Oracle Acquires Eloqua to Boost Cloud Presence

Playing catch-up in the cloud computing arena, Oracle acquired Eloqua this month in a deal worth $871 million. Vienna-based Eloqua went public just this summer. The deal with Oracle should close during the first half of 2013.

So what does Eloqua offer that Oracle wants? According to the Washington Post, Eloqua is a software maker whose products help companies “identify the visitors to their Web site who are most likely to purchase products or services.” Their client list includes such luminaries as Blackboard and the Washingon Capitals.

Apparently Oracle wants the company intact. All 400 of Eloqua’s employees will retain their jobs. According to Eloqua’s website, “Oracle plans to make Eloqua the centerpiece of its marketing cloud offering.” Indeed, Eloqua insists that “The combination of our best-in-class modern marketing platform with Oracle’s Customer Experience suite will create a comprehensive Customer Experience Cloud that offers customers the ability to transform the way they market, sell, support and serve their customers.”

It’s an interesting reversal of sorts for Oracle. Back in 2008, outspoken CEO Larry Ellison insisted that cloud computing was “complete gibberish.” He even described it as a fad, and compared the computer industry to the fashion world. This is always a dangerous move, as one never knows what will stick – indeed, some described the Internet as a fad back in the early 1990s.

Cloud computing offers important advantages to corporations, however. It’s faster to implement than more traditional software, and easier on the wallet when initially purchased because of lower upfront costs. These points in its favor led many companies to get over any potential squeamishness they might have felt about receiving services via the Internet from remote data centers which they did not directly control.

Oracle found itself in the awkward position of competing with companies offering web services similar to the more traditional ones that Oracle itself sells – not just its usual rivals like Salesforce, but Amazon and Google as well. In fact, last year Oracle paid $1.5 billion for RightNow Technologies, a provider of cloud-based customer service. Indeed, it is probably RightNow’s offering, which Oracle has made its own, that will be combined with Eloqua’s. Oracle has also purchased Taleo, a cloud-based HR software company. It is as if Oracle is purchasing companies in the cloud computing sphere that offer products that specifically duplicate Oracle’s traditional software suites.

This trend from Oracle seems likely to continue. Yahoo quoted a research note from Nomura Equity Research analysts that said “We would expect Oracle to continue to make acquisitions in this space, to bolster its Fusion Applications suite and respond to competitive pressure in the applications market from SAO and Salesforce.”

The new cloud-based offerings from Oracle will give the enterprise software giant an additional income stream from a slightly different market sector. Nucleus Research analyst Rebecca Wettemann observed of this latest purchase that “Although Oracle already had strong marketing functionality, this gives it a cloud offering to deliver an additional base of midmarket customers providing a recurring license stream.”

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