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Software titan and now cloud services provider Oracle has agreed to acquire talent management cloud company Taleo for $1.9 billion, the companies announced today.

The deal greatly mirrors the $3.4 billion acquisition of employee performance management software provider SuccessFactors by enterprise software giant SAP. Oracle and SAP are involved in an intensifying battle for large enterprise customers, as their software and cloud offerings begin to overlap. With SAP buying SuccessFactors, the only proper thing for Oracle to do was to buy a SuccessFactors rival so it can convince customers that it’s on top of its game.

In context, Oracle’s decision to buy Taleo is a bit funny when you consider that Oracle CEO Larry Ellison (pictured) used to fiercely shun cloud solutions, calling them at times “water vapor” and “idiocy.” But Ellison decided to stop worrying and love the cloud in October 2011 with the announcement of the Oracle Public Cloud, infrastructure as a service (IaaS) for customers that want to deploy Oracle Fusion apps in a public cloud, or want to develop Java-based applications with cloud backing.

Together, Oracle and Taleo will offer wide-ranging cloud solutions for managing human resources. The companies expect that the combo of services will “empower employees and managers to effectively manage careers throughout their entire employment, enable organizations to retain talent and optimize costs, and improve the employee experience through faster on boarding and better collaboration with team members via social media.”

“Human capital management has become a strategic initiative for organizations,” said Thomas Kurian, Executive VP of Oracle Development, in a statement. “Taleo’s industry leading talent management cloud is an important addition to the Oracle Public Cloud.”

Do you think the Taleo buy is a good move for Oracle?

Larry Ellison photo: Oracle/Flickr

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