The announcement was made this morning by the two companies. No price was announced.
SumTotal’s acquisition now gives it a major presence in the growing market for integrated talent management systems. Softscape was one of the earliest technology companies to promote a comprehensive approach to what was — and still is for many employers — a silo-ed system.
Formed by the merger of Docent and Click2learn in 2004, SumTotal began broadening its product line almost immediately. It bought Pathlore, an e-learning firm with a focus on health care training and learning for mid-market businesses, in 2005. Adding Mindsolve Technologies the following year added employee performance management tools.
More consolidation in the HR tech space
Last year, SumTotal, then trading on the NASDAQ, was itself acquired by Vista Equity Partners, which paid $160 million and took it private.
Today’s acquisition of Wayland, Massachusetts-based Softscape continues the consolidation in the HR technology space that has seen Peopleclick and Authoria merge, ADP acquire Workscape, and two of the dominant players, Kenexa and Taleo, both make big buys in the last few months. (Taleo bought Learn.com and Kenexa got Salary.com.)
But the acquisition also adds more evidence — as if more were needed — that the integrated approach to HR management tools is every day becoming the way to go for employers. Josh Bersin, in his analysis of the Softscape deal says, “Remember also that the days of a ‘standalone’ talent management platform are slowly coming to an end.” Bersin, who got advance notice of the deal, declares SumTotal will now be a a major new force in talent management software” and “a large, credible player and can meet the needs of any RFP.”
Softscape’s client base includes some of the best known brands — Seagate, Nike, and Sodexo among them — and a global diversity. Bersin details many of the company’s innovations and firsts, singling out its introduction of an HRMS, employee self-service tools, and a talent mobility module last year.
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A checkered reputation
From a cultural standpoint, Softscape has a checkered reputation. The 200-employee company has a long and bitter legal history with Success Factors that provided the industry with comic opera gossip. Filed by SuccessFactors, the lawsuit alleged that Softscape anonymously created a 43-slide PowerPoint, attacking SuccessFactors. The presentation was made to appear as if it came from a SuccessFactors customer.
There were also counter charges of business espionage by Softscape (eventually dismissed by the court) and a replay of accusations dating back to mid-decade of employee raiding.
The suit was settled with Softscape admitting guilt and paying SuccessFactors an undisclosed sum.
Owned by the Watkins family, whose members filled most of the key positions in the company, Softscape has faced complaints on rating sites of nepotism and poor employee relations. According to information on the SumTotal site, Softscape’s management and employees will be integrated, giving SumTotal about 700 employees worldwide. The firm is headquartered in Mountain View, CA., in the Silicon Valley.