Stock Analyst Says Jury’s Out on Cornerstone Cloud

Mar 30, 2012
This article is part of a series called News & Trends.

Today’s announcement out of Santa Monica that Cornerstone OnDemand is launching a “recruiting cloud” may end up being a successful one due to the company’s strong track record, but it’s too early to say for sure, according to one stock analyst.

Scott Berg, senior research analyst at Feltl and Company, is one of the few stock analysts with a special interest in human-resources related companies like Taleo, SuccessFactors, or even the private firm Workday.

He emailed me some thoughts today on the Cornerstone announcement, one that adds recruiting to a company better known for other human resources technology like performance management and learning management.

I am taking a wait-and-see approach to how customers purchase Cornerstone’s new recruiting solution. We have seen recent entrants into the recruiting software world struggle for sales because the products frequently are not as deep or broad as existing vendors …

… The business logic of (recruiting) software is more difficult than the other aspects of the talent management suite because labor laws and recruiting practices are very different in different countries and the software’s reporting requirements are much different.

That said, I believe Cornerstone has done an excellent job moving from the learning management systems world into talent/performance management. So its historical strong execution is worth noting in this new endeavor. I believe the company will have some success with the new recruiting product; the question is how much. Too early to tell the long term impact.

This move is significant to the company’s long-term competiveness in the space I believe. I continue to see a trend of customers buying human capital management/talent management software more in a suite configuration with multiple products through a single vendor. If this continues further, the company needs an offering in this space. Customers want this HCM software in different suite combinations and recruiting/talent acquisition is one of the required options over the long term, according to current research.

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