At the end of 2009, Bersin did a great analysis of the two organizations that I can’t really beat. It’s a nice objective and score by score view of the vendors that is based in good factual data, and I’m going to take a different approach, but you should read Bersin’s post first. From my point of view, the discussion of the two vendors is quite simple, and the decision around to who has the advantage is also quite clear.
Let’s start with their roots. It’s quite clear that Taleo is based on recruiting roots while SuccessFactors has the Talent Management side. Both have ventured into each other’s strong suite, with Taleo having an incredible launch into performance a couple of years ago. However, as time has gone on and the market has assessed the product, it may actually have been too much innovation for the average HR department to adopt and absorb. I still think it’s one of the coolest products out there, but the change may have been too radical or restrictive. Traditional performance vendors that were more flexible in allowing people to stick with processes that were somewhat similar to their current states might have been more comfortable during the selection process. While we all say we want drastic change, when functional HR people really get down to business, I’m not sure it’s true.
SuccessFactors on the other hand has been reaching into recruiting. Their first couple of sales came in 2009 and the product is in its infancy. What Taleo has spent a decade developing, SuccessFactors has been at for a few short months and the product shows its weaknesses. At the same time, Taleo’s recruiting product shows the immense configurability and options that the market wants, but does not get with the Taleo Performance module – sort of a contradiction. SFSF’s Talent side gives the depth and maturity that simply isn’t there on the SFSF recruiting end.
Next, looking at their market presence, you decide who has the advantage. While Bersin points out that SuccessFactors is in every RFP for Talent Management, Taleo is also in every RFP for Talent Acquisition. This is not scientific at all, but I’m going to say that SuccessFactors has the advantage here. My argument is that recruiting is not so much more complex than performance, compensation, succession, mobility, etc, and that Taleo has much more to build. I’m also going to say that traditional recruiting is much more of a commodity, and that the Talent Management side is often seen as more of a business transaction. Recruiting does not come out of commoditization until you get to mobility strategy, and that is generally a TM function than TA (granted cross functionality). Its generally going to be easier for SFSF to build TA than for Taleo to improve the TM functions.
Lastly, looking at leading the market segments they specialize in, I’m going to say that Taleo has a pretty healthy lead in the TA market, and while SFSF is omnipresent, they don’t have quite the dominance simply due to the larger number of players. Still, I think overall I’m looking at SFSF to be positioned better in the remainder of 2010 as the economy picks up steam and budgets continue to return.