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IBM Buys Kenexa in $1.3 Billion ‘Me Too’ Move

It’ll pay about $1.3 billion or $46 a share, a 42% premium to Kenexa’s close on Friday

IBM is following in the recent footsteps of Oracle, SAP and Salesforce.com and buying a cloud-based talent recruiting and management platform.

Its pick is Kenexa which also sells consulting. It'll pay about $1.3 billion or $46 a share, a 42% premium to Kenexa's close on Friday so you know the shares shot up to close the divide.

IBM says the acquisition will let organizations act on insights-driven analytics to create a smarter workforce across every line of business. It sees an "enormous opportunity" to apply advanced social business and analytics capabilities to front-line business operations and quotes CEO Ginni Rometty saying "organizations can think of Big Data as the next great natural resource."

IBM projects its business analytics revenue will reach $16 billion by 2015. Forrester Research estimates the social business apps market will grow 61% through 2016. Kenexa will let IBM grow its piece of the pie while pitching its global scale skills.

IBM claims users will be able to "attract and develop the right skills to build the right teams, for the right projects, the first time."

Kenexa has got 9,000 companies and roughly half the Fortune 500 as clients including Starbucks, CVS, Boeing, GE, the US Navy, Whirlpool, Ford and Corning. IBM says it's already got 60% of the Fortune 100 using its existing social software.

The Pennsylvania firm has 2,800 employees and operations in 21 countries that will be integrated into IBM's Software and Services Groups. Lenexa should do $363.6 million in revenues this fiscal year.

The transaction is set to close in Q4.

IBM did a study this year of 1,700 CEOs from 64 countries and 18 industries worldwide and that found only 16% of them are using social business platforms to connect with customers, but that number is poised to spike to 57% in the next three to five years.

The same study indicates that 73% of CEOs are making significant investments to draw insights from available data.

Another study found that 82% of more than 1,700 chief marketing officers plan to increase their use of social media over the next three to five years.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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