Kronos, a US-based human capital management cloud provider has entered into a definitive merger agreement with Ultimate Software with the aim to build one of the world’s largest cloud companies.
The combined company will have a stronger position in the rapidly growing human capital management (HCM) marketplace. The companies will have revenues of about $3 billion (£1.54bn), more than 12,000 employees across the globe, and also an enterprise value of $22bn (£11.3bn) along with further plans for growth that includes adding 3,000 employees in next three years.
“We believe the combination of Kronos and Ultimate will create a cloud industry leader in human capital management and workforce management software, and one of the best companies to work for in technology globally,” said Martin Brand, senior managing director at Blackstone in a statement.
According to a study conducted in March 2019 by ISG, when it comes to the HR industry, enterprises have realised the cost savings of software as a service (SaaS) and are now focused on building the next steps. The study found that approximately half of those polled who had leveraged a SaaS model had achieved between 10% and 30% savings in both IT and technology operations and HR administration.
Additionally, Gartner forecast in January that global IT spending will reach £2.95 trillion, an increase of 3.4% year over year in 2020. Global IT spending is expected to hit almost £4tn in 2021. The fastest growing markets in 2020 will be the software market – that is expected to grow 10.5%. The report also predicted that growth in enterprise IT spending for cloud-based offerings will be faster as compared to the growth in traditional (non-cloud) IT offerings through 2022.
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