Last week, customer relationship management giant Salesforce.com (NYSE: CRM, Mkt Capt: $31.8B) announced a huge cloud integration with Workday, one of the largest providers in human resources and financial software. The integration was just the latest step in Salesforce.com’s entry into the human capital management tech (HCM tech) space, a growing market that has jumped over 75% in year-over-year financing deal activity.
Salesforce.com first made a splash in HCM tech when it acquired social performance platform, Rypple, for $65M. The firm then spent nine months rebranding Rypple before launching Work.com, a solution to help human resources departments and managers align and motivate their employees and offer feedback.
After Work.com’s launch, Salesforce.com CEO Marc Benioff explained that his company was “interested only in the collaborative aspects of employee management and performance, not in creating a traditional HR application in the cloud.” And an analysis of Salesforce.com’s historical partnerships, investments and acquisitions using the Business Social Graph reveals a bit of a divergence between Salesforce’s stated strategy and real strategy (real strategy being a function of where they are allocating resources – investing, acquiring and partnering).
The visualization below shows Salesforce.com’s entire business social graph since 2006 – which means their partnerships, investments and acquisitions.
A closer look at Salesforce’s initiatives in HCM tech highlight
- Their steady and increasing commitment to the HCM tech space
- Salesforce dipping its toe in the water into some areas that go beyond its traditional areas of focus within HCM Tech
While partnership activity with the likes of SuccessFactors and Workday and others have been common, Salesforce.com has also made investments in several HCM tech startups including The Resumator, ZenPayroll and Hoopla Software. The June 2012 acquisition of ChoicePass, a company that offers employee perks and performance incentives, also aligns with Salesforce.com’s stated strategy of understanding the relationship between employee management and performance.
Interestingly, both ZenPayroll and The Resumator are both a bit outside the normal areas of HCM Tech where Salesforce has traditionally focused. Whether these were opportunistic investments in promising emerging startups or a signal of a shift in strategy to cover more of the Human Capital Management value chain remains to be seen.
The chart below breaks down Salesforce.com’s moves in the HCM tech space over the past seven years along with their areas of focus.
This report was created with data from CB Insights’ emerging technology insights platform, which offers clarity into emerging tech and new business strategies through tools like:
- Earnings Transcripts Search Engine & Analytics to get an information edge on competitors’ and incumbents’ strategies
- Patent Analytics to see where innovation is happening next
- Company Mosaic Scores to evaluate startup health, based on our National Science Foundation-backed algorithm
- Business Relationships to quickly see a company’s competitors, partners, and more
- Market Sizing Tools to visualize market growth and spot the next big opportunity