acquires ExactTarget — Is this finally CRM 2.0?


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There’s been much speculation for the past couple of years that 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 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 has tried in customer service and largely come up short. But customer service is not really the “DNA” of

With this deal 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 get a foot in the door when SFA is not the first priority.

Independent MA consultant/analyst David Raab also reacted positively to the news. He notes: “Mass email has been missing for [] 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 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 and Oracle have made acquisitions in the past couple of years. So the stage is set for an all out war between and Oracle. The loser, for now at least, is SAP.

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  1. Well said, Bob. The Oracles / Salesforce competition is always a factor in what both those companies do.

    One note on price: Salesforce paid 8x 2012 revenue for ExactTarget. That’s about what Oracle paid for Eloqua, and much less than Marketo’s 14x multiplier ($800 million market cap on $58 million 2012 revenue). So it doesn’t seem so high.

  2. I was trying to say that Marketo could have been acquired for much less than $2.5 billion. But that would not have opened the door to B2C.

  3. I agree that Salesforce desires to penetrate the B2C market, but I’m not sure acquiring a mass email provider is a particularly strong lead. To complicate things, ExactTarget targets B2C enterprises, while its new subsidiary Pardot targets B2B small businesses. I think they were challenged to rationalize their solutions before, and will be further challenged under the Salesforce banner. I do see the complimentary value of Pardot with Salesforce, but I really scratch my head at a $2.5B price tag.

  4. hasn’t been very successful in B2C customer service, so the same could happen in marketing. Having a product alone is not enough.

    As for rationalizing solutions, has a pretty good track record so far assimilating new companies and solutions. Or so Rebecca Wetteman of Nucleus told me.

    The only way to rationalize the $2.5B price tag is B2C, in my opinion. Apparently the price got bid up due to competition from other potential buyers.


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