Sonar6 Acquired as Vendor Consolidation Continues

Mar 8, 2012
This article is part of a series called News & Trends.

New Zealand talent management vendor Sonar6 has been acquired by Cornerstone On Demand in a deal valued at $14 million.

Cornerstone’s stock closed up 6.19 percent to $22.12.

Sonar6 serves the small- to mid-sized market, while Cornerstone serves mostly larger employers with a full lifecycle software suite that is especially strong in the performance management and learning areas.

Both companies are SaaS provisoned, so the acquisition, unlike that of SuccessFactors and SAP, and, to a lesser extent, the recent Oracle deal to buy Taleo,  appears to be for just the reason Cornerstone says: “The acquisition will accelerate the company’s momentum in the small business (SMB) market.”

The SuccessFactors deal was primarily to give SAP a fully cloud-based capability. The German company had been developing its own SaaS suite, but it was plagued by delays. Buying SuccessFactors gave it an instant SaaS product line, which SAP said would remain independent of its on-premises enterprises systems.

Taleo is not entirely cloud-based, though it has SaaS services for most or all of its products. Oracle, like SAP, has been moving to a cloud-based architecture, but is further ahead with products already brought to market. Acquiring Taleo not only accelerates that process, it also removes a strong competitor.

Cornerstone said it won’t try to integrate Sonar6’s performance management and succession planning tools. “Following the acquisition, Sonar6 will be rebranded as a Cornerstone solution specifically for small businesses,” says the announcement issued by Cornerstone. However, Sonar6 solutions will continue as separate products, “to preserve Cornerstone’s 100 percent organically developed solution for enterprise and mid-market clients.”

In a barely veiled reference to the recent acquisitions, Cornerstone CEO and President Adam Miller said, “ERP vendors are now engrossed with integrating disparate enterprise systems, and we saw a clear opening to accelerate our growth strategy and penetrate the SMB market. Sonar6 has built a reputation as the leading talent management solution for small businesses. Together, we plan to expand Cornerstone’s global market opportunity.”

Sonar6 has some 375 customers, and a handful of accolades including being named a top 10 HR product by HR Executive magazine. The acquisition, which is expected to be completed next month, will leave the Sonar6 team in place and still based in Auckland.

CEO and co-founder Michael Carden will be appointed as Cornerstone’s newly-created position of vice president of small business operations. In addition, co-founder Mark Hellier will continue his role driving innovation as head of products for small business operations.

This article is part of a series called News & Trends.
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