• May 4, 2016
  • Oracle has done many things right over the last few years. Ever since Larry Ellison’s disastrous pronouncements disparaging cloud computing at the Churchill Club, the company has worked assiduously to become a cloud company and the results were on display at last week’s Oracle CX Summit in Las Vegas.

    Beginning a few years ago, Oracle made a strategic decision to get out of the one-upmanship of competing with Salesforce for CRM ideological purity. That’s a waste of time and I am glad the boxers have moved to neutral corners. Oracle’s decision was to approach the front office through customer experience and so its branding is all about CX whether for sales, marketing, or service.

    I like CX but like CRM it requires better definition for today. As business moves from transaction to process it’s not just any customer experience it’s the customer’s experience of a process, a moment of truth. In CRM-land they talk about systems of intelligence which doesn’t exactly land the aircraft so messaging is still a critical need all over.

    Next, the company went on a buying binge acquiring many modern cloud companies under the capable leadership of Anthony Lye. Those acquisitions plus some important platform development and integration work have yielded the CX suite we saw last week. All indications are that the customer base is adopting Oracle cloud computing at a good clip even as many wonder aloud about things like security.

    Oracle is not alone in this. I was at the SAS Global Forum a week before (also in Las Vegas) and cloud concerns were prevalent there as well. All I can say is that customer concerns are a good indication of incipient change. Nobody likes change and when people are vocalizing their concerns it’s a sure indication that change is in the wind.

    So to summarize, Oracle has built a respectable suite of functionality that competes well for enterprise and smaller business in the front office. In Las Vegas I saw company executives, customers, and partners discussing the product road map and field success and it all seemed pretty good.

    At this point I’d say the job is half complete—that’s not a bad thing but a reality. The next parts of the transition include business process orientation and dealing with financial realities and each has roots in how the company talks about itself—its messaging.

    Oracle is being very aggressive in industry specific CRM which is much about how to support business processes for verticals like finance and healthcare. They are not alone and industry CRM is one of the key battlegrounds for CRM going forward. Salesforce is putting significant wood behind that arrow as are several startups most notably, Vlocity headed by David Schmaier formerly the number two executive at Siebel and the driving force behind Siebel’s industry strategy which is now part of Oracle.

    In finance, as I’ve mentioned elsewhere Oracle is enduring an Innovator’s Dilemma moment as it transitions from lucrative software licensing to cloud subscriptions. Ironically as the company continues to succeed at turning over its customer base to the cloud, its earnings may suffer in comparison with the on-prem business. There’s not much to do about this other than to get through it and adapt to the new reality.

    This brings us to messaging. Much, but not all, of the messaging and presentation to analysts reflected an older Oracle and that will continue to evolve. The presentations I witnessed were heavy on technology and too light for my taste on the so-what, which simply means that customers need more than speeds and feeds to make important decisions about moving to the cloud. But the Oracle culture I witnessed still focuses on selling technology rather than business results.

    When integration partners discussed customer success, too often they limited their praise to a rapid deployment that was on time and budget. However, it was mind boggling that they were reluctant to give concrete assessments of the post implementation. Most didn’t name customers instead referring to “a company” in a particular market. It might still be early days for this though when customers got their turn on a panel, Oracle was able to present real people talking about their successes and they ranged from a specialty retailer, Elaine Turner, to very large enterprises including PSA, the company that owns Peugeot and Citroen, and Denon + Marantz Electronics.

    Being in a transition state as Oracle is, is not entirely a bad thing. The company is in a delicate dance where it wants to demonstrate concrete commitment to loyal customers who are not ready to migrate for various reasons, while selling the vision of what’s shiny, new, and modern. Other vendors are in a similar box but I have to say that Oracle has done a good job of trying to bring everyone along.

    So at this stage I’d say that Oracle is in a Goldilocks moment—not too hot or cold. They’re trying to steer a middle course between old and new and they’re doing a pretty good job of it. The biggest hurdle right now may be the financial markets’ expectations but then again, those markets have had nearly two decades to understand the migration pattern.

    Published: 8 years ago

    We are nearing year-end and that means it’s time for my annual year in review.  This is not an attempt at a quantitative inventory just my assessment of things that happened that will matter in the long run.  From my spot it looks like marketing took a big step towards greater relevance in 2013, the importance of being a partner in an ecosystem increased as did the significance of software platforms, and reports of CRM’s demise were greatly exaggerated.


    It’s not just the fact that Oracle bought Eloqua that made marketing significant and the price reportedly paid, $800 million, still seems light to me.  Marketo had a successful IPO, Microsoft bought Net Breeze and Marketing Pilot, and Salesforce.com declared its Marketing Cloud.  In 2013 marketing was definitely on the agenda.  It also helped that all of the above mentioned companies did something revolutionary for them.

