Oracle's $1.5 billion acquisition of Responsys last month is the company's attempt to fill its “major gap” in the marketing technology space, an Oracle competitor told CMSWire.
“This announcement continues to provide validation and further attention to the importance of the marketing technology space,” Suresh Vittal, vice president of strategy at Adobe Campaign, told CMSWire. “However at its core, Oracle is a CRM company and doesn’t understand marketers’ daily issues. It realized it was missing market share. Through another acquisition, it is trying to fill a major gap as the stakes are continuing to increase.”
Adobe's Take on Oracle
Oracle bought marketing cloud vendor Responsys Dec. 20, exactly a year after Oracle announced its $871 million buy of marketing automation company Eloqua. According to Adobe’s Vittal, Oracle realized when it acquired Eloqua that the acquisition provided it with B2B capabilities, but didn’t scale to deliver to B2C marketers. He continued:
This led them to an email marketing solution that has less than 10 percent uptake of other channels in their installed base: Responsys. They will find that Responsys too struggles with high volumes cross-channel and real-time customer engagement scenarios.”
Deborah Hellinger of Oracle’s media team declined to specifically respond to Adobe’s comments when contacted by CMSWire. An email to Responsys’ media relations manager was not returned.
Vittal pointed to Forrester Wave's on campaign management for proof of his take on Responsys. Forrester, contacted by CMSWire, confirmed the latest report was released January 2012. In it, Forrester said Responsys’ continued growth proves it can sustain the on-demand, interactive cross-channel campaign management category that Forrester credited Responsys with creating.
"Its clients were highly pleased with the product’s flexibility, personalized messaging, and ease of use, but they cited a need for improvement in application programming interface (API) performance," Forrester wrote. "The company remains a strong choice for interactive marketers, but it faces the same challenge as its closest competitor in email -- ExactTarget. Responsys must accelerate planned improvements to analytics, optimization, and mobile execution."
Forrester grouped Responsys with ExactTarget and Neolane as those "poised to disrupt the campaign management market by delivering integrated campaign execution focused on interactive customer dialogues."
Acquisitions the Norm
It should be noted that Adobe's footprint in this space was helped through acquisition: Day, Omniture, Neolane, Efficient Frontier, etc. Acquisitions such as this have, in fact, been the norm for this space the past four years, including IBM/Unica, SDL/Alterian, Teradata/Aprimo, Oracle/Eloqua, Salesforce/Exact Target, and now Oracle/Responsys.
There have been others, too.
Oracle’s Eloqua and Responsys acquisitions signal that Oracle wants to own the larger, enterprise markets since those solutions provided the most robust solution set for more complex organizations, said Chris Golec, CEO and founder of Demandbase, whose customers include Oracle, Salesforce, Adobe, IBM and Microsoft.
“That said, I very seldom see customers standardize on single providers for their entire marketing stack,” Golec added.
Connecting with the CMO
Another competitor of Oracle’s, SDL, said it will be tough for IT-based Oracle to “build a rapport” with the chief marketing officer (CMO).
“The buying center is quickly shifting away from IT — where Oracle has had the strongest foothold — and is moving squarely into marketing,” said SDL’s Paige O’Neill, the company’s chief marketing officer. “Historically, Oracle has not understood how to engage with marketers, and despite these acquisitions, I think it will be very difficult for Oracle to shift their mindset away from IT to be able to effectively speak to and build rapport with the CMO.”
O’Neill foresees a “big battle” for the attention of the CMO and his/her marketing budget as the CMO moves to the front line to deliver on customer experience in many organizations.
“SDL welcomes this shift,” O’Neill said, “and sees it as another sign that the market for customer experience is continuing to gain significant momentum.”
Moves like Oracle’s not only validate what has been reported about the rise of the customer experience market, O’Neill said, but also reiterate the increasing demand for a cloud-based marketing software platform that spans all phases of the customer’s buying journey.
“Customers require relevancy, and the ability to provide engaging, timely and contextually aware content to consumers from pre- to post-purchase will weed out the true CXM vendors from those playing catch up in the field,” she added.
Quest for Digital Marketing Hub
Julie Hopkins, research director for Gartner for Marketing Leaders, said she doesn’t argue the Oracle-Responsys announcement validates continued momentum in the race several providers are running to knit together a digital marketing hub solution.
“And there may not be ground lost in market share by any provider thus far, but there certainly is market to be captured ahead, and so all of the major players are working to pull together the necessary components to address digital marketers’ rapidly evolving needs,” Hopkins said.
Beyond the dollar size of the customer spend in the industry, Demandbase’s Golec still sees confusion over how the functionality offered by e-mail, marketing automation, content management or web analytics solutions will fit together.
“The reality is that it is far from seamless,” Golec added, “and will be awhile before these acquirers can make these products sing together.”
The leaders in this race, Hopkins said, come from different heritages: Adobe is from more of the creative and marketing side of things; Oracle from more of the data management side of things.
“Each will make arguments about why one is in a better position to win and serve than the other,” Hopkins said. “But regardless of heritage, everyone has an integration task ahead of them, and so the winner will be the company that pulls together a workable solution for marketers, and takes a cart-full of digital marketing ‘stuff,’ and cooks up something great with it.”