The suspense is over. Almost five months after Kronos and Ultimate Software merged to create a $3 billion HCM application powerhouse, the combined company has a new name: UKG as in Ultimate Kronos Group with Our Purpose is People as its tagline.
UKG is short and sweet. The only concern is whether some may confuse it with USG, the drywall manufacturer. However, UKG is expected to invest heavily in its new branding push in order to raise the awareness of the umbrella group that unites a plethora of HR, payroll and workforce management applications purposely built for people and verticals.
UKG will start promoting the new name through its sports sponsorship programs like the scheduled appearance of tennis star Novak Djokovic, the current favorite to win the US Open by wearing the UKG logo during the September 2020 tournament.
Acronyms are rare in enterprise software. Among the more than 1,600 vendors featured in our next Cloud Top 500 report, about a dozen or so use acronyms in their names notably ADP, CDK, CGI, FIS, IBM, NCR, SAP, and SAS. Even JDA, the long-time supply chain apps vendor, has recently changed its name to Blue Yonder.
Jody Kaminsky, Chief Marketing Officer of UKG, said after the completion of the merger in April, the company spent months surveying its employees, customers, industry analysts and other key stakeholders to identify and select the new name while incorporating their input for the rebranding strategy.
What UKG aims is to excel in its core areas from Core HR, payroll, and HR Service Delivery in midmarket to workforce management for companies of all sizes, while placing equal emphasis on its global expansion plans.
This is what the UKG press release has to say about its mission:
“UKG will connect employees to their work and their colleagues, develop strong leaders and teams, provide insights that promote better business outcomes, and help organizations develop people-centered HR programs and effective operations—demonstrating that, when companies focus on caring for their people, they will see more engaged employees that yield positive long-term results.”
Our take is that the emphasis should be on the G, which could become a significant force in buying, integrating and scaling out many best-of-breed and suite products to form an expanded network of HCM, payroll, workforce management, talent acquisition and perhaps non-HR applications for the global audience.
Over the next few months, UKG will be busy harnessing its two main operations in Lowell, MA, and Weston, FL, in order to build the momentum needed to rally behind the unifying brand, not a trivial task as most of its 12,000+ employees are scattered all over the world as they continue to work remotely amid the pandemic.
Another challenge is to formulate a cohesive strategy across sales, development and customer success in order to out maneuver SAP and Workday in a tight three-horse race to become the dominant HCM applications vendors. SAP is operating under a new management structure led by Christian Klein as the recently-appointed sole CEO and Workday has been expanding heavily into procurement, enterprise performance management through the acquisitions of Scout RFP and Adaptive Insights after establishing a loyal following for its Cloud HCM applications.
Because the $22-billion merger took place in early 2020, both Ultimate Software and Kronos were still counted separately as they trailed behind SAP and Workday in the worldwide HCM applications market in 2019. Our current estimate is that all three(UKG, SAP and Workday) are on track to post more than $2 billion each in HCM applications revenues in 2020 with SAP maintaining a slight lead because of heavy contributions from Fieldglass, which is expected to experience considerable growth for its contingent labor management applications this year. With the workplace turning virtual and workforce requirements becoming more fungible, employers are expected to rely on contractors and gig workers even more in 2020.
Still, the pandemic and economic downturn will pose significant risks to all three given their exposure to a range of customers in struggling verticals such as leisure, hospitality, retail, transportation, travel, and even healthcare that are being upended by the public health crisis.
What works to UKG’s advantage is its laser focus on HCM, something that is becoming more critical and perhaps fluid than ever given remote work will be here to stay, unemployment rates in the United States and elsewhere continue to stay elevated and shortages of skilled workers remain the top priority for many employers.
If UKG succeeds in helping its installed base of 23,000+ customers tackle any of the above knotty issues in 2020 by touting and fulfilling its mission, its ultimate win as the No. 1 HCM applications vendor may well be within reach.
Partial List of UKG Customers
Source: Apps Run The World, August 2020