    Instead of killing their new acquisitions by trying too hard to fit them into the corporate portfolio, the big buyers of 2013 let their new acquisitions figure things out for themselves.  You could argue that bringing marketing expertise into some of these companies increased their MQ (marketing IQ) significantly and that they had no choice but to let the experts run things for a bit.  The buyers didn’t have much clue in some cases and were more or less forced into it.

    The approach worked so well that by fall marketers had firm control of their agendas and were leveraging their new companies’ considerable resources to go to war.  The best example was the Eloqua Experience user meeting held in San Francisco that attracted a crowd of “modern marketers” sufficient to fill the Hilton Hotel to overflow.  Today, Oracle seems to be one of Eloqua’s biggest customers and you can sense it in their go to market approaches.  Kudos to Marc Organ, Thor Johnson et al who got the ball rolling ten or so years ago but who were not involved any more by time the big payday came.

    The Partners

    The traditional partner channel got an upgrade too.  Typically, moving to a channel strategy is a great idea for maturing companies that want to reduce overhead by getting someone else to sell for them.  Older products under price pressure and margin erosion are frequently what partners get but in 2013 that was less obvious.

    The leader in the new channel was Salesforce whose partners leverage the core platform to build an impressive array of new products in all areas of the front office and beyond, rather than just adding a little implementation value and customization to an established product.  Salesforce’s channel strategy is unlike almost any other.  Everybody wins.  Salesforce has a greatly expanded sales team selling its product and the partners have a well-defined platform and source of raw material on which to build.  Everybody wins in this scenario, which is why item three on my list is platform.

    Also in the partner bucket, Sage decided to simplify its portfolio by selling SalesLogix and ACT! so that it can concentrate on selling SageCRM.com.  It’s a good idea but this traditional ERP company still has to prove it understands the CRM market beyond cross-selling it to its accounting customers.


    Partners and platform reached a crescendo at Dreamforce when Salesforce introduced Salesforce1 calling it a “customer platform” that incorporates Force.com, Heroku, all of CRM, ExactTarget Fuel, and some other bits.  Whether you are a partner or an enterprise looking for a Swiss Army knife software tool, Salesforce1 might be what you are looking for.  The company went into hyper drive and developed an order of magnitude more APIs that brought it all together so that older apps could peacefully co-exist with newer stuff from all of its acquisitions in a single entity that it hopes will drive enterprise computing for many years.

    Salesforce is not the only player in the platform space but they’ve typically given themselves a year grace while the rest of the market catches up.  Look for Oracle, Microsoft, and SAP to be all over platform in 2014 like white on rice, like a cheap suit, like a junkyard dog, but I don’t want to over state the issue.

    CRM’s Demise

    People have been calling CRM’s demise or at least its radical restructuring since the Clinton administration and they’ve been right but it’s still here.  In a late 2013 report, Bluewolf, the consulting group, was at it again.  This time, in the company’s second annual survey of the Salesforce customer base, it found that many customers think community will be the new or next CRM.  I think this has a lot of validity but…aren’t we already there?  To a degree we are and most market observers would, I think, agree that the traditional silos are being rapidly bridged by social to enable greater and more instantaneous information sharing throughout the enterprise.

    Nonetheless, the importance of the Bluewolf study is not to state the obvious, it is to put a marker down saying watch what happens from here.  As the front office continues to socialize you will see more new apps and sectors with increasing benefits.

    Siebel at 20

    It would be wrong to end without a tip of the hat to Siebel.  Bruce Daley pointed out to me that Siebel turned 20 over the summer and to celebrate he re-launched the Siebel Observer to deliver insights on the company and the market on a frequent basis.  Siebel is important for multiple reasons.  It is the grand daddy of the industry and many of CRM’s brightest stars got their starts there and are now populating numerous other companies and I am happy to say many are friends.  Siebel is on a very short list of companies that matter in CRM’s history along with Salesforce and Oracle—Tom, Marc, Craig, Zach, Bruce and many others all came from there and were Larry’s protégés.  If you have followed them for any amount of time, last names are superfluous.

    There were many other highlights during the year and others will no doubt offer their analyses and insights but for me, it’s it and that’s that.


    Published: 10 years ago


    Salesforce CEO, Marc Benioff

    Holy moly Salesforce announced they were buying ExactTarget for a cool $2.5 billion this morning.  The deal will do much to complete CEO Marc Benioff’s vision of a MarketingCloud to go along with the SalesCloud and ServiceCloud of the company’s core CRM suite.

