Exactly a year to the day after Oracle announced its $871 million buy of marketing automation company Eloqua, Larry Ellison and company announced plans to acquire marketing cloud player Responsys for $1.5 billion.
Oracle has agreed to pay $27 per share in cash for Responsys, and the deal is expected to close in the first half of 2014. It brings more than 450 customers to the Oracle mix with $51 million in revenue during the third quarter.
Oracle's dive into the marketing arena in 2012 has ticked off a year of acquisitions, most notably resulting in a competition with its major competitor, Salesforce.
"It's almost like an 'every time you get one, I have to get my own,'" Rebecca Lieb, an analyst at Altimeter Group told CMSWire.
The deal is noteworthy because CRM oriented companies are now moving aggressively into the marketing space, two worlds that had been decoupled for a long time, she said. "A big part of this is the trend toward big data, and the ability to derive insights on trends across the buyer lifecycle. We haven't seen the end of these acquisitions."
Oracle recently acquired a company called Compendium, a content marketing tool that is being rolled into the Eloqua Marketing Cloud. Responsys is destined for the same fate. Oracle sees Responsys as a clear B2C marketing tool, where Eloqua is focused on B2B customers. As Lieb mentioned, the back and forth buying cycle between Oracle and Salesforce plays out in this scenario.
Salesforce bought ExactTarget in mid 2012 in response to the Eloqua buy. That move came less than a year after ExactTarget itself had bought up B2B marketing automation vendor Pardot. Now both Oracle and Salesforce have marketing systems that are expressly designed for either B2B or B2C customers. Oracle President Mark Hurd said as much in a statement by pointing out B2B and B2C have unique needs.
Responsys Interact monitors and distributes campaigns, much like Eloqua. It seems likely the two will remain separate for now, similar to how Salesforce markets Pardot and ExactTarget.
Part of a Mix of Marketing Tools
Analysts at Gartner had placed Responsys in the Visionary quadrant in this summer's Multichannel Campaign Management Magic Quadrant (MCCM). It found Responsys strong in the retail, financial services and travel and hospitality sectors, a seeming reinforcement of the Oracle take on how the company was positioned (B2C). Additionally, Gartner found Responsys to have strong revenue growth, but to be a bit too dependent on email.
This has been a common criticism of marketing automation tools in general, but it is more relevant in the B2C space where marketers are really starting to aim at places like social media.
"Marketers value product performance over long term tech strategy, and will quickly shift allegiances as new or different products come online," Robert Brosnan, principal analyst at Forrester said in an email to CMSWire.
"Consumer tech is changing rapidly, and 2013's acquisitions are no hedge. Expect Oracle and others to stay acquisitive to keep up with marketer's needs."
The next step for Oracle might even be into the advertising world, Lieb said. Maybe not into display ads but perhaps into something like social media, she added. Whatever Oracle does, keep an eye out next year on December 20 because it might have another acquisition to announce.
What It Means
Analysts at Technology Business Research, an independent technology market research and consulting firm, said the deal proves Oracle "remains unafraid to use its cash-rich position to galvanize its cloud market position and provide the cloud capabilities that install base customers demand. Products that are built on cloud environments are intrinsically easier for vendors to integrate across their products line post acquisition."
TBR noted that it supports two trends: how vendors are expanding their cloud suites to increase share-of-wallet in the rapidly growing cloud market and how IT purchasing power shifting to the CMO. A recent TBR study showed the public cloud market grew at 30 percent year-over-year in the third quarter this year.
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