In its second large acquisition this year, human capital management solutions provider Saba has acquired Centra, an online learning and training solutions provider. Company leaders said the merger will offer customers more choice, cost savings and greater
by Kellye Whitney
October 12, 2005
In its second large acquisition this year, human capital management solutions provider Saba has acquired Centra, an online learning and training solutions provider. Company leaders said the merger will offer customers more choice, cost savings and greater innovations.
“Customers asked for it,” said Leon Navickas, CEO and chairman of Centra. “We have over 40 joint customers in the marketplace that have purchased our products independently, customers that spent their own money to integrate our two products. They bear a high cost of maintaining two vendors, and there’s a better way. There’s a better way to put the software together in a seamless fashion. There’s a better way to deliver it as a single solution. There’s a better way to support it and upgrade it and eliminate all the costs of maintenance, and really lower the cost of ownership and increase the return on investment.”
SABA CEO and Chairman Bobby Yazdani said that from a supplier standpoint, the new company will be the first to offer such a high level of integration, with learning management, collaborative learning and collaboration and learning content management capabilities all in a single offering. This will enable customers to purchase, install and implement from a single vendor.
Navickas added that as the largest vendor in the space, customers will be able to take advantage of economies of scale that other vendors don’t have. “We’re able to use that scale to out-innovate and create more products, support better, implement better, bring more of the ecosystem together into a complete solution. We’re easier and simpler to deal with than all of our competitors,” Navickas said.
Naturally, customers want to know exactly how the merger will offer them cost-saving advantages, and Yazdani said the key lies in how customers’ current learning and human capital management activities will change for the better. “Customers currently are maintaining, implementing and integrating two solutions. In the future, they will be implementing, operating and deploying essentially a single solution. We are removing a significant amount of cost by having a single integrated offering as far as integrating and upgrading these technologies. From the standpoint of the post-sale, we can service the customer better. They will get a better-quality service and support from a single vendor. Right now, they have to call two vendors. They have to talk to two salespeople. They have to talk to two support engineers. That’s an inherent cost in the relationship, where the customer is carrying the cost of two suppliers. Then there is the ongoing technology challenge when there are two different versions of the product and the challenges that the customers have to face with the different versions of the software. The customer has to deal with the quality issues and the integration issues on an ongoing basis,” Yazdani said.
“Think about the solution in learning terms,” Navickas said. “You’re a CLO, and you’re looking at your training and learning needs in a company. You’ve probably lived through computer-based training, right? The CD-ROM, distance learning where you’ve probably used videoconferencing solutions and tried to get that system working. You’ve probably bought some content from a company like a SkillSoft or a NETg and tried to do the self-paced learning modality. Perhaps you’ve experimented with virtual classrooms with Centra and learning management systems from Saba. The future is all about blended learning. That’s what we hear from our customers and thought leaders in the industry. A combination of structured and contextual collaborative ways in which to get information to people in a company to build competencies, gain compliance, create more highly effective people, add skills—all that sort of stuff that relies on getting a blended learning capability into your company. And the larger the company, the more acute the problem is.
“In the recent past, to get a blended learning system, companies have picked the best-of-breed solutions from a number of different vendors—sometimes upward of 12 different vendors supplying piece parts that do various aspects of that and tying them all together,” Navickas added. “You can imagine how logistically complex that is and how cumbersome to own and operate that could be, particularly all these different heterogeneous software environments, different content formats and training on different user interfaces for people and so forth. It’s a nightmare, but companies do it because blended learning is so powerful and delivers an ROI. We’re saying that we can deliver these blended learning systems now by having done the integration of a number of these essential piece parts. We’ve got the collaboration, the learning management, the employee performance management support. We have the instant assist, and all of a sudden, we’ve just consolidated four out of 12 pieces for the customer and really simplified their whole world considerably. And by simplifying their world, we’ve made it less expensive to own and operate and made it easier. That’s the game plan. To continue to add more of those piece parts until we have a complete what’s called human capital management system. That’s the goal.”
The new company will carry the Saba name, but the Centra name will not disappear—it will be used to distinguish a specific suite of products. Further, Yazdani and Navickas said the merger will not subject customers to any integration bumps. “Customers who have bought our products independently and have integrated them will have a much easier time in the future because they’ll have one telephone number to call for service and support,” Navickas said. “They’ll have one software upgrade to do. It will become much easier and much less expensive. The customers who have bought our products for our core competencies and bought some third parties’—one of our competitors’—those customers should still be OK as well, because we intend to support that open interface for integration, and we’re welcoming whatever the customer chooses to put into the mix as well as whatever solutions they desire. We’re giving customers choice, and we have a very open philosophy about it going forward. The customer wins.”