Wednesday, September 9, 2009

What will happen to second tier ATS providers?

Finally, after a lengthy holiday from both the blog and work, I have a chance to hit the blog again. The subject, ATS providers, also known as recruiting software providers.

As our global economy stabilises somewhat, we are all now beginning see the real trends in HR software reemerge. The ATS space has a rather interesting situation, that is, only a single first tier global provider, namely Taleo. Now, I am not saying that there are not equally good ATS providers out there, but the reality is that Taleo is in a clearly dominant position, when in years past it was merely in a leading position relative to other providers. What makes this question especially interesting is that many of the other ATS providers ostensibly should have the ability to complete very well with Taleo, but thusfar they do not appear to be affecting Taleo's momentum in any serious way.

So here is my rundown of the many second tier ATS providers with some commentary on each. I am certain to be incomplete in my understanding of the providers listed, so I encourage my meager readership to add any insights about any of these providers. I'll update the post based on any feedback.

Authoria - This talent management suite vendor has practically vanished after its acquisition by private equity firm Bedford Funding over one year ago. The Hire.com platform was considered a solid platform. I have no knowledge of any current momentum regarding Authoria in ATS, or anything else for that matter.

HRSmart - Small private HR/Talent management software company with decent recruiting platform. Seems to be a likeable company with happy customers, but is it anything more than a boutique? The company looks the same to me now as it did three years ago.

iCIMS - Company has a strong and broad technology platform with particular historical strength in the mid-market ATS segment. It seems to have very strong customer satisfaction, but for some reason the company has never really broken out, although they seem to be doing well, albeit on a smaller scale. They have recent begun expansion into the UK.

JobPartners - ATS focused talent management suite vendor in Europe. Looked like a promising company a few years ago, but seems to have stalled for a while. Still hanging around.

Kenexa - With the acquisition of Brass Ring a few years ago, Kenexa seemed poised to make a big share gain in ATS, given its limited native offering. Unfortunately, muddy corporate strategy, an unending desire to be all things for all customers, and a seeming total lack of technology competence has collectively ensured that their position in ATS has not advanced at all. Too bad, because Brass Ring was reputed to be a very solid platform, if getting a little dated. A new technology platform is rumored to be pending, but I have no knowledge of its status.

Kronos - This is a large solid company in the workforce scheduling space that acquired Unicru and Deploy Solutions a few years ago to bolster its hourly worker strategy. Everyone seems to respect this company, but it seems to be absent from the broad corporate ATS market.

Mr. Ted - Pure ATS company focused on European market. Very solid large enterprise capabilities, but growth appears to be limited. About one year ago, launched smartrecruiters.com a free small company ATS platform designed to generate revenue via partner job posting fees. Willing to be aggressive, seems to be respected, might be a good pick-up for a company looking to add credible ATS capability.

PeopleClick - In 2005, this company looked like it could be the ATS winner. But, poor technology and product execution really held them back. Founder was brought back as CEO a couple of years ago, and word is that PeopleClick has stabilised. Nice enterprise customer base in North America and Europe. But can it return to growth?

StepStone - The leading European talent management suite and job board provider has two acquired solutions for ATS, i-GRasp for larger enterprises and EasyCruit for small companies. While the products are a bit dated, StepStone's large job board business in Europe provides great synergies relative to its ATS. Recent attempts to more broadly penetrate the North American market have been less than successful however. Just last week, a majority interest in StepStone was acquired by German publisher Axel Springer AG, with a stated intent to acquire the balance. Axel Springer has over EUR 2.7 billion in annual revenue. Curious to see what happens here.

SuccessFactors - The outright employee performance management leader invested in a bespoke ATS technology a couple of years ago. Despite its rapid global expansion, which has leveled off recently, SuccessFactors ATS is considered primitive and not really competitive. Can they get it right and really put pressure on Taleo?

Virtual Edge/ADP - Does ADP have a kiss of death for acquisitions? I think it's possible. Virtual Edge seems to have dropped off the map, except perhaps in the small company market that is ADP's core focus.

Open Source Competitors - There is a rise in open source competitors in the ATS market like Mamook, RecruitPro, and CATS, plus others. Is the core ATS functionality so uniform that open source ultimately wins? A trend definitely worth watching.

By a healthy margin, the ATS market is currently being lead by Taleo. The broader recruiting market though, which includes recruiting outsourcing, job boards, and other niche technologies, seems to be at an all-time high state of flux, with new capital coming in and legacy giants, e.g. Monster, wavering. This alone makes it entertaining and instructive to watch. Where will the ATS be in two years?

I am sure I missed a number of other companies, but feel free to fill in the blanks, correct my factual mistakes, or challenge my conclusions. You can use profanity if you like.

5 comments:

Phill Gillespie said...

You've missed out one of the original UK ATS providers, PeopleBank (full disclosure: I'm their BDM). Having lead the industry in the years (until StepStone went through their phenomenal expansion), PeopleBank is still a respected provider to countless UK companies and several international operations. In 2007 we were purchased by Daxtra Technologies, the European market leader (as well as global accuracy leader) in CV Extraction and Natural Language Searching, this is now a key part of PeopleBank's offering. I hope that's balanced enough!

TechSphinx said...

Thanks Phill for that update. PeopleBank is not a name I have heard in a while. I am glad to see that the company is moving along. Is the natural language parsing capability provding PeopleBank with a disruptive advantage versus other ATS providers? Curious to know, especially given all of the little technical and feature angles that play out in the ATS market.

Phill Gillespie said...

Daxtra's Parsing technology provides us with an unrivaled candidate experience, extracting their CV and pre-populating the application form in a matter of seconds with the most accurate solution in the world (according to independent tests). It means a candidate can apply in an efficient and smooth way, spending all their time on pre-screening (or even CBI) questions that give a far reflection of their personality and professional fit compare to work-history etc.

TJM said...

Hi TechSphinx, I found your blog through Kris Dunn's HR Capitalist and decided to spend some time. I'd be interested to hear more about your SaaS explorations. I'm an angel investor in an online scheduling software company and would like to learn what you're finding out there.

shanecastane said...

Employee performance management systems change with the times. And as the landscape surrounding employee management software continues to evolve, following technological and financial forces, you have to keep up with talent management software to remain competitive and make sure you're getting the most up to date products. If you work in the industry, the employee performance measurement software industry should be followed closely so that you can make the best presentations and know what your competitors are doing.