Oracle just announced it has bought Chicago-based Configure, Price and Quote (CPQ) provider BigMachines in a move that will greatly enhance its cloud-based sales functionality. While the details of the deal were not disclosed, some sources suggest Oracle could have paid more than $400 million.
CPQ software automates the sales process by providing order processing with guided selling, workflow approval processes on the cloud, and making those processes accessible on mobile devices.
In short, CPQs cut through paperwork and complications that accompany many deals and offers enterprises the ability to streamline the selling process. Ultimately, the aim is to provide a better customer experience for clients and better sales conversion rates.
But why would Oracle be interested in BigMachines? Oracle noted that the acquisition will give it cloud-based, end-to-end sales automation capabilities, said Thomas Kurian, Oracle VP.
The fundamental goals of smarter selling are to provide sales teams with the information, access and insights they need to maximize revenue opportunities and execute on all phases of the sales cycle. By adding BigMachines’ CPQ Cloud to the Oracle Cloud, companies will be able to drive more revenue and increase customer satisfaction with a seamlessly integrated process across marketing and sales, pricing and quoting, and fulfillment and service."
However, there a number of other reasons, not least of which is the fact that CPQ is becoming one of the really‘hot’ areas of Customer Relationship Management according to Gartner research earlier this year.
It also underlines Oracle’s commitment to the cloud and moving as many different products to the cloud as possible. Oracle is better known for its on-premises applications, but has been steadily moving towards the cloud in recent years, with enterprise cloud computing a major plank of its business strategy.
There is also the Salesforce dimension to the deal. With this acquisition it gets not only a set of confirmed cloud-based CPQ technologies, but all the expertise that comes with BigMachines and all of its customers, many of whom are also customers of Salesforce.com too.
Currently, BigMachines has a number of really big corporations on its books like Coca-Cola and Siemens, but its software can also be used by small companies, particularly its lower-end product called BigMachines Express, which is built on the Force.com platform.
Salesforce has been eating away at Oracle’s Seibel customer based for some time and Oracle has been hitting back. At the end of last year it bought Salesforce.com partner Eloqua for $871 million, which gave it access to many Salesforce.com customers. This deal is expected to give it even more traction with Salesforce customers.
Finally, while neither company has said exactly how much Oracle paid, Business Insider, citing sources close to the deal, reports it was over $400 million. According to the source, Oracle paid about five times the company’s revenue, which was on track to hit $100 million for this year.
Oracle said that it will integrate BigMachines CPQ with its marketing, sales, social and service clouds. The deal is due to close by the end of the year.