HR Tech Consolidation: The Return of the Suite

We warned it was coming. Now it’s here.

In just a few months, the Talent Tech landscape has shifted faster than anyone expected. Major acquisitions by SAP and Workday have reignited the old debate between best-of-breed vs. suite, and for the first time in years, the momentum seems to be on the suite’s side.

SAP’s purchase of SmartRecruiters and Workday’s buying spree are not random moves. They signal a new era of HR Tech consolidation where the largest players are building fully integrated ecosystems around modernity, AI, automation and experience. The question is no longer if the market will consolidate but how far it will go and who will survive it.

HR Tech Consolidation. Top down and bottom up.

At the top end, HCM suites like Workday are fast tracking acquisitions in specialist technology. Sana brings deep learning and content automation. Paradox delivers conversational AI. HiredScore adds AI matching and workflow intelligence. Together, these fill gaps that Workday has long been criticised for in recruiting, learning, and engagement.

SAP’s move is even bolder. By acquiring SmartRecruiters, it instantly replaces its aging and much maligned SuccessFactors recruiting module with one of the market’s most modern, AI-enabled recruiting platforms. This is not just an upgrade for existing SmartRecruiters customers; it is a lifeline for SuccessFactors clients who have struggled with outdated functionality for years.

Meanwhile, at the bottom end, we are seeing consolidation by stealth. Vendors are folding features into their core platforms that used to live elsewhere. Avature have led the way by building native functionality across their platform to consolidate many disparate solutions (automated interview scheduling, online interviews, onboarding ect), while iCIMS’ chatbot, SmartRecruiters’ pre-acquisition buildout of CRM and career site tools, and Phenom’s continued expansion into scheduling, onboarding, and internal mobility all point to the same direction: growth through integration.

Some vendors are acquiring. Others are building. But the intent is the same: own more of the recruiting and talent lifecycle (this is about data and wallet share) without sending clients to another partner.

Why is this happening?

There are three main drivers behind the consolidation wave.

1. The economics of AI.

Developing AI capabilities at scale is expensive. Vendors need vast datasets and infrastructure to make their models relevant and compliant. By consolidating, platforms gain access to shared data, unified training sets, and faster learning cycles. This is why the biggest deals are happening in companies that already have strong AI roadmaps.

2. Buyer fatigue and platform consolidation.

Over the past decade, HR leaders have been managing increasingly fragmented tech stacks - much to the chagrin of IT and procurement teams. A CRM here, chatbot there, onboarding platform somewhere else. Every new integration adds cost, risk, and maintenance. Suites promise simplicity: one login, one data model, one vendor relationship. Whether all suites truly deliver on that promise is up for debate, but the appeal is strong enough to drive serious spending.

3. Shareholder value and system modernisation.

Publicly listed vendors like SAP, Oracle, and Workday are driven by shareholder expectations, while private companies such as SmartRecruiters and Paradox have investors that expect a return. With global economic uncertainty slowing new customer acquisition, buying competitors is a faster way to grow revenue and expand market share. Acquiring smaller, AI-focused companies brings both a ready-made customer base and a positive story for investors. It also helps offset technical debt within older platforms. The reality is that many large systems are built on outdated architectures that make innovation difficult. Integrating modern technology through acquisition can be an easier way to refresh a product than rebuilding it from within.

A Lesson in History

We study history to understand the future, and every consolidation cycle eventually resets the innovation curve. Let's start at the beginning, the infamous dot-com bubble.

During the late 1990s, the dot-com boom fuelled unprecedented investment in internet technology. The rapid adoption of the World Wide Web attracted massive venture capital, driving valuations of tech firms to unsustainable levels. When the bubble burst, the NASDAQ lost around 75 percent of its value in a single year. The correction forced investors and vendors alike to reassess what real value looked like in digital products, and that recalibration paved the way for the enterprise software wave that followed.

