RightNow Buy Adds Social CRM to Oracle Cloud

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In July, IT Business Edge contributor Mike Vizard wrote that "interestingly enough, Oracle seems content to keep its CRM-as-a-service ambitions limited to the high end of the enterprise IT space," noting that the software giant was stressing integration with other enterprise applications as one of the biggest strengths of its cloud-based CRM. He quoted Oracle's senior vice president for CRM as saying the company would focus its CRM efforts on higher-end enterprise applications that require more functionality from their CRM software.


What a difference a couple of months makes.


As IDG News Service reports, Oracle will spend some $1.5 billion to purchase RightNow Technologies, a provider of cloud-based CRM applications that most recently has been talking up its capabilities in customer experience management. Unlike traditional CRM, with its focus on back-office management of customer data, CEM stresses improving customer-facing communication and providing better service across multiple channels. The IDG piece quotes Constellation Research CEO Ray Wang, who says: "At the fundamental heart of RightNow, it's a customer-service company."


This customer focus marks a fundamental shift in the CRM market, one that some observers are calling social CRM. CRM Essentials co-founder and partner Brent Leary offered one of the best definitions of social CRM I've heard when I interviewed him back in 2009. He said:

When you think of traditional CRM, most of the benefits are felt internally. You get more operational effectiveness, better forecasting, an improved ability to share information with people on your team. But social CRM is totally focused on the wants and needs of the customer.

More recently, folks have begun using the terms social CRM and customer experience management more or less interchangeably. Salesforce.com is apparently hoping to expand its customer base by positioning itself as an early mover in this area. It made a couple key acquisitions, buying social-media monitoring company Radian6 last spring andpurchasing customer service startup Assistly for $50 million last month, and touts the benefits of its own Chatter collaboration tool. (Collaborating with colleagues is viewed as a key to improving customer support and thus is a primary requirement for CEM.)


Salesforce's actions, along with a little Twitter snarkiness between Salesforce CEO Marc Benioff and Oracle CEO Larry Ellison, may have prompted Oracle to make its own CEM acquisitions, speculates InformationWeek's Fritz Nelson. Before announcing its planned purchase of RightNow, Oracle last week bought Endeca, which sells business intelligence and CEM software.


Perhaps Oracle was paying attention last month when Gartner said their ability to better integrate social channels with more traditional customer channels would give big vendors like Oracle, Salesforce and Microsoft an edge over smaller CRM providers.


Most observers are also calling the RightNow acquisition a good fit for Oracle's Public Cloud, which it introduced at Open World earlier this month. Expect Oracle to acquire more software-as-a-service companies in the near future, writes IDC analyst Michael Fauscette for Seeking Alpha. He offers a list of candidates, including ERP provider NetSuite (a company which counts Ellison among its investors), travel and expense management provider Concur, and content sharing/file sync/storage providers Dropbox, Box.net or SugarSync.