SumTotal Aims to Lead Talent Management Market With MindSolve

G00144831

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Summary

By acquiring MindSolve, SumTotal Systems gains a strong talent management offering, including e-learning, employee performance management, succession management and compensation management applications.

News Analysis

Event

On 14 November 2006, SumTotal Systems, a provider of talent and learning solutions, announced that it had acquired the privately held MindSolve Technologies, which focuses on performance management software, in a cash and stock deal for approximately $12 million.

Analysis

MindSolve's capabilities offer a good fit for SumTotal. MindSolve offers a very strong employee performance management solution, along with succession management and compensation management offerings. However, most of MindSolve's customers use only its employee performance management solution. This is not a significant issue because most of SumTotal's e-learning customers will probably look at employee performance management as a first step into a broader suite. MindSolve represents a good technology fit for SumTotal, because both vendors leverage the Microsoft .NET architecture.

SumTotal is a leading vendor in the e-learning market. Its strategy for assembling a broader set of talent management applications had included a partnership with SuccessFactors, which provides performance management applications. Together, SumTotal and SuccessFactors have had some success selling an integrated e-learning and employee performance management solution. SumTotal will continue to work with SuccessFactors and other providers to integrate their solutions with SumTotal's e-learning solution. In addition, SumTotal will continue to support customers who bought the integrated SuccessFactors solution. However, SumTotal acquired MindSolve because there was still a large opportunity available for an integrated talent management application suite.

SumTotal's acquisition of MindSolve is further evidence of vendors trying to gain a leadership position in the emerging talent management application suite market. Employee performance management is the linchpin of the suite. However, less than 10% of potential customers have purchased employee performance management solutions. SumTotal realized that it could not truly be a contender in the broader suite market without having its own solution. Authoria, Halogen, Softscape and SuccessFactors have established strong initial positions. But e-learning vendors such as Cornerstone OnDemand, Plateau, Saba and now SumTotal will present a strong challenge, as will Kenexa, Vurv and ultimately Taleo from the e-recruitment market.

Recommendations

  • MindSolve customers: Continue investments and consider SumTotal for your e-learning needs. Expect some isolated issues during transition with sales and customer support. Any interruption in short-term product strategy is unlikely, but push SumTotal to provide a detailed road map for longer-term product plans.

  • SumTotal customers and prospects: Consider MindSolve if your organization requires a broader, integrated talent management application suite.

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© 2006 Gartner, Inc. and/or its Affiliates. All Rights Reserved. Reproduction and distribution of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Although Gartners research may discuss legal issues related to the information technology business, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The opinions expressed herein are subject to change without notice.

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