Today CornerstoneOnDemand announced plans to acquire Saba, cementing the consolidation of the enterprise learning management systems market. Together, the combined company would have total recurring revenue of around $818 Million in 2019, making the company a near billion-dollar recurring revenue company.

While this makes Cornerstone a force to be reckoned with, it represents the consolidation of a legacy, slow-growing part of the HR technology market and is primarily a financial move by both companies. I’ve been a big fan of Cornerstone for many years: this deal gives the company more cash and scale to grow.

Combined the company now has 75 million licensed users and approximately 7,000 customers.

The reality, however, is a bit messier.

Saba was a pioneering enterprise learning management company that lost its way in the mid-2000s, then expanded into talent management through their own engineering and the acquisition of Halogen Software (a successful Canadian mid-market performance management vendor), Lumesse (a European talent acquisition software company), and a number of other companies. (Historical articles here and here.) The company has its own content development team, and the company was working to rearchitect its products.

Cornerstone, in the meantime, became the number one provider of Learning Management Systems, and continued to innovate and grow. While Cornerstone’s core talent management market is under attack by many vendors, Cornerstone has continued to grow. So this is a deal where the market challenger out-executed the pioneer, and then swallowed them in the end.

repéré depuis

Partagez cet article