Oracle scoops up Eloqua before holidays
Just before we went on break, Oracle (NASDAQ: ORCL) made a big purchase, securing cloud marketing company Eloqua for a cool $871 million.
According to an analyst's report on Zacks, Eloqua, which sells cloud-based marketing automation services to companies like ADP and Dow Jones, went public in August at a cost of $11.50 per share. Its shares were up to $17.90 on the day before it sold. Oracle paid $23.66 a share on December 20 when it bought Eloqua, making it a happy holiday season for Eloqua shareholders.
The Zacks report also states that the buying price equaled nine times the previous 12 month's trailing sales. In other words, the purchase price was way over the actual value of the company, meaning Oracle clearly wanted this piece badly for their growing cloud portfolio.
Cathy McKnight, a founding partner at Digital Clarity Group, thought it was a smart move by Oracle to fill in a crucial missing piece in its web content management and customer experience management product portfolio. Clearly, Oracle wants to compete with Salesforce.com, which has also used acquisitions to build a marketing tool catalog in the cloud.
As I wrote though in a post on TechTarget, as much as Oracle wants to buy its way into the cloud and compete with Salesforce.com in its own territory, it remains at its core an on-premise software company, and buying a few pieces in the cloud isn't likely to change that much.
What this purchase does is illustrate just how much of a focus marketing has taken in the web content management space. Oracle knew that it couldn't survive in web content management selling its traditional product offerings to IT when the competition had moved on to marketing. And Oracle has made a concerted effort over the last year to buy the pieces it needs to compete with Salesforce on one side and Adobe (NASDAQ: ADBE) and IBM (NYSE: IBM) on the other, both of which have been just as aggressive in trying to build solid modern marketing product portfolios.
I'm still highly skeptical that Oracle can make a case for itself as a cloud company, but Adobe has started to make the shift, as has Microsoft (NASDAQ: MSFT). We will need to wait and see whether any of these traditional software companies have what it takes to be true cloud vendors--and all that it entails, in terms of agility and innovation.
For more information:
- see the Oracle press release