Oracle, Endeca and RightNow

Oracle's recent acquisitions may be for two different reasons. Which deal was done to fill a product line hole and which was to acquire an install base?

What's behind the deals Oracle (ORCL) recently announced with Endeca (private) and RightNow (RNOW)?

Here's my quick back of the napkin math regarding these two transactions:

re: the RNOW deal. RightNow is a SaaS CRM provider. This deal will be for $1.5 billion and involve 2000 customers according to Wikipedia and other sources. That works out to $750,000 per customer for a firm that has a lot of mid-market firms as customers.

Note: Oracle already has CRM products it acquired from PeopleSoft (nee Vantive) and Siebel. It also has its e-Business Suite products, too.

Endeca is a big data software firm with a skill set around external data. Wikipedia states that Endeca has about 600 customers. The company will sell for a price of $1.075 billion according to Boston.com. That works out to a price of about $1.8 million per customer.

So what can we tell about these two deals? RNOW may have been bought for the maintenance stream and some add-on sales. Existing RNOW customers should generate $750K/customer over the next few years if they pay maintenance, don't  defect and buy a few licenses to applications like Fusion or e-business suite. Likewise, a few hardware sales to those customers could make the deal accretive even faster.

The Endeca deal was probably a technology/innovation purchase. It plugs a hole in their product line and can be cross-sold to many existing ORCL customers. The potential cross-sell market could be over 100,000 existing customers making this deal accretive quickly.

Just my 2 cents - time will tell which deal drives shareholder value faster.

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