--Analysts say deal helps Oracle better compete with
Salesforce.com
--Oracle Cloud now has marketing, sales, service components
--Oracle, Salesforce.com, SAP battling for cloud dominance
(Updates throughout with analyst views)
By Steven D. Jones and Ben Fox Rubin
Oracle Corp. (ORCL) agreed to acquire software company Eloqua
Inc. (ELOQ) for approximately $810 million, as the company
continues to bolster its cloud-based and market-analysis
products.
"Eloqua's leading marketing automation cloud will become the
centerpiece of the Oracle Marketing Cloud and is an important
addition to the Oracle Customer Experience offering," said Thomas
Kurian, executive vice president of Oracle Product Development.
Eloqua, founded in 2000, went public in August. The company
provides software that allows clients to measure the effectiveness
of marketing and sales efforts.
Combined with the recent acquisitions of Taleo, a
human-resources management service, and service manager RightNow,
the Eloqua deal gives Oracle a full suite of cloud-based software
that "should allow Oracle to better compete with Salesforce.com
Inc. (CRM)," said analyst Rick Sherlund of Nomura.
Salesforce.com has rapidly expanded its cloud into all those
areas, helping bolster demand for its core customer-relationship
management software and making it a one-stop shop for companies
seeking ways to integrate marketing, sales and service. Oracle too
has embraced the cloud, but Salesforce.com "continues to have a
strong win rate against Oracle in CRM," said Mr. Sherlund.
With the Eloqua deal, Oracle is doubling down on its bet that
the Oracle Cloud can compete as the No. 3 cloud-service provider
behind Salesforce.com and Germany's SAP AG (SAP), he said.
The acquisition is the latest in a frantic year of deal making
that saw SAP buy Ariba, a manager of online purchasing networks,
Microsoft Corp. (MSFT) buy Yammer, a social marketing company, and
Salesforce.com buy Buddy Media that manages social media ad
campaigns.
Driving the deals is the urgent need to build networks to stream
a broad range of tools to PCs, tablets and smartphones, creating a
virtual data cloud above companies. The market for such services is
growing 24% a year and if a company isn't growing its cloud
services business as fast or faster, it's losing share. Assembling
a suite of fast-growing components is one strategy to accelerate
growth.
Oracle doesn't break out its sales of cloud subscriptions from
its software license revenue. Combined new software license and
subscription revenue grew 17% in its fiscal second quarter ended in
November.
The Eloqua deal "is a do-over in some ways," for Oracle, said
analyst Rob Brosnan of Forrester Research. Oracle purchased Siebel
Systems in 2006 and it has been the heart of its enterprise
marketing software, but it is ill-suited to move to the cloud.
"Eloqua keeps Oracle relevant in a mobile world where
relationship marketing is switching from batching processing to
real time," said Mr. Brosnan.
Oracle offered $23.50 per Eloqua share, a 31% premium over
Wednesday's closing price. In early afternoon trading Thursday,
Eloqua's shares jumped 31% to $23.51. Oracle said the acquisition
was worth about $871 million, net of Eloqua's cash. The deal is
expected to close in the first half of 2013.
Eloqua's software includes tools that allow clients to analyze
interactions on Web pages and social-media networks. Its customers
include Adobe Systems Inc. (ADBE), American Express Co. (AXP), and
VMware Inc. (VMW).
Eloqua has yet to turn a profit.
Oracle was trading down 0.2% at $34.03 one hour before the
close.
Write to Steven D. Jones at steve-d.jones@dowjones.com and Ben
Fox Rubin at ben.rubin@dowjones.com
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