The deal could bolster Kenexa's recruitment product lineup and put pressure on other players in the growing but fragmented market for software to help with tasks such as hiring and performance management, according to analysts. Big organizations prefer to work with fewer software providers that can offer them more than one product, says Jason Corsello, analyst with research firm Yankee Group.

"Large companies don't want to deal with 18 vendors," he says. "This is probably going to kick-start consolidation efforts."

Wayne, Pennsylvania-based Kenexa's products include applicant tracking and performance management applications, skill and behavioral assessments and recruitment outsourcing. BrassRing, based in Waltham, Massachusetts, offers recruiting software along with consulting services and recruitment outsourcing.

Early this year, Kenexa ranked third on Workforce Management's list of top applicant tracking system software providers, with 400-plus active clients. Vurv (formerly Recruitmax) was first with 845-plus clients, and Taleo ranked second with 421 clients. BrassRing tied for sixth place with 200 clients.

Software products for recruiting, performance management, learning management, compensation management and succession planning are among the HR applications considered strategic these days, as companies focus on hiring well and making the most of their employees.

These products are also sometimes dubbed "talent management" applications. Although the big guns in the HR tech arena, SAP and Oracle, offer such software, much of the attention in the market has been focused on the many smaller players that offer just one or a few of the capabilities.

"We are very excited to announce the acquisition of BrassRing, which we believe is a major event for both Kenexa and the talent management industry," Kenexa CEO Rudy Karsan said in a statement. "BrassRing has a robust technology platform that has been proven at the largest global organizations in the world."

Investors seemed pleased with the deal, along with Kenexa's news that it expects third-quarter financial results to meet or exceed the upper end of its previously issued guidance. Friday afternoon, Kenexa shares had risen more than 12 percent, to $29.78.

Paul Hamerman, analyst at Forrester Research, says the deal is a good one for Kenexa.

"I think it gives Kenexa a better enterprise recruitment solution than what it has currently, as well as a good list of customers," he says.

The acquisition also should help BrassRing customers, says Christa Degnan Manning, analyst at AMR Research. "As performance has been Kenexa's strength, BrassRing customers will clearly benefit from applying this type of discipline and expertise, especially earlier in the prehire phase," Degnan Manning says.

Consolidation already has been under way in the field of talent management software. Among the deals in recent years were First Advantage Corp.'s gobbling up of Recruiternet, White Amber's acquisition by Taleo (then Recruitsoft) and Kenexa's purchase of Webhire.

Kenexa said the BrassRing deal is expected to close in the fourth quarter, subject to customary conditions.

Corsello said others in the recruiting software field seemed to have been outpacing BrassRing. That may have played into the decision to sell, he says.

"Maybe they reached the conclusion that they're playing catch-up a little bit."

-Ed Frauenheim