Oracle buys RightNow, sends memo to Salesforce.com

Oracle buys RightNow, sends memo to Salesforce.com

Summary: Did Oracle buy RightNow to show Salesforce.com who really is the Silicon Valley big dog?

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Tongues are already wagging about how Oracle is buying up the cloud:

Oracle is rounding up the SaaS old guard. Salesforce.com is aligning itself with the next generation.

I think this comes back to my philosophical debate between Oracle and Salesforce.com. It follows on from the shenanigans at Oracle Open World when Oracle canned Marc Benioff, CEO Salesforce.com's planned keynote. Readers may remember that Benioff used the occasion to home in on the differences between the positions of each company.

Today we see Oracle's response. The memo might as well have read:

From; Larry Ellison, CEO Oracle

To: Marc Benioff, CEO Salesforce.com

Subject: Acquisition of RightNow

Dear Marc

Don't mess with me. That was chump change

Yours affectionately

Larry

The response might read like this:

From; Marc Benioff, CEO Salesforce.com

To: Larry Ellison, CEO Oracle

Subject: Acquisition of RightNow

Dear Larry

I guess after six years' development, Fusion for the cloud isn't quite what you thought it might be, huh?

Yours as ever

Marc

PS - dont' forget to listen in on the earnings call

RightNow has been hawked around for more than two years. The understood asking price was $2 billion. What has changed in the last few weeks? The only explanations that make sense are as follows:

  1. Fusion in the Cloud is a non-starter as things stand today and Oracle knows it.
  2. Oracle was genuinely stung by Salesforce.com's proposed pitch and response at OpenWorld and so bought out the only obvious player in an area where Salesforce.com is weak and which would provide Oracle with a publicly cloudy entrée. Much will be made of RightNow's technology underpinning. From Phil Wainewright:

The choice of RightNow sends further signals about the kind of cloud vendor Oracle will prefer to acquire. Over the years, RightNow has had more than a few critics of its SaaS model, which has been much closer to Oracle’s notion of hosting customers in clustered ‘pods’ of servers than more purist definitions of multi-tenancy (of which there are many). RightNow’s variety of SaaS model is more prevalent than you’d believe from listening to the hype that comes from the industry. There are large numbers of vendors with similar architectures, and it’s a tough path they’ve chosen. As time goes on, I suspect they’ll find it harder and harder to compete against more technologically and economically agile vendors that more effectively leverage true cloud architectures.

That won't matter to Oracle as it can engineer its way around those problems - if it chooses. But it will be building up a rats nest of integration problems. It serves up the prospect of a technology war where the proofs will be in the success with which each company is able to lay claim to technical superiority. While this won't matter to mid sized businesses, it will be a genuine battleground where cloud apps get IT departmental attention.

As for the future? the smart money says NetSuite is the next domino to fall, despite the fact the company is adamant it does not want to be acquired. At least for now. The fact is that Ellison is the majority shareholder on NetSuite and can take it down any time he choses. If that happens then a whole new range of scenarios open up, not least a head to head with SAP Business ByDesign.

Topics: Enterprise Software, Oracle

Dennis Howlett

About Dennis Howlett

Dennis Howlett is a 40 year veteran in enterprise IT, working with companies large and small across many industries. He endeavors to inform buyers in a no-nonsense manner and spares no vendor that comes under his microscope.

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9 comments
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  • RE: Oracle buys RightNow, sends memo to Salesforce.com

    Greetings Dennis:

    What particular areas in eService do you believe that Salesforce is weak and what has has contributed to your conclusion?
    cvancourt
    • SF Weakness

      @cvancourt I have implemented both for enterprise clients and salesforce is weak in a couple of fundamental areas compared to RightNow:

      -Case routing and workload management - you can assign a case to a queue, but there is no functionality to manage the distribution from the queue to sets of agents. Most companies dont like agents 'cherry picking', RightNow has food options for round robin routing, or routing based on workload of people, push and pull options etc. SF doesn't as standard, and it is fundamental functionality in a call centre environment

      2. Salesforce does not come with decent knowledgebase functionality as standard, that costs extra. RightNow has a major strength here, and comes as standard with superb internal and web-facing functionality here. Very fast to setup also.

      There are a few other areas. Generally salesforce have missed some fundamentals and concentrated more on bells and whistles, like social media integration where they have quite a half hearted attempt out of the box with limitations (ie limits on number of twitter accounts that can be monitored, equally for Facebook pages)

      That is a flavour anyway, so I can see why RightNow would be preferable in some contexts for customers. Obviously salesforce has its own set of advantages around the extensibility of the platform etc, depends what the customer needs.
      nezproc2
      • RE: Oracle buys RightNow, sends memo to Salesforce.com

        @nezproc2 Thanks for sharing your perspective on that. It would be great to also see what Dennis and others think.
        cvancourt
  • RE: Oracle buys RightNow, sends memo to Salesforce.com

    > That won???t matter to Oracle as it can engineer its way around those problems

    Maybe Oracle's biggest flaw is its ability to engineer away problems after creating them. Good cloud players design them out before they start.
    philwainewright
  • RE: Oracle buys RightNow, sends memo to Salesforce.com

    By buying Rightnow they really are saying they have nothing better in there suite of products.
    This should be an advertising campaign for Salesforce.

    The only way that Oracle wins is to buy Salesforce. It seems logical. They are a major customer of them anyway. Marc Benioff would settle back into Oracle and they could be one big happy familly again.
    jack@...
  • RE: Oracle buys RightNow, sends memo to Salesforce.com

    I'm not familiar with RightNow but worked with SFDC and Oracle's CRM On Demand.

    My question is how the acquisition of the RightNow impact Oracle's CRM On Demand (CRMOD) platform that competes head to head with SFDC.

    With CRMOD, Oracle already has call center capability (Contact On Demand) and recently purchased Inquira, a KM and self service portal addon (http://www.oracle.com/us/corporate/press/444382).

    Can we expect any integration of the RightNow platform into CRMOD?
    turkey123
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