There’s been much speculation for the past couple of years that Salesforce.com would buy Eloqua, Marketo, or some other marketing automation (MA) vendor to shore up a weak spot in its product line.
Well, Eloqua was bought by Oracle and Marketo just went public. Today Salesforce.com finally made its move, announcing that it will acquire marketing software firm ExactTarget in a deal valued at about $2.5 billion, more than a 50% premium. Rumor has it that Benioff had to compete hard to get the deal, and my bet is that SAP was the other contender.
$2.5 billion is a huge deal compared to Marketo’s market value, so the only conclusion I can reach is that Benioff had something bigger in mind — entering the B2C space! This is something Salesforce.com has tried in customer service and largely come up short. But customer service is not really the “DNA” of Salesforce.com.
With this deal Salesforce.com picks up 6,000 customers, and some good mid-market B2B MA technology (from an earlier acquisition of Pardot) according to CRM analyst Rebecca Wetteman of Nucleus Research, who likes the move overall. She says that more CRM deals are starting in marketing these days, so having a stronger offering there could help Salesforce.com get a foot in the door when SFA is not the first priority.
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Independent MA consultant/analyst David Raab also reacted positively to the news. He notes: “Mass email has been missing for [Salesforce.com] and is still a very important medium for their core customer base of CRM users. They also get a toehold in B2C and a solid B2B marketing automation (Pardot) as added value.”
My take is this will help Salesforce.com do battle with Oracle in the coming years, as marketing and sales integration becomes a higher priority. This trend, which some call Revenue Performance Management, requires an end-to-end approach for optimizing the prospect-to-deal process. Wetteman says their research has found “80% of potential CRM returns are unrealized due to lack of integration.”
Why is this CRM 2.0? Because this all singing, all dancing solution is what CRM was supposed to be in the days when Siebel was king. But after that phase ended (with Oracle’s acquisition of Siebel), the marketing tech industry has gone its own way. Unica prospered and eventually went to IBM. Eloqua pioneered B2B marketing in the cloud, which grew into an important segment with Marketo and many others, before Oracle made Eloqua an offer it couldn’t refuse.
What’s different this time around (aside from the cloud) is social marketing, where both Salesforce.com and Oracle have made acquisitions in the past couple of years. So the stage is set for an all out war between Salesforce.com and Oracle. The loser, for now at least, is SAP.
- My Take: Salesforce Acquires ExactTarget, Continues Marketing Automation Industry Consolidation (David Raab)
- What’s next for the Marketing Automation industry?
- Oracle Buys Eloqua: Winners and Losers for B2B Marketing Automation (David Raab)
- Revenue Performance Management (RPM): Strategy, Technology or the Real CRM 2.0?