The same pattern appeared in HR Tech a decade later. The first major consolidation cycle saw legacy enterprise vendors absorb the leading recruitment systems of the time. : IBM acquired Kenexa, SAP bought SuccessFactors, Oracle bought Taleo, and ADP bought VirtualEdge. Each of these deals aimed to modernise core HR offerings and pull recruiting into the enterprise suite.

At that time, the major suites were almost entirely on-premise. They did not understand SaaS or recruiting, and their products showed it. The consolidation cycle was triggered by the rise of cloud computing and the opportunity SaaS represented. The big enterprise vendors needed to modernise quickly, and those acquisitions solved multiple problems at once.

In 2010, that wave of consolidation gave rise to a new generation of SaaS-native best-of-breed Talent Acquisition platforms such as Avature, Greenhouse, iCIMS, Lever, SmartRecruiters and several others. It was not just a new era for applicant tracking. Entirely new and previously unimagined categories emerged, including CRM & Recruitment Marketing, Video Interviewing, Skill & Behavioural  Assessments, Conversational AI & bots, and Reference and Background Checks. The world of SaaS felt new, fast, and full of possibility.

Now we are watching history repeat itself. Once the dust settles from the current wave, expect the same reset. The next generation of innovation will likely come from smaller best-of-breeds, the question is, do they have the staying power to support the large corporations the way the suites can?

What happens next?

Companies like Rippling and HiBob are the next to watch. They have succeeded in core HR and payroll but their recruiting modules lag behind. Expect them to enhance those capabilities quickly, either through acquisition or rapid internal development. Some of the mid-market ATS providers are likely to be targets before the year is out.

Oracle remains a sleeping giant, still selling the now legacy Taleo platform and the newer but often maligned Oracle Recruiting. At some point, it will have to make a bold move or risk being permanently left behind. Salesforce has the platform and ecosystem to play in this space but has yet to make a decisive push. Microsoft, with LinkedIn, Copilot, Teams and Fabric in its stack, already owns more of the talent data ecosystem than most realise. If it decides to connect those dots, the market could change again overnight.

SAP and Workday have much work to do to deeply integrate their newly acquired tools. SAP announced their initial plan to migrate customers over the next 3-5 years - a very ambitious but definitely achievable goal. Meanwhile Workday has moved quickly to integrate Paradox’s conversational AI platform albeit rebadged as the ‘Candidate Experience Agent’.

AI-native start-ups will not try to replace Workday or SAP. They will extend them, creating tools that plug into those ecosystems while adding agility and creativity the larger players struggle to deliver. Integration will be easier, compliance simpler, and data flow more seamless than ever before.

For HR leaders, this means the buying criteria is changing. The old trade-off between flexibility and simplicity is shifting. You may not need to choose between best-of-breed and suite, as the next wave of tools could give you the best of both worlds.

Does this mean best-of-breed is dead?

No. But best-of-breed vendors will need to evolve quickly. Their strength in innovation and specialised capability is no longer enough as buyers focus on integration, data flow, and simplicity. More organisations are moving toward suite models that promise a single source of truth and fewer vendor relationships.

To stay competitive, best-of-breed vendors must show how they fit into the broader ecosystem. Expect faster, simpler implementation, partnerships, and deeper integrations designed to work within the major suites. The best-of-breed era is not ending, but it is changing shape.

Final thoughts

The suite is back, but it is not the same as before.

This new era of consolidation is driven by data, AI, economics and integration, not just scale. The major players are buying time, talent, and technology to close long-standing gaps and prepare for the next decade of work. Whether that leads to better outcomes for employers and candidates depends on how well they execute, and how quickly the next generation of innovators responds.

Consolidation is accelerating, not slowing. The smartest move for HR leaders is to stop focusing on who owns what and start watching how fast those tools evolve once the mergers settle. Because as history has shown, every wave of consolidation sets the stage for the next leap in innovation.

If you’re designing your stack from scratch or writing your future tech stack strategy, get in touch with TalentTech as we can bring clarity and confidence.

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