Oracle Cloud HCM Gaining Momentum. Perseverance Pays Off
Oracle has been in the HR software business a long time. The company had its original Oracle e-Business suite for years, then acquired both Taleo (recruiting) and PeopleSoft, and now has thousands of customers running it’s core HR and payroll software. When Workday and SuccessFactors launched their cloud strategies in the late 2000s, Oracle pivoted hard and built something called Fusion, which took quite a while to come together.
In its early days, Fusion was a middleware-based cloud solution, and many PeopleSoft and Oracle customers found it confusing and not fully complete. But since then the team has totally refocused its efforts and the New Oracle Cloud HCM is a highly competitive offering. In fact it’s so feature-rich and easy to use, I’m starting to see Workday get a little nervous.
Let me give you a sense of what’s going on.
First, Oracle’s business is now growing fast. The Cloud HCM business grew by 24% last quarter and the company now has more than 2,000 live customers and more than 1,000 running Oracle’s new learning system. And Oracle Cloud Learning is an end-to-end solution, including an LXP, enterprise LMS, talent marketplace, and skills engine.
Second, Oracle’s product vision is very complete. Not only does Oracle offer payroll, HRMS, recruiting, learning, and talent management features, the company also offers a talent marketplace, leading-edge employee social system, time and labor management, and perhaps the most advanced compensation solution in the market. This year Oracle added workplace safety and health, a wellbeing platform, onboarding, and a digital assistant that works very well. While Workday has all these features as well, Oracle has now “caught up” and all these offerings are in production.
Third, Oracle’s pricing and services are highly competitive. While many companies love Workday or SAP because of their legacy (or culture), Oracle often sells their platform for a much lower price, and offers its own implementation consulting services. My friends at the big four consulting companies all tell me that Oracle deals are starting to grow, so the army of consultants that know Oracle HCM is growing.
Fourth, Oracle’s product team (led by Chris Leone, one of the most ambitious and knowledgeable product leaders in the space), is innovating fast. The company just offered a real-time pay offering, a system to create custom employee journeys (similar to Workday People Experience), and lots of AI capabilities. The Oracle Skills Assistant not only infers skills like Workday Skills Cloud, it has a similar ontology-builder so you can use it to define your company’s capabilities and skills architecture. (This is becoming a massive problem in every client I talk with.)
The Oracle Learning solution is also very up to date. Both Workday and SAP have invested heavily in learning over the years, but Oracle’s legacy in this market is even deeper. I remember looking at Oracle’s first e-learning platform in the late 1980s, and the company’s learning platform has been used to run Oracle’s learning business for years. So if you’re looking for an HCM platform and learning is critical, Oracle will look pretty good.
And Oracle’s talent marketplace (called Opportunity Marketplace, a new moniker for this functionality), is going to make life difficult for Gloat, Fuel50, and many of the other talent marketplace vendors. It has all the features I would have expected, and it is tightly integrated into the learning and career system.
What Does This Mean For the HR Tech Market
I’m just finishing my massive HR Technology 2021 research study (it will be out in January), so I’ve been thinking about this a lot.
We are now in a position where Workday, SAP, and Oracle have reached some level of parity in functionality and ease of use. Workday, of course, is the industry darling and has the most experience in an end-to-end HCM (and financial) suite. SAP, with its new Human Experience front end, is pushing the envelope with a new innovative user experience, and is now highly competitive for companies that already use SAP. And Oracle Cloud HCM, which appeals to Oracle and PeopleSoft customers, is now a completely viable and very competitive offering.
Added to this we’ve seen the merger of Kronos and Ultimate (renamed UKG) for mid-sized companies, continued growth from Ceridian and ADP, and a massive amount of innovation in SMB offerings including HiBob (just received $70M of funding), Paychex, Paycor, Gusto, and many others. All these vendors are building end-to-end suites, so this has really become a “buyer’s market.”
I’m not saying they’re all the same – they’re not. But for the first time in many years you have many end-to-end suites to consider, and they are all feature rich enough that you can do a pretty good “bake-off” to find the one you need.
For me, as a very long Oracle follower, this is an impressive achievement. For a large software company to absorb Taleo, Peoplesoft, and several other legacy vendors (with many thousands of customers), integrate these systems together, rearchitect the whole suite for the cloud, and then quickly develop advanced features in learning, skills, markeplace, wellbeing, and AI – well it’s really quite a feat. No wonder Oracle’s stock just hit an all time high. (The company is now worth $200 Billion, 25% higher than SAP.)
I want to give Chris and his team a big congratulations – they’ve worked hard for many years and they’re going to see the fruits of their labor in the years ahead. For the other vendors in the market, you know well that you have lots of tricks up your sleeves too – but you have to give Oracle credit for staying focused on this complex market and focusing on what companies need.
Stay tuned for the 2021 HR Tech Market report in January, and in the meantime please join us in the Josh Bersin Academy HR Tech Workshop. The course is open now and we have another new version coming in March, for only $250 you can learn everything you need to know about HR and HR Tech, and our team is there to help.