    Some would say the Salesforce and the entire CRM suite vendor corps have been late to the market in developing a robust marketing solution and I would be one of them.  However, it needs to be said that the vendor community played things well by a lot of measures.

    For the last five years with a depressed economy it was natural to concentrate on service since the name of the game in a slowdown is to protect your core business.  That’s what a lot of CRM vendors did, they beefed up their service and support offerings building in elaborate social architectures that enable their customers to service their customers effectively and at lower costs than previous modalities.

    Fast forward to this year and the economy is picking up steam and that means a more traditional approach to gaining new customers and an emphasis on sales and marketing.  Sales we know had been the bread and butter of CRM so it was logical for the vendor community to go after marketing.

    For years, marketing has languished as the largely independent stepchild of CRM.  Marketing is widely acknowledged to be CRM but its business processes are very different from service and sales and for that reason many vendors always put off building robust marketing functionality into their CRM suites.

    Instead, marketing has remained independent with companies like Eloqua and Marketo running their own shows.  But Eloqua was recently bought by Oracle and Marketo had an IPO just a few weeks ago, Pardot was bought by ExactTarget, which I think made the acquisition much more attractive for Salesforce.

    However, I see some yellow flags waving on this deal.  First off, $2.5 billion bucks can buy a lot of development talent (and a good weekend in Vegas).  This is an expensive deal and I wonder why Salesforce didn’t want to build the solution itself.  They seem to prefer buying over building these days and while I can understand buying for strategic reasons, I have a hard time when I see making a purchase as the default position.  And, speaking of acquisitions, the buzz around the industry I had been hearing was about how long Salesforce would let Marketo wander around without taking them off the street.  Guess we know now.

    Secondly, there appears to be a fair amount of overlap between ExactTarget and Salesforce especially in the analytics arena.  If you back the analytics components out of the deal, then you have to ask how much more development there would have been to build something that was Salesforce native.

    None of that matters now; the deal is done and except for the price tag (I am a flinty, tight fisted New Englander after all) there is a lot to like about the combination.  Instantly Salesforce gets 6000 ExactTarget customers but then again many of them are already Salesforce customers too.  The combination also comes with serious marketing chops given that Gartner gave ExactTarget high marks in its recent Magic Quadrant.

    I think the companies this affects most are SAP, Microsoft and Sage — add in NetSuite too.  With Eloqua and now ExactTarget in enemy encampments there are fewer marketing options for these companies.  This could make Marketo the bell of the ball for these vendors though right now Marketo is well tuned to being in the Salesforce ecosystem but it is not exclusive to be sure.  So maybe Marketo walks out of this with a clearer landscape and more market power.

    At any rate, it will take a few months for the dust to settle but ExactTarget is already in the market and executing with Salesforce customers so for the most part it’s game on.


    Published: 11 years ago

    It’s been wonderful this spring being a part of all the vendor briefings now in high gear because in short but sometimes painfully dense bursts we get to know what each vendor has in store for the months ahead.  It’s a lot and that’s a good sign.  There seems to be a breakout happening.

    One of the themes running through all the events like a kid on a tricycle is marketing.  Everywhere you look marketing is making noise.  Oracle completed the acquisition of Eloqua, Marketo filed for an IPO, Salesforce is putting significant resources behind its Marketing Cloud and, most importantly, marketers are in the ascent.

    SiriusDecisions, an analyst firm, is holding a conclave this week in which it is discussing its new marketing waterfall methodology and marketers as well as associated vendors like Lattice-Engines and Full Circle CRM, just to pick two, are sending contingents to the event to see and be seen and to soak up the new marketing vibe.

    Closer to home, I am attending HubSpot’s second (?) annual analyst day at its Cambridge offices.  HubSpot became an early darling of the new marketing movement a few years ago when it turned marketing on its head and said, no, no, no, try this — which turned into inbound marketing — and was very successful.

    Generally, when marketing kicks it up a notch, as it is doing now, there are a couple economic possibilities.  Either we’re entering a new market/category/paradigm or the economy is showing signs of life after a recession and I think it’s possible both are happening right now.  The recession is slowly ending and marketing as a discipline is the new paradigm.

    In fact, and this is most interesting, the marketing upsurge started at the depths of the recession when austerity was big news and almost nothing was getting traction.  But it was almost as if the crowd said no, we don’t buy it, let’s get the economy moving again.  Let’s go on offense, let’s start marketing and selling again and we’ll spend some money to make it happen.

    Here’s where economics imitates life — a couple of weeks ago, the economic ideas underpinning the austerity argument, which has devastated Europe and made the sequester in DC a bad word, fell apart.  Two Harvard economists named Reinhart and Rogoff whose work had led the austerity charge were proved to have made significant spreadsheet errors.  If there was an Oopsie Award they’d win it this year for sure.

