Oracle’s strategy in the marketing automation space, how this affects the competitive landscape for the peers of both Oracle and Eloqua, and what the wider ecosystem impact of this transaction is set to be
In the future, organizations that successfully embrace the digital space (in addition to traditional channels) to understand their customers’ current and future needs stand a better chance to offer consistent value, superior customer experience and enjoy loyalty. Oracle has been moving fast into this digital space through numerous acquisitions, recently Eloqua, a marketing automation firm. Interestingly over the last 6 years, Oracle has bought more than 70 companies, out of which more than 60% of the companies are in the applications area including companies that help analyse unstructured data. With digital disruptions across customer landscape and business models, Oracle can serve its customers better by building a strong ‘Customer Experience’ platform by adding Eloqua, to its strong salesforce automation products and the recently acquired RightNow callcenter automation solution.
CRM to CEM Evolution: CRM was mainly seen as a marketing system to automate and synchronize the internal functions of marketing, with the recent explosion of interactions across various new channels (social, mobility) that touch customers and the amount of information available, the scope of marketing systems has significantly changed. CRM to CEM evolution will also increase the ‘qualitative and effectiveness’ focus in addition to the earlier focus on ‘quantity and efficiency’. In 2010, when Oracle announced that it had purchased the intellectual assets of Market2lead, it was clear that Oracle was strengthening its offering for the large, demanding marketing operations market. Considering the fact that Siebel already had marketing automation solution for the consumer marketers, Market2lead was set to strengthen Oracles’ B2B focus. From the current 4 CRM flavors from Oracle, Oracle EBS CRM and Oracle Peoplesoft CRM can be deployed if a company already has EBS or Peoplesoft ERP products, alternatively, one can choose Oracle on Demand CRM as a SaaS option or Oracle Siebel CRM as an enterprise option. Oracle EBS CRM and Oracle Peoplesoft CRM don’t seem to be getting much investment and development for future compared to Oracle Siebel CRM.
The SFA industry transformed into a broader CRM industry and now the marketing automation industry will merge into the Customer experience management industry. Salesforce.com, Oracle CRM on demand, SAP sales on demand and few others used to be SFA products only, not many are in the same space now.
IBM and Oracle have positioned their claims with Unica and Eloqua acquisitions respectively and other two large competitors; Adobe and Salesforce.com currently do not have a strong ‘marketing automation’ element in their portfolios.
SAP CRM has targeted their installed base of SAP ERP and also B2B to achieve significant growth but still lags behind in terms of offering a fully featured on-demand CRM solution.
Salesforce.com might have to now look at acquiring a more traditional marketing automation company in addition to its recent acquisitions Radian6 and Buddy Media. The marketing automation industry can expect to see a flurry of acquisitions.
As the market is moving more towards ‘Customer experience’ most of the marketing automation companies such as Marketo, Hubspot, Act-ON, Neolane, Infusionsoft etc might become acquisition targets. Vendors will be forced to develop open integration with other systems as differentiators based on functionality will be hard to sustain( as serious competitors can easily build those features).
With the Oracle acquisition, Eloqua is in a better position to penetrate into the non-tech sector compared to its traditional competitors. Eloqua customers that have made integration investments with SFDC would need reassurances that the integration will continue, if not, they’ll have to look at competing products. Though Marketo has defined its own position in this industry, it is closely linked to the SFDC customer group and could develop closer ties with SFDC.
Impact on the wider ecosystem:
Marketing is more a science than art,this being the mantra of Eloqua and other marketing automation companies, the tech sector also bought into it, whereas the non-tech sector is looking at marketing more as an art, hence making growth difficult in these sectors. Once these aspects come out in the open, the other marketing automation companies’ share price or valuation will have a negative impact, but on a long term basis non-tech sector will understand the importance of the ‘marketing science’ part due to the digital disruption and might embrace marketing technology like the tech sector.
– Pre-digital to post-digital transformation: In the post-digital period, as companies are trying to maintain or improve their position from the pre-digital period, it’s equally important for vendors to maintain or improve their value propositions during this transformation to stay relevant. This means marketing systems need to be integrated across channels (social, mobility, search etc) and have a single view of the customer based on internal and external information, better knowledge management systems, balance between qualitative and quantitative information and much more.
– On-premise vs Cloud: Cloud solutions are witnessing a higher growth rate compared to on-premised solutions, forcing traditional on-premise vendors to embrace Cloud solutions as a new business line, even if it cannibalizes a portion of the traditional revenue streams.
– East meets West: Leading companies from the west are entering high-growth markets in order to capitalize on market potential and growth rate. Marketing automation, as part of ‘Customer Experience’ solutions can help these companies enable employees in local markets, instead of slowing them down through control mechanisms in traditional systems.
– Existing customers: Considering the current integration between salesforce.com and Eloqua that some customers use, Oracles’ acquisition of Eloqua needs to have a delicate balance between collaboration and competition with Salesforce.com
– CMO perspective: With all this interest of technology vendors in the marketing or customer experience area, the biggest beneficiary could turn out to be the marketing department and in turn the CXOs as it only increases their ‘insight’ into the market. Insight along with intellect is key for innovation. Leading organizations have already spotted cutting edge marketing technology solutions and are creating technology COE’s within their marketing department or marketing COE’s within their IT department depending on the industry and impact of technology on their business. We can expect considerable amount of investment from marketing solution vendors to educate, build business-cases and mature the market, which could only make it easier for CMO’s to get more budgets for technology investments. 2013 will witness a push towards acquiring better marketing technology and also trigger enterprise wide programs to integrate various customer facing & internal systems in order to give a unified and consistent customer experience. Data integration programs across offline/online, first, second, third party customer data would be critical to increase the relevance of marketing programs and ROMI(Return on Marketing Investment). Data protection laws and hurdles from internal legal department might slow-down some data integration programs.