Over the next 60 days Saba, a global provider of human capital management solutions, will finalize the bits and pieces necessary to acquire privately-held THINQ, a leading vendor of enterprise learning management systems.
March 30, 2005
Over the next 60 days Saba, a global provider of human capital management solutions, will finalize the bits and pieces necessary to acquire privately-held THINQ, a leading vendor of enterprise learning management systems. Company leaders say the new organization will offer customers interested in the benefits of enterprise wide deployment of human capital management (HCM) solutions a strategic combination of complementary markets, financial strength and customer-driven solutions.
“There were a number of very important reasons why we felt it was advantageous to put the two companies together,” said Bobby Yazdani, founder and CEO, Saba. “First and foremost, this is going to provide the appropriate scale, the size of business to sustain a long-term R&D effort and solution development for the marketplace. The joint company would be servicing about 36 percent of Fortune 100, which is a significant market share. For large, very large organizations, we would be the number one provider in the public sector, which we believe is a very, very, strategic and important long-term market for Saba to provide solutions, and it’s a growth market for Saba. It’s going to give us the appropriate platform to be the number one solution provider to the public market. All of those things collectively will accelerate our growth, differentiate us for the long haul, and ensure that the community of customers that would join our community of customers would be the enterprise level customers that would support enterprise-wide deployment and the enterprise-wide requirements of a solution like ours.”
“We really see this as complementary because of THINQ’s long-standing commitment and success in the public marketplace,” said Ray Maskell, president and CEO, THINQ. “We also believe that if you look at our strategic objectives to expand our solution capability, (we’ll be able to) expand that community of customers that Bobby talked about and extend our geographic reach because of the large customer support that we provide. More and more organizations implement on an enterprise-wide basis even if they’re U.S-based organizations with foreign operations. We’re being called upon more and more to support those. We think this is a good fit for not just THINQ employees, but THINQ customers as well.”
The market for enterprise learning processes and solutions is growing rapidly. Organizations need products and services to help them forge that integral link between employees’ capabilities and performance, talent management and the strategic goals of the organizations. This point is illustrated clearly by the advantages Saba’s new product suite Saba Enterprise 2005 could offer THINQ customers, who could potentially embrace the new solution to leverage their current learning investments and provide that linkage in a broader, expanded HCM solution that will align people strength with organizational strength and vision.
“Our customers, as well as THINQ customers, want a strong, long-term roadmap. The existing roadmap is no longer acceptable by customers because they are getting more sophisticated. Their requirements are evolving rapidly beyond 12 to 18 months. They want three to five year product road maps,” Yazdani said. “They want to make sure there is continuous R&D along the lines of how the market is evolving, and know companies can absorb the rapid evolutions of these types of requirements. They want to have a solution that is complementary and can be leveraged using their existing ERP (enterprise resource planning) systems. We won’t replace any ERP systems, we co-exist. The human capital management solutions that we are building are designed to provide capabilities to the managers who are in the front line, to the organizations and their owners, and more importantly to the knowledge workers themselves. They are the ones who take advantage of what these solutions provide.”
“Being able to provide a long-term road map to those customers is one of the real values of the acquisition in that it allows many of THINQ’s customers, which are large organizations, to really take a strategic view of this solution in their organization,” Maskell said. “We think that in companies like the Lockheed Martin’s, the Boeing’s and even the U.S. Navy’s of the world, we’ll be one of two strategic applications in their human capital management infrastructure. It’ll be their backend ERP system and Saba.”
THINQ won’t just disappear. Yazdani said while the company going forward will be known as Saba, the THINQ product name and product line will remain in place for some time to ensure that appropriate R&D dollars will be invested where THINQ customers need them. “We are dealing with very sophisticated large organizations with long term plans,” Yazdani said. “Our commitments to those customers are going to be in place for three years.”
Nor will be acquisition mean excessive layoffs for THINQ employees. All but a handful of THINQ employees will join the team at Saba. “In some situations we’ve seen mergers and acquisitions result in the development of cost synergies,” Maskell said. “Over the years both Saba and THINQ have managed diligently to build a cost structure that’s supported by the revenues, but more importantly the heritage of THINQ goes back 14 years. Those people and those experiences are important as we map the future, both over the next three years with the existing customers and beyond in the new Saba organization.”
“We are growing rapidly year after year, and there are quite a few openings across the board in our organization from R&D to support, professional services, sales and account management,” Yazdani said. “Joining our two forces THINQ employees would be able to not only service their existing customers, they would be able to help us out greatly as we are experiencing rapid growth, and they can help us with our growth going forward.”