    The translation is that the Austerians (as Paul Krugman likes to call them) got it wrong.  The math errors and erroneous assumptions of the Reinhart-Rogoff model were inaccurate and the data did not support their conclusions.  Over night austerity is, if not stinking like a dead fish, at least sitting in the sun and beginning to decompose.

    What’s interesting to me is that the general marketplace began reacting long before the fall of the Reinhart-Rogoff model.  No one needed to be hit over the head with an old tire tool to change directions.  We’re anything but doctrinaire in this country and when something doesn’t work we make little adjustments, regardless of what officials and supposedly smart people tell us.

    That’s the beauty of our free market system.  It’s distributed and as non-hierarchical as you can get it and it works beautifully in a pinch.  In my own mind, I often compare democratic capitalism practices in the West with totalitarian capitalism practiced across the Pacific.

    The Chinese have a great ability to marshal their people and resources to output great quantities of goods but they still operate in a hierarchical, command and control manner.  Democracy and totalitarianism are political systems just as capitalism is an economic one.  Politics and economics have to operate together, you need one of each.

    I could never fathom how totalitarian capitalism could orchestrate the changes I’ve seen this spring.  The very idea of individuals deciding for themselves what to do in a confusing market with a totalitarian political system — even with free market capitalism as the economic model — and breaking away from official thinking is hard to imagine.

    To me that’s part of what CRM captures.  It’s the chaotic and the spontaneous that CRM tries to ride herd on.  Sometimes it works well and at other times it can fail.  But CRM has made important leaps forward.  Like economics and sociology or any of the soft sciences, it has come into its own as it has adopted many of the tools of soft science — the bell curve, crowd sourcing, big data and analysis, and, most of all, probability.  There’s just no way a political-economic system other than what we have in the West could come to the same conclusion.  It would be like asking a fish to invent fire.

    Published: 11 years ago

    That’s it?  Only $810.8 million?  Not even a whole billion?  I would have thought Eloqua would command a higher price, especially with a market cap in the $4-500 million range.  Lots of people are saying nice things about the deal but I ain’t buying it just yet.

    They IPO’d in August at $11.50 per share and raised $90+ million and in the last year had revenues of about $85 million.  So from this perspective the strike price of $23.50 makes some sense.  However, marketing automation is heating up and it’s a good place to hang out a shingle these days so I would have expected more of a premium.

    This leaves Marketo and a bunch of smaller companies in the space and curiously opens up the market quite a bit.  Eloqua is a good Salesforce partner but you have to wonder how much longer that will last given that Larry doesn’t even invite Marc to OpenWorld any more.

    I think Eloqua’s Salesforce business goes in the tank immediately meaning that Oracle might have over paid given Eloqua’s revenue is somewhat dependent on good relations between the two companies’ sales forces.  So look for Marketo to get a lot more interest from Salesforce (as if they don’t have enough?).

    This acquisition clears the field for Salesforce and I could easily see Marc buying Marketo just to make sure he has something in the corral.  If that doesn’t happen, then every SAP and IBM in the world will want Marketo and soon.  Marketo would be a good fit for Salesforce, better than Eloqua in some respects, given the social direction of the Marketing Cloud.

    At this stage Oracle is amassing an impressive string of software solutions that it is attempting to forge into some kind of suite.  But maybe not.  This reminds me that the last couple of years worth of Oracle acquisitions in the front office market resemble another spate of acquisitions the company embarked on in 2004-2005.  It ended up buying such names as PeopleSoft and Siebel and each of those companies had bought up many other companies like J.D. Edwards and Upshot to name just two.   I think of that as the Great Consolidation.  Lately things are looking similar.

    Seven or eight years ago Oracle was chided for becoming the new Computer Associates and it was widely expected to cease all development and enhancement of the products and just collect the maintenance revenue stream.  That didn’t happen, the company pledged to keep the brands going and today they are.  It also promised to build powerful software that would link everything together in one big, happy mass.  The project was supposed to take 3 years but it reached double that before Oracle threw up its hands and declared victory in a parallel universe.

    Fusion is still evolving and the separate applications are, well, separate.  But the focus now seems to be on bringing together RightNow, Siebel, ATG, Eloqua, and the other recently acquired systems under the Fusion umbrella.  Maybe it will work, I dunno.

    For now, Oracle may have stolen first base buying Eloqua.  The marketing market is still hot, Salesforce is committed to big time social marketing, Marketo might be a target purchase for them but that’s not certain.  Sooner or later Oracle needs to put some stories together about how its new applications all work together otherwise the CA rumors will start all over.

    Published: 11 years ago