Oracle's $1.5B Responsys Deal Counters Salesforce, Adobe
Oracle's proposed $1.5 billion acquisition of Responsys will give the enterprise application maker more capabilities around cloud-based sales and marketing software as it competes with the likes of Salesforce.com, SAP, Microsoft and Adobe.
The move, announced Dec. 20, will bolster Oracle's strength in the business-to-customer (B2C) part of the space, and comes a year after the software giant bought Eloqua—which brought its expertise in business-to-business (B2B)—for $871 million.
The Responsys deal is part of a land grab of sorts by cloud software providers to bolster their marketing offerings. Gerry Brown, senior analyst at Ovum, said in a research report that Responsys had been rumored to have been in play for a while, with Adobe—which shared 100 joint customers with Responsys—reportedly having some interest.
However, Adobe opted instead for Neolane in June. Salesforce.com also took at look at Responsys, but bought ExactTarget in June for $2.5 billion. SAP also was rumored to be interested in Reponsys in November. Now it will be part of Oracle, which is trying to gain more traction in the cloud space.
Company officials said Responsys' technology will become part of Oracle's Customer Experience Cloud, which touches everything from commerce, sales and service to the Oracle Marketing Cloud. The combination of Responsys products with those inherited via the Eloqua acquisition will enable chief marketing officers (CMOs) to have a single cloud platform that can support both their B2B and business-to-consumer (B2C) efforts.
"Recognizing the unique needs of the CMO in B2B and B2C industries, the Oracle Marketing Cloud is now the only platform to unite enterprise-class leaders in these historically distinct marketing-automation fields," Oracle President Mark Hurd said in a statement. "Our strategy of combining the leaders across complementary technologies signifies Oracle's overwhelming commitment to winning and serving the CMO better than any other software company in the world."
The deal is expected to close in the first half of 2014. Responsys' board of directors has approved the acquisition. Responsys CEO Dan Springer said his company would be a good fit with Oracle.
"Responsys has always been focused on helping marketers realize their largest opportunity—coordinating their marketing touch points across channels, across the customer lifecycle, and across industries, and as a part of Oracle, we will only accelerate our efforts," Springer said in a statement. "Oracle not only shares our vision, but is the proven leader in bringing together best-in-class technologies and companies to realize the largest enterprise opportunities. We couldn't be more excited about what this means for our customers and employees."
Ovum's Brown was lukewarm on the deal. Responsys does some things well—in particular, make money, which many software-as-a-service (SaaS) providers find difficult to do. He called Responsys a well-managed company with a strong message for large retailers and consumer goods companies.
"Responsys can certainly 'talk the marketing talk,' which Oracle has struggled with in the past," he wrote.
However, the company has had trouble growing its business and hasn't bought many other companies to add to its product portfolio, Brown said. "So its organic product development proposition is stretched."
For Oracle, the deal has some advantages. It offsets what Salesforce.com, Adobe and others have done in this market. However, there is a lot of overlap with what Eloqua does, Brown wrote.
"A lot of Responsys' product functionality is already contained in Eloqua's … products," the analyst said. "Oracle's claim to now be the only vendor to offer both B2C and B2B marketing automation is ambitious. Responsys would never turn their backs on a B2B customer, nor would Eloqua turn their backs on a B2C customer. The technology is very similar, but the emphasis is slightly different. Responsys' marketing-oriented services capability is interesting to have, but Oracle already has great data-integration capabilities."
Oracle customers will see some benefit from the Responsys deal, but the Eloqua acquisition a year ago was much more important.
"It does give Oracle customers a bit more marketing automation software to choose from," Brown wrote. "Oracle's really big move was this time last year when it bought Eloqua. The Responsys acquisition was likely brought on to please financial markets with the message that Oracle has not lost its acquisition mojo, and to counter or thwart competition, rather than to gain a significant piece of new technology."