It's Not The Ripples From A Single Pebble But Their Interactions With Others That's My Mental Image of Market Disruption
Introduction
The idea for this series comes from the work I did to update my competitive landscape talking points before several recent client meetings. After updating the vendor by vendor notes which are at the core of these materials, I was working on a new section I had titled “Wild Cards” when I decided that this section might make an interesting series of blog posts. What all of my “wild cards” had in common was their ability, if they happened (and these were all quite speculative although not without some foundation), to disrupt in a serious way the HRM enterprise software competitive landscape.
Now I know that some of these “wild cards” are very much in the works, but NDAs prohibit me from commenting on things that aren’t otherwise visible, so my competitive landscape talking point section on these is based entirely on information that’s available publicly — if you know where to find it and how to interpret it. With great care to protect everything which is privileged, this series of posts will lay out some of those “wild cards,” the nature of the potential disruption, why I see them that way, and how their actions could cause enough ripple effects to be called disruptive — if they happened.
[In the interests of full disclosure, except where I’m prohibited from doing so by contract with that vendor, I’m going to note my relationship to each cited vendor when first they are introduced in this series. And I’m deliberately not going to cover any vendors where I know too much even if they are on a potentially very disruptive path.]
But first I’d better say a few words about how I view disruptions and disruptors in the competitive landscape for HRM enterprise software. Actually, it’s easier to say what disruptions aren’t:
- new releases from known industry participants that extend functionality but leave existing object models/architectures/business models/sales and marketing processes/etc. essentially untouched — unless they are already on a disruptive path with any to all of these and their new releases are building on same, gaining momentum and/or market share, unleashing disruptive stuff that’s been cooking behind the scenes and/or generally extending the reach of what are already disruptive elements;
- startups whose products add to the competition in a particular niche, e.g. the fifteenth product that helps you source passive candidates from the social Web, without changing materially either the price/performance of that niche or the achieved business results in the eyes of the customers — but real disruption could come from such vendors (in my view) IF they’ve got something under the covers for which their early releases are proofs of concept, needed to raise the capital to unleash the full power of what they’ve done or similar;
- tremendously improved interfacing of products by their serial acquiring parents, which can be extremely useful when combined with innovations in UX etc. — unless of course this were combined with dramatic reductions in maintenance/subscription pricing or some other disruption of the business model that surrounds the software; or
- acquisitions where the acquirers are filling in missing pieces of their product roadmap, aggregating customers/revenue (unless it’s on the scale of an Oracle acquiring PeopleSoft), opening up new geographies with indigenous offerings which essentially replicate what the vendor already provides elsewhere, etc. — but acquisitions of incredible technology that allow a broadly-based and otherwise successful vendor to provide disruptive business result impacts to their existing customers, now that might be disruption!
What I’m looking for are business and/or product developments that change the conversation about HR technology, change the dynamics of the market, deliver fundamentally more business value to end-users, and in doing so cause material ripples across the competitive landscape that impact many to most other competing vendors. Looking in our rear view mirrors, a great example of such a disruption was the coming to market of PeopleSoft in the late 80’s, after which all of the dominant mainframe-era HRM enterprise software vendors went into irreversible declines. Another great disruption was the impact on job boards of the rapid expansion of social sourcing — and the impact on recruitment advertising in print media when job boards boomed.
Kronos
It’s easy to look backwards to spot those major disruptions, but I’m going to go way out on a limb in this series by trying to spot things which haven’t happened yet but which very well could. And just to give you a taste of things to come, let me start with a company I respect tremendously but with which I’ve never worked (so I don’t even have to forget anything that’s under NDA) and which is the “eight hundred pound gorilla” in global workforce management products and services — Kronos.
Kronos has released several technically innovative products in this last year, added mobile (including tablet) capabilities, enhanced analytics, expanded geographically, and is morphing their business model toward hosting and subscriptions even as they continue to grow at a substantial rate. All of that is good news for customers, investors and employees — good news, and perhaps disruptive for Kronos in its own market, but not disruptive to the competitive landscape in the way that I’m defining it here.
But can you imagine a scenario in which Kronos would become a major disruptive force across the global HRM enterprise software competitive landscape? Not just by being an ever expanding and more successful version of itself — a path it’s already on — but by doing something that would get the “talking heads” scrambling to explain so major a development?
I think they could do this (and I’ve mentioned it before) by either delivering from their own skunk works (but I’ve seen no public clues to this) or by buying an integrated, true SaaS with some SaaS InFullBloom capabilities, already multi-national if not global HRMS/TM platform (along, ideally, with a profitable surrounding business and customer base). With their global direct and channel partner distribution assets, their ability to upsell into their huge installed base, many of whom will be making core HRMS/TM upgrade/replacement decisions over the next 3-5 years, their increasingly global subject matter expertise, and their excellent reputation/leadership, if they could build or buy the right platform, I think they could be a real market disruptor. Could their recent acquisition of SaaSHR be a small step in this direction, testing the possibilities?
Were Kronos to launch a truly competitive HRMS/TM platform as described here, they’d be ready to catch the wave of upgrade or replace that’s going to hit the middle to upper end market segments among those developed economy organizations that have invested heavily in now aging ERP/HRMS foundations. If it were great software, SaaS InFullBloom, their huge installed base would give them immediate credibility and upsell opportunities, and they’d be in a position to give the obvious competitors a run for their money. And with their inroads in China and elsewhere in the developing economies, as well as their knowledge of the regulatory and cultural requirements of these markets, Kronos’ feet on the ground and in place relationships could move a ton of core HRMS/TM software in these markets.
But all of this is pure speculation on my part, albeit not entirely loony. It’s really just an example of what I mean by disruption — and of the kind of scenario analysis that’s useful when vendors are placing major bets that could be overtaken by such a disruption. Over the next several weeks or more, I plan to lay out a number of other potentially disruptive possibilities taken from my “wild cards” analysis. If this topic is of interest, please stay tuned.