Oracle Buys Eloqua: Providing a Comprehensive Customer Experience Cloud
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Oracle (NYSE: ORCL) announced that it has entered into an agreement to acquire Eloqua (NASDAQ: ELOQ), a leading provider of cloud-based marketing automation and revenue performance management software for $23.50 per share or approximately $871 million, net of Eloqua’s cash. That's about a 30% premium off of Eloqua's closing price on the Nasdaq on December 19.
Companies like Oracle and SAP keep gobbling up cloud-based software solutions for their clients so that those clients will have fewer reasons to ever leave them. Oracle positions the deal as a comprehensive customer experience cloud that enables business to create an integrated, end-to-end process of marketing, sales, service, and support.
Rob Brosnan, senior analyst at Forrester Research, shares his take on the deal that has larger ramifications for the future of all customer relationship marketers and marketing vendors:
- For marketers: comprehensive, real-time relationship marketing is the new black. Avoid the temptation is to see this deal as validation of only B2B marketing automation. Beyond industry verticals or business models, the larger import is the future evolution of all marketing towards more campaign automation, more engagement, and more algorithmically-driven customer dialogue. In essence, expect a future convergence between the techniques of B2B and the scale of B2C. Call it programmatic marketing or customer decision management. Indeed Oracle does not define the deal narrowly as B2B. It sees growth potential in a diversity of industry verticals and business models, such as entertainment, financial services, and consumer manufacturing. The deal doesn’t get Oracle all the way there, but it does give them a scalable, SaaS-based automation platform that will be critical for addressing customers in an era of lengthening paths to purchase, ubiquitous connectivity, and intense post-purchase engagement.
- For Oracle and Eloqua: nice work if you can get it. The $871 million deal is eye-popping given Eloqua’s $90 million in annual revenue, but at Oracle’s level, the cost hardly matters. Eloqua’s puts more muscle behind Oracle’s vision to become a force in SaaS. As important, it gives the company a do-over, i.e., an opportunity to pivot from past marketing tech offerings – like the primarily on-premise and left-to-seed Siebel. Marketers actively chose Eloqua for its capabilities as much as for the freedom it offers from IT. Let’s hope that Oracle doesn’t bury Eloqua under an IT-focused sales strategy, or position it only against Salesforce.com. Indeed, let’s hope that Oracle seizes the possibilities inherent in digital disruption and uses it to cannibalize Siebel Marketing. This deal could make Oracle a real force in modern marketing by enabling its customers to deliver better relationship marketing programs faster than the old technology could.
- For Eloqua’s customers and prospects: prepare for a fork in the road. Eloqua customers will obviously worry about continued support for salesforce.com integration – Oracle’s protestations aside – but just as much, they should worry about native enhancements. Oracle will move to strengthen Eloqua’s offering through cross-selling its portfolio, in areas like social marketing, business intelligence, and content management. But a portfolio strategy likely comes at increased cost and complexity for current customers and prospects, many of whom would prefer a single, unified application suite.
- For competitors: go big or go home. This deal makes Microsoft (NASDAQ: MSFT)’s recent acquisition of the relatively unknown MarketingPilot look shortsighted and stingy. With raised stakes, will it make another acquisition to avoid marketing tech obscurity? And what of IBM, which has no real SaaS-based automation offering, or Adobe, a company that has steadfastly resisted CRM offerings? Expect to see these tech titans get hungry for providers like Marketo or Silverpop, or more B2C-focused options like Responsys, ExactTarget and Neolane. Infor and Pega have attractive marketing assets, but would be expensive, have on-premise delivery models, and come with non-marketing-tech baggage.
Why is an an integrated, end-to-end process of marketing, sales, service, and support important?
Because of the 10 types of innovation, the customer experience is one of the most intangible ones, very hard to copy as it is a continuous co-creation between company and customer:
Big data and marketing automation are enablers to create this customer experience as personal and relevant as possible across all channels. As I elaborated in this article on the Business Insider, the Forbes Insights research showed that the immense amount of new digital opportunities and the fragmented Web and assets where organizations can be visible make it a challenge to create consistent and cohesive experiences.
With this deal Oracle and Eloqua will be a step closer to face this challenge.
GLCuccureddu has no positions in the stocks mentioned above. The Motley Fool owns shares of Microsoft and Oracle. Motley Fool newsletter services recommend Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!