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. Â This morning, Hewitt Associates announced plans toÂ divest their Cyborg assetsÂ Â in an effort to streamline their HR Outsourcing (HRO) business. Â AlthoughÂ slightly off the mark from myÂ 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,Â Vista Equity PartnersÂ will form a NewCo and license the Cyborg solution back to Hewitt’s existing base of clientele. Â 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-tenantÂ distribution agreements that will eventually displace this legacy platform. Â However, I’m certain Vista captured a minimal commit from Hewitt prior to agreeing to the transaction.Â
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.” Â At that time, Cyborg boasted a client list of 700 firms, supported 5 million lives, serviced 20 countries and had 300 employees. Â 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.Â