Cyborg Lives Again

I know this sounds like the poorly written title of a new Terminator movie, but alas, the storied history of this “never say die” platform is about to take a new turn.  This morning, Hewitt Associates announced plans to divest their Cyborg assets  in an effort to streamline their HR Outsourcing (HRO) business.  Although slightly off the mark from my 2008 predictions, this does support my thesis that certain HRO providers will streamline their asset portfolio and/or fully divest to achieve the financial performance demanded by their stakeholders.

Under the terms of the divestiture, Vista Equity Partners will form a NewCo and license the Cyborg solution back to Hewitt’s existing base of clientele.  However, I believe this signals Hewitt’s inability to extend the platform to the increasingly varied needs of their markets, thus signaling an opportunity for either Oracle or SAP to establish multi-tenant distribution agreements that will eventually displace this legacy platform.  However, I’m certain Vista captured a minimal commit from Hewitt prior to agreeing to the transaction. 

When sold to Hewitt in May of 2003, Michael Blair (then-CEO who founded Cyborg in 1974) said, “By joining Hewitt, we’re taking our business to the next level – a level where we’ll continue to serve our customers and grow our business to its full potential.”  At that time, Cyborg boasted a client list of 700 firms, supported 5 million lives, serviced 20 countries and had 300 employees.  Mr. Blair retired 18 months later.

After 34 years in the industry, it will be interesting to watch Cyborg live again.

Let’s keep the conversation going.