First, the company introduced a bold new product offering, Saba PeopleCloud, an integrated new "work environment" which pulls together corporate social networking, knowledge sharing, real-time collaboration, web conferencing, and all of Saba's formal learning technology in a brand new platform.
Saba essentially invented the market for corporate learning management systems 15 years ago, and now the company intends to "reinvent" the market for modern talent management.
Second, the company announced the acquisition of Human Concepts, a pioneering provider of HR organizational charting, visualization, succession, and talent mobility tools. Let us discuss this first, then the more important announcement of Saba PeopleCloud.
Human Concepts is a small but well established provider of organizational charting and planning tools, which integrated with HR software to provide a very powerful workforce analytics and succession planning solution. The core of Human Concepts' suite is it's dynamic, drill-down organizational charts, which can connect virtually any talent data to an org chart.
The company has around 500 corporate customers, and many of them use the system for workforce planning, various types of analytics (span of control, compensation analysis, turnover, tenure, etc), and succession and mobility planning. These "visual employee directories" are one of the easiest ways to analyze BigData in HR – and some of their customers have used OrgPlus (the old name) for an entire analytics system.
Human Concepts has been in the market for more than ten years, and the product OrgPlus was originally sold as a PC-based client-server product. Today it is a Cloud-based system which can connect to any HR database, making it highly scalable and very useful. While the market for HR visualization tools is becoming very hot, the company had a hard time competing with embedded tools from other talent management vendors and was looking for an exit strategy.
Human Concepts and Saba could make a terrific combination. The Human Concepts team understands HR analytics well and brings the Saba team into 500 organizations. Saba's 2000+ customers are now potential buyers of OrgPlus. And we can be assured that the Human Concepts suite will be integrated into Saba PeopleCloud and Saba Learning and Talent Management, giving customers a new, highly visual way to analyze employee data and navigate the organization.
In addition, since Human Concepts plays in the visualization and workforce planning markets, Saba can now position this toolset asa core part of the company's HR analytics and workforce planning solution, a fast-growing emerging part of talent management.
Saba PeopleCloud – Reinventing the Talent Platform
This new product comes from many years of effort at Saba. The company's enterprise learning and talent management software, among the most feature-rich in the industry, has been through six major releases. The newest release, also coming out this week, includes social performance features, enhanced succession management and compensation, and the first release of an embrionic new set of features for recruiting.
The company's collaboration software, originally launched as Saba Social four years ago, was originally designed to help facilitate informal learning – and now has been greatly enhanced with a myriad of next-generation features such as "follow others" and the creation of a "social contribution" index which Saba calls pQ. (The pQ score measures the impact of an individual on an organization's effectiveness, a very powerful concept. Imagine how you feel when your pQ score is lower than someone else's. It could really drive people to collaborate more.)
The company's virtual classroom product, now called Saba Meeting, comes from a pioneering product Centra, which really created the market for virtual classroom offerings. And all these features are now integrated with a bold new user experience.
All this functionality is totally unified now, in a cloud-based solution which is quite exciting to look at, fast, and easy to use.
Driven by changes in the economy, technology, and influx of younger workers entering business, the marketplace for talent management software is colliding with a whole new set of management practices taking hold. Companies today are adopting what we call Agile Management principles: smaller teams, flatter organizations, hands-on management, and new ways to train, motivate, and incent people which obsolete traditional top-down management practices. We call this Building the Agile Enterprise. (I will be discussing this in detail at our upcoming research conference, please come and join us.)
These changes in the way businesses operate are starting to obsolete many of the traditional approaches to HR and talent management. We've seen this happen dramatically in corporate training, where today more than 40% of all organizations tell us they have shifted significant resources toward a social, informal learning model. The old world of performance appraisals, employee recognition, top-down succession management, and leadership training in general are all being reinvented.
Saba sees this trend taking place, and the company has boldly positioned its new software platform as one totally re-engineered for this new way of work.
Saba is not the only vendor which sees this shift: Taleo|Oracle, SuccessFactors|SAP, and Salesforce.com|Rypple have all announced various initiatives to make their products more flexible, social, and integrated with collaboration. And as we've discussed earlier, dozens of new startups have jumped on this bandwagon as well.
But what Saba brings to the table is the "elder statesman" approach: a software platform which has proven to meet the needs of some of the most complex organizations, a sales and service organization that knows how to sell, implement, and support a global, enterprise talent platform, and one of the world's most proven and functionally rich learning management systems.
Over the last year Saba's stock has nearly doubled, demonstrating the market's affinity for this message. Saba is not only a cloud software company (more than 2/3 of its new revenues now come from cloud offerings), the company is starting to deliver very innovative new products. Accenture, IBM, Deloitte, and many of the world's most complex and sophisticated learning and talent organizations are now signing up to use, resell, or partner with Saba in a big way.
Right now Saba is taking advantage of a window of opportunity. SAP is heavily focused on building integration plans for SuccessFactors and the SAP HCM solution. Oracle is still in the early stages of rolling out Fusion (new research on Fusion for members coming soon). Taleo's LMS has not yet reached Saba's level of scale. And vendors like PeopleFluent, SumTotal, Silkroad, and Workday are shifting their investments toward building core HR software. Saba still competes heavily with Cornerstone, Plateau (sold by SAP), Oracle/Taleo, and dozens of smaller LMS companies, but for global end-to-end learning and collaboration the market has become much more concentrated. Largely as a result of this, Saba has now partnered with Workday and Kronos, illustrating how few independent LMS vendors there are left.
I talked with the head of HR services for a global aerospace company last week and he told me that they are now looking at all their vendors again (they are a big Oracle, SAP, and SuccessFactors customer) with a goal of moving to a new generation of platforms which is more integrated, cloud-based, and can help them offload many of the traditional HR services to an outsource provider. LMS is one of his thorniest challenges. We've been having this conversation with dozens of global organizations over the last year, and Saba is now well positioned to win business during this major cycle of legacy systems replacement.
If you are a global corporation and want to find an integrated platform for collaboration, learning, and some or all elements of talent management, Saba has become a very compelling player. While the new PeopleCloud appears to compete with products like Jive, Chatter, and other enterprise collaboration tools, it is actually quite different because it "connects the dots" between many of the ways people work in a novel new environment.
We think this strategy has a lot of potential, and we look forward to watching Saba's progress on selling PeopleCloud to global enterprises around the world.
PS, Come learn more about Agile HR and changes in the TM software market at IMPACT in three weeks (the Saba folks will be there too). It's the premier executive event in our industry, and this year's lineup is the best yet. More here on all the details.