I'm pretty familiar with this problem space having worked in both a state department of education and a school district. I would not expect this to be a long term success. Virtually every district of reasonable size starts with a homegrown and maintained solution and ends up going with one of the big guys for lots of reasons. 1. Security/liability. You have to have pretty damn good systems here and definitely want to…
Also they could opensource it or sections to get help in hardening the code, create interoperability APIs, or anything they choose. Such an option is usually not a possibility with a private vendor.
Another issues is when you do have a significant change in law or policy getting the vendor to get those updates out in a timely/inexpensive manner may not be so easy.
Interoperability is overrated, what happens when HR decides they to get a new system? ...and that new system doesn't work with your current tracking system X but only with the much more expensive and over complex Y pro system?
I guess it comes down to is how important is it to have your hands on the data and process? I know some schools are really tiring of the "new system every five years or so" cycle that they go through (this can include, besides software, new hardware, training, reassigning staff responsibilities - all depending on the systems needs,) having control of costs and process might help them in the long run.