It is not in the same league as SAP’s proposed Ariba acquisition (see SAP splashes $4.3bn on Ariba to boost cloud play), but Oracle has also been acquiring this week. With the purchase of cloud-based social marketing platform provider Vitrue it has added another piece of cloud software to its development portfolio, and in the hot social media area too. Vitru’s software helps marketers manage and analyse their businesses presence on social sites like Facebook, Twitter, Google, Pinterest and the rest.
Financial terms were not disclosed but TechCrunch suggests Oracle paid $300m for the company. The extent of Vitrue’s revenues are uncertain and estimates range from way under $100m to a scenario that says it is heading close to $100m in the current year. It has taken up $33m of funding. If the purchase price is correct, the small premium suggests losses at Vitrue are high as is almost universal for SaaS pure plays and no doubt also reflects Oracle boss Larry Ellison’s views (remembering his vested interest of course) that purchase prices are riding too high.
Vitrue’s capabilities will sit well with Oracle’s CRM assets, including Fusion, and particularly with the acquired RightNow suite of customer experience management applications. It will also bolster the Oracle Social Network and help with Oracle’s aim of providing end-to-end coverage in the customer experience area by tapping into multiple applications, a plan it outlined following the RightNow acquisition (see Oracle: completion and plans for RightNow).
It has a tricky balancing act here. As the cloud-based model develops, it calls for loosely coupled applications aimed at specific processes rather than tightly integrated suites (something Salesforce.com does as a matter of course and SAP is planning to do something simiilar under Lars Daalgard). So the issue is how tightly will Oracle bind its offerings together (at the application and middleware level) and to what extent it will encourage third party participation. It talks a lot about openness but it is still too early to see how this will play out. There is also the feeling that in the cloud world currently, it is beneficial to be master of a small number of processes rather than average at many. Oracle’s model is to be master of many. There is a tension here that needs to play out.