IBM yesterday agreed a cash deal to acquire Kenexa, the human resource software manager, marking its entry into the sector.
The deal will see the computing behemoth pay $46 per share, valuing the smaller firm at $1.3bn (£823m), and comes after recent forays into the HR management market from other tech giants.
Kenexa reported a net loss of $1.7m in the last quarter.
SAP bought Kenexa’s competitor SuccessFactors for $3.4bn December last year, while Oracle acquired another rival, Taleo, in a $1.9bn deal in February.
Analysts predicted that the scramble for the social enterprise market was heating up. “This is a big step,” said Rebecca Wetteman at Nucleus Research. “This brings the arms race up a notch.”
Historically IBM has been seen as a relatively conservative technology firm, focusing on email, databases, operating systems and “middleware” – but new boss Ginni Rometty is starting to make her imprint on the firm.
Nomura analysts suggested that moves by competitors into IBMs strongholds have pushed it into more adventurous expansion plans.