Salesforce.com (news, site) has announced a definitive agreement to acquire the social media monitoring platform Radian6 for US $326 million.The plan is to integrate the service into Salesforce products Chatter, Service Cloud, Sales Cloud and Force.com, clearly demonstrating the importance that social media engagement is playing in today's organizations.
Following is a segment from an interview CMSWire conducted this month with Salesforce EVP Alex Dayon. In this session he discusses sentiment analysis and the company's integration with Radian6.
Social Engagement and CRM
In one of the interview segments CMSWire did with Salesforce.com EVP Alex Dayon, he stated that social engagement and CRM are being blended together to support the way organizations really engage with their customers. He also said that the number one challenge for organizations is monetization of that engagement.
Which means the acquisition of Radian6 makes perfect sense. Salesforce will now be able to integrate social media monitoring capabilities into all its products, helping organizations better understand the needs of its customers and how to support them.
In the following interview CMSWire talked with Chris Morace of Jive Software about sentiment analysis and the Radian6 acquisition:
Editor's Note: Watch additional segments of our interview Alex Dayon:
- Enterprise Collaboration: Salesforce Says Emulate Facebook, Integrate Deeply
- Chatter vs. Yammer? You Miss the Point
Social Media Monitoring
Understanding the value proposition of social media engagement is critical. The online experience is no longer just about the website, which means basic analytics like traffic and number of visitors, while still important, are not necessarily the critical measurements organizations need to know if they are doing things right (or wrong).
Radian6 offers both a monitoring platform and an engagement platform, both of which will likely fit nicely into Salesforce products. Salesforce has outlined the planned integrations:
- Sales and Service Clouds: Both support and sales teams within organizations will have real-time social intelligence at their fingertips.
- Chatter: The integration will provide Chatter customers with not only important information about activity within their company, but also information on activity in public social networks like Facebook and Twitter and blogging platforms.
- Force.com: Force.com is Salesforce's development platform, which means the integration of Radian6 will provide developers with access to social media monitoring and engagement capabilities which they will be able to build into their applications.
The deal, which isn't expected to be final until July 31, 2011, is for US$ 276 million in cash and US$ 50 million in stock. Along with that, roughly US$ 10 million in stock and US$ 4million in cash will be issued to the founders over two years (subject to vesting conditions).
While the acquisition isn't expected to have any effected on Salesforce's Q1 results, quarter 2 and the entire year's results will be positively effected with the addition of Radian6 revenues.
With Radian6, salesforce.com is gaining the technology and market leader in social media monitoring," said Marc Benioff, chairman and CEO, salesforce.com. "We see this as a huge opportunity. Not only will this acquisition accelerate our growth, it will extend the value of all of our offerings."
There isn't much information on what will happen with Radian6 outside of the Salesforce integrations. Will it still operate as a separate platform that customers can use outside of Salesforce? Radian6 currently has some pretty big name clients, many of whom may not be using Salesforce.com.
Lauren McKay from DestinationCRM.com discussed the acquisition from the Radian6 point of view. In her article Chris Ramsey, the vice president of business development at Radian6, said this integration has been in the works for the last year. "We've been out talking to customers about this in the market and everyone was asking, 'How do we get this integrated into our overall CRM platform?' " he says. "Ultimately, that's where it’s headed in the enterprise." He also indicated that it was the first of many CRM integrations, so that may be our cue that it will continue to operate independently.
There's also nothing being said about how this acquisition may affect Seemic, a similar platform particularity in the social engagement. Salesforce gave Seesmic, US$ 4 million in funding to help it move to an enterprise level solution in April of last year.
Salesforce Cloud 3
Marc Benioff, CEO of Salesforce.com, has talked a lot of about the next wave for cloud computing, what he calls Cloud 2. Back in April, when Benoiff announced enhancements to Chatter, he said this:
We are in the era of Cloud 2, where social networking use has surpassed e-mail, Facebook and YouTube use have outpaced search, and new mobile devices like the iPad are creating entirely new ways to interact with information."
The company is now in the era of what they call the Service Cloud 3. This acquisition of Radian6 clearly demonstrates this next step will help Salesforce get to the new Customer Engagement goals faster. Will this become Social CRM at its finest? They certainly are trying.