customer experience, Digging Inside Oracle's Acquisition Strategy

Oracle’s latest acquisitions show it believes Software-as-a-Service (SaaS) is for real, that CRM is a major growth space and that it must strengthen its cloud-based applications, analysts told CMSWire.

In December, Oracle, one year after it announced its $871 million buy of marketing automation company Eloqua, announced plans to acquire marketing cloud player Responsys for $1.5 billion

And last month, Oracle, led by CEO Larry Ellison (pictured left) scooped up marketing technology specialist BlueKai for what some say is an estimated $350 million to $400 million deal. 

“The big picture is they clearly see an opportunity to establish themselves as a major force in two places,” said Tim Jennings, chief IT analyst who covers Oracle for Ovum Research. “On a macro level, it’s the broad customer experience space, and specifically, the marketing world.”

Customer Experience Wins

The Responsys and BlueKai grabs create for Oracle a “pretty substantial portfolio of marketing and customer experience,” Jennings added. Further, it enables Oracle to become a force in the enterprise applications arena, and “they see it as a space where they’ve got an opportunity" to steal some pork from SAP and others.

Oracle wants to “outstrip their big competitors in this enterprise app space,” Jennings said. Oracle’s goal has also been to build a strong portfolio of cloud-based applications, and most of these recent acquisitions play into that space, Jennings said.

“If you look at Oracle Fusion Middleware -- how do they move that into the cloud?” he asked. “They’re in the process of doing that.” 

Andrew Bartels, who covers Oracle for Forrester Research, said tech vendors like Oracle acquire companies to either fill out the portfolio of what they already offer their existing customers, or to acquire new customers.

“Oracle has emphasized in its history one or the other and in some cases both,” Bartels said.

With acquisitions like Siebel (2006), PeopleSoft (2005) and BEA (2008), Oracle made those deals to acquire clients and revenues.

“There was some technology involved,” Bartels said, “but by and large it was secondary. There was the potential to sell products to those clients … and maybe convert them to Oracle.”

At the same time, Oracle’s not “forcing” new clients to convert. It’s learned its lesson from the “hostile” takeover of PeopleSoft, which included an attempt from the US Government to block the merger based on antitrust issues