Just before the Christmas break, Oracle revealed its pursuit of cloud marketing software specialist Responsys, based on a big $1.5bn cash bid. In the intervening period there has been speculation that this is not a done deal and that a counter offer from SAP (who was reportedly looking at Responsys prior to the Oracle offer) could be on the cards. The Oracle proposal is subject to shareholder approval and the share price has already exceeded the $27 per share figure the Oracle bid is based on. In all likelihood Responsys will be acquired, the question is who will deliver the winning bid.
In previous counter-bid situations with Oracle, SAP has dropped out. Given the growth in the digital marketing sector, other bidders could emerge, such as IBM who is heavily focussed on the digital front office or even ERP house Infor who has built itself via multiple acquisitions. Last year saw a spate of high profile/high valuation marketing automation platform acquisitions (Oracle/Eloqua, Adobe/Neolane, Salesforce.com/ExactTarget– see the HotViews archive here). Responsys is part of this trend to buy into marketing and cloud assets. The proposal will also lead to more attention for high growth cloud marketing automation platform provider Marketo (see here) who has already seen its share price jump.
Cloud-based marketing automation is a growth market because it remains the least developed part of the CRM portfolio. It is coming to the fore now because enterprises are focusing on the customer experience, which is driving the need for more personalisation capabilities and higher levels of sophistication in outbound marketing. It represents an emerging revenue stream for suppliers because it has the potential to be a high value as well as a high volume market and will also help traditional suppliers fill out their cloud and marketing capabilities. The trouble is, cloud-based marketing platform providers have grown because they have been small and agile - these success characteristics could easily be lost when they are acquired by the mega-vendors looking for credibility in new areas. What is clear is that marketing will be a prime focus for competition during 2014.