Will Oracle's Marketing Cloud acquisition unleash a new vendor war?

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Will 2013 see Marketing Cloud wars break out in earnest now that Oracle has splashed out $871 million to snap up Eloqua and go head to head with Salesforce.com, Marketo et al?

Salesforce.com CEO Marc Benioff already spent a large part of 2012 declaring that the Marketing Cloud is the next big thing. Now it seems his former boss Larry Ellison has come to the same conclusion with Oracle making an $871 million swoop on Cloud marketing automation firm Eloqua. 

"Exceptional customer experience starts with knowing your customer's preferences and delivering a highly personalised buying experience," said Joe Payne, Chairman and CEO, Eloqua. "Together with Oracle, we expect to accelerate the pace of the modern marketing revolution and help our customers transform the way they market, sell, support and serve their customers."

Thomas Kurian, Executive Vice President of Oracle Development, added: "Modern marketing practices are driving revenue growth and is a critical area of investment for companies today. Eloqua's leading marketing automation Cloud will become the centrepiece of the Oracle Marketing Cloud."
Eloqua is loss-making, but such is the potential of the marketing automation sector that Oracle is paying a high price for its latest purchase. "We see the marketing and communications department as a big opportunity for many software/BP providers over the next few years as they seek to reduce costs while capitalising on new multi-channel interactions with their end customers," says John O'Brien of research house Techmarketview.
O'Brien sees Eloqua as assisting Oracle's drive to find new revenue streams. "Eloqua should help do just that, fitting well with its existing CRM systems, and expanding into the marketing department," he says. "Oracle now wants to create a ‘customer experience Cloud’, which will offer a 'highly personalised and unified experience across channels, creating brand loyalty through social and online interactions, and growing revenue by driving more qualified leads to sales teams'."
The bigger picture
With Salesforce.com already boasting its own Cloud marketing offering, Infor and Adobe making a play for the space and pureplay Marketo already carving a substantial market presence, this latest takeover seems set to clear the way for full-scale Marketing Cloud wars in 2013.
"The acquisition of Eloqua will add a leading market automation solution to Oracle's strong salesforce automation products and the recently acquired RightNow call centre automation solution," Nomura Equity Research analysts said in a research note.
"We would expect Oracle to continue to make acquisitions in this space, to bolster its Fusion Applications suite and respond to competitive pressure in the applications market from SAP and Salesforce.com."

There are wider implications all round, argues Gavin Heaton at Constellation Research who suggests: "The acquisition has revealed a gap in the Salesforce marketing offering. SAP is nowhere to be seen. And Adobe and IBM can no longer afford to sit on their hands. Oracle has thrown down the gauntlet to the other enterprise software vendors. Who will blink first?"

Salesforce.com's next move

There could be some interesting ramifications for Salesforce.com in the Oracle move. Eloqua is part of the wider Salesforce.com ecosystem and shares many customers with the marketing firm. Heaton notes: "Many Eloqua customers will have made companion investments in Salesforce and will be keen for ongoing reassurance that integration will continue to be supported."

The acquisition by Oracle may lead Salesforce.com to look at acquiring its own more traditional marketing automation alternative rather than maintain its focus on social media marketing which has been the case to date through its purchases of Radian6 and Buddy Media. 

Inevitably attention will also fall on Marketo, whose CEO Phil Fernandez has previously quipped: "If my phone rings one day and Marc [Benioff] says 'It's time', well who knows?".

To date Marketo has carved its own independent path. But the firm is closely tied into the Salesforce.com universe and there will be speculation about potential closer ties between the two providers, if only as a defensive move against Oracle's ambitions. 

The CMO perspective

At the end of the day, the real winner could turn out to be the marketing department, now the focus of so much unaccustomed tussling for attention by vendors.

Constellation Research's Heaton concludes: "Marketers have fallen behind in the technology stakes – suffering under the weight of outmoded marketing models and outflanked by their fast moving, tech savvy, connected customers. This announcement brings yet another level of change and signals a new wave of consolidation and innovation that will challenge marketers in the year ahead.

"On the positive side, the investment in thought leadership and focus on marketing technology coming from the likes of Adobe, IBM and Salesforce is helping to educate and mature the market. This will not only assist CMOs to formulate business cases and justify technology and skills investment through 2015, it also provides fertile opportunity for the marketing automation vendors like Act-On, Hubspot, Marketo and Neolane."

About Stuart Lauchlan


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29th Jan 2013 23:01

The acquisition means the category is maturing, that innovation is heating up, that more money will be poring into the segment, that new and beneficial Darwinian pressures will be brought to bear on the situation for lead management. It's healthy, its invigorating. It will be exciting to watch. 

-- Mike Compeau

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