Oracle's move doesn't have "much to do with a technology buy," Bloom added. Instead, as with the acquisition of ERP vendor PeopleSoft, Oracle is looking to take out a competitor and gain a revenue stream, she said.
Taleo also has been running a SaaS business and has a lot of knowledge that will be beneficial to Oracle, Bloom said. While Oracle has long sold an on-demand CRM application, that experience isn't as relevant since unlike human resources, CRM isn't subject to government regulations and it impacts far fewer employees in an organization, she said.
Meanwhile, "if you are a Taleo customer, or God forbid are in the process [of becoming one], this should put ice water in your veins," Bloom said. "I have great regard for Oracle, they are an amazing financial machine. But if I'm a customer, I might look at it differently."
Oracle's announcement stated that it is currently reviewing Taleo's product road map, and that "any resulting features and timing of release of such features" are at Oracle's "sole discretion."
But Oracle has invested heavily in its Fusion Middleware and Fusion Applications as a next-generation software platform. Therefore, Taleo customers could expect some incremental improvements in the software over time, Bloom said. However, "if I entered into business with Taleo because I felt they were going to be a continuous innovation machine, that's not going to happen," she added.
The SuccessFactors and Taleo deals also could reflect growing concern on the part of both SAP and Oracle over the rise of Workday, which has landed large deals for its own cloud-based HCM software, Bloom said.
"I think Oracle was drawn in to having to do this deal," said Forrester Research analyst Paul Hamerman.
"I don't know why they didn't make this deal five years ago," he added. Oracle would have paid much less and would have primarily gained recruitment software, Hamerman said. But today, Taleo has built out the "four pillars" of talent management, namely recruitment, employee job performance, compensation and learning, he said.
While Oracle has had great success selling core HR applications for payroll, benefits and other areas, it hasn't had much luck with talent management, Hamerman said.
The overlap with Fusion HCM is not that significant, since it currently lacks recruitment, learning and succession planning capabilities, all areas where Taleo is strong, according to Hamerman. "It's actually a pretty complementary fit."
Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris's email address is Chris_Kanaracus@idg.com.