Cornerstone OnDemand is a company that provides cloud-based talent management software solutions to nearly eight million people in 179 countries. The company boasts such heavy-hitting clients as Starwood Hotels and Resorts, Turner Broadcasting System, Virgin Media, and Save the Children, among others. Based in Santa Monica, California, Cornerstone has office locations in Latin America, Europe, Asia, Australia, Africa, and Brazil.
Seven months ago, I sat down to talk with Cornerstone CEO Adam Miller for my Entrepreneur Journey series. The company has grown a bit since then, as has the talent management space.
Sramana Mitra: Hi, Adam. Just for context, why don’t you tell us about Cornerstone OnDemand and where you are today? We have covered you before, so we’ll bring that into the discussion. But where are you today in terms of revenue, business, what sectors you are catering to and so forth?
Adam Miller: Cornerstone OnDemand is the leading cloud computing company in learning and talent management. We’re specifically focused on helping our clients empower their people and maximize the productivity of their employees by helping them with every stage of the employee life cycle, from recruiting new employees, sourcing and screening candidates, connecting them with others in the companies, developing them based on their jobs or meeting compliance requirements for a particular industry, setting their goals, measuring their performances, measuring their competence, training them based on gaps in performance or competence, paying them based on performance, and then using that same data to manage mobility within the organization; so, understanding workforce analytics and the opportunity for people to get promoted. This includes succession management and team building throughout the organization.
Today, the organization is used by more than 7.5 million users in 179 countries speaking 31 languages, which makes us the largest independent SaaS subscriber base in the world.
SM: What is the revenue level of the company right now? Are you public or private?
AM: We’re a public company.
SM: What’s the revenue level?
AM: About $114 million.
SM: OK. So, let’s start with a discussion of your sector. The talent management sector, of course, has seen huge adoption in terms of software-as-a-service. We’ve seen two major acquisitions happen: Success Factors acquired by SAP and Taleo acquired by Oracle. There still is Workday out there that is independent and at a substantial revenue level. And then you are still independent. Give me some thoughts about how you see the landscape evolving. What’s happening in the landscape? What do you see happening?
AM: There’s been a massive shift in the market due to the consolidation. The consolidation started a little over a year ago, right around the time that we went public [in 2010]. You saw a rash of consolidation in the space among the independent players. A couple of private equity firms had gotten into the space. They started to roll up some of the smaller companies – some of the low-cost competitors, in particular. Vista bought SumTotal, and then rolled up a bunch of smaller companies into SumTotal. And Bedford acquired People Click and Authoria and then rolled up other companies into that.
SM: So, Vista bought SumTotal and then grafted other small talent management companies onto that platform?
SM: What was the size of the deal? What was the size of SumTotal?
AM: It was a bunch of small companies that rolled up together. The deal was over $100 million.
SM: A total of $100 million?
AM: It’s over $100 million. I don’t know the exact number.
SM: And the second deal?
AM: Yes, it was Bedford. It bought People Click and Authoria. I don’t remember the deal size. It was a while ago.
SM: These were all SaaS companies, talent management?
AM: No, they were hybrids. Some were partially SaaS. Some were single tenant. And then some were legacy software companies.