firms, whereas in the past a business needed its own social media experts and its own business intelligence unit to play the Big Data game. Today, even small and midsize firms could select from a number of available and quite affordable analytic solutions, only paying for what analysis is need and for when it is needed.

This post was written as part of the IBMforMidsizeBusiness program, which provides midsize businesses with the tools, expertise and solutions they need to become engines of a smarter planet. Like us onFacebook. Follow us onTwitter.

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