Your Weekly Dose of HR Tech: @CornerstoneInc Acquires @SabaSoftware

Your Weekly Dose of HR Tech: @CornerstoneInc Acquires @SabaSoftware

This week on the Weekly Dose I’ll give you some reaction to yesterday’s announcement of Cornerstone acquiring Saba Software.

The acquisition actually makes sense at a major level. You have two competitors beating the crap out of each other for customers, both doing basically the same thing. Cornerstone has been considered the best software in the learning space, and Saba, also in learning, was right on their tails, but also had a better offering when it comes to talent management and performance, because of Saba’s acquisition of Halogen a few years back.

On the analyst call, Cornerstone’s CEO Adam Miller talked about the combined company of over 7,000 clients, 75 million users, and over $800M in combined revenue, making the new combined company, staying with the Cornerstone brand, the largest “specialty” HR technology platform on the market.

Why does this matter to you? 

– In a world where big ERP systems are taking over HR technology (Oracle, SAP, Workday) there is a need for technology for organizations that actually need some higher-level ability when it comes to learning, reskilling, performance, and talent management. The enterprise ERP HCM systems are actually fairly good at core HR and payroll, but fairly vanilla when it comes to things like learning, performance, and recruiting.

– What happens to the 3 major pieces of Saba Software (Original Saba, Halogen, and Lumesse/ SabaTalentLink)? My take from Adam’s comments yesterday was that he saw a major advantage by combining what Cornerstone and Saba had on the learning side to make it the world’s largest and leading skills engine on the planet. Also, the performance side of Saba (Halogen) was most likely a bit better than what Cornerstone has already. Lumesse is most likely dead in the water, as when Adam was asked the question, the comment was basically, we already have a strong recruiting product in North America and Lumesse is basically a UK recruiting product we’ll maintain, but we won’t be selling.

– To be fair, I haven’t seen Cornerstone’s recruiting product, but I have seen Lumesse/Saba TalentLink, and from the analysts I speak with that have seen both, Lumesse/Saba TalentLink is the superior product (best of breed talent acquisition platform), and no one would call Cornerstone’s recruiting product best of breed in any fashion, so I’m a bit perplexed at why Adam would throw it away so easily. One analyst I spoke with actually thought one of the major reasons Cornerstone bought Saba was for Lumesse! Lumesse is a proven global recruiting platform and Saba was looking to push it heavily into the US in 2020 and 2021, but those plans looked to be shelved at this point based on Miller’s comments. If I was to rank SabaTalentLink as a stand-alone, best of breed ATS right now, it would be in my top five with the likes of Greenhouse, SmartRecruiters, etc.

– One of the major pieces of the acquisition is the acquisition of Saba’s R&D engineering teams. In an environment where it’s near impossible to recruit great engineering talent already, we’ve seen this move in the playbook many times over the past decade where one company acquires another and a major reason has to do with your ability to grow your engineering team quickly through acquisition. Although, at $1.4B, that’s a hefty price to pay for R&D talent.

– Saba’s CEO, Phil Saunders, will come on as Cornerstone’s new COO. Phil has shown his ability to run a lean ship and produces great margin and profits, and Adam and the Cornerstone team will be looking for those insights from him in his new role.

Strategically, this acquisition makes sense for both sides. Moving forward both would continue to feel the pressure of the ERP’s coming after their clients, and the main tactic to combat that is flat out becoming ten times better than anything they can offer. In a world where organizations are being forced to reskill, develop, and drive performance, the organizations that have this as their main people priority will choose Cornerstone to help them reach these goals.