Oracle Buys Eloqua: Expanding Marketing Footprint

Eloqua's Fit in the Oracle Application Portolio

Eloqua is being brought in as the 'centerpiece of the marketing cloud' solution within the broader Customer Experience Cloud offering.  The Customer Experience Cloud is Oracle's comprehensive go-to-market strategy for its CRM offerings that it introduced in mid-2012.  Additionally, Eloqua will be leveraged with integrations to Fusion CRM and ultimately extended into vertical offerings.  There is overlap with the previously acquired Market2Lead product in terms of campaign capabilities but Oracle spokesmen stated that Eloqua would be the primary product and Market2Lead would be integrated to it.

Market Reaction

First and foremost, Oracle is serious about its CRM business.   According to IDC market numbers, Oracle has led the worldwide CRM applications market since its purchase of Siebel, holding 11% of the market in the 2011 shares data.  However, both SAP and Salesforce.com are within two percentage points of that share fueling Oracle's motivation to maintain and increase the distance.  The current battle ground of competition within the CRM applications market is being fought in the marketing automation segment where, as this IDC Data Map shows, the traditional transactional vendors hold much smaller footprints.  

This acquisition immediately brings to mind the question, 'what will Salesforce.com do now?'  Not only was and is Eloqua a key partner of Salesforce's, the company relied on it and similar partners to provide this capability to its customer base.  Salesforce.com's acquisitions in the marketing arena to date have been focused on social marketing capabilities.  While Oracle was explicit in stating that the product, like the other components of its various applications offerings, is capable of being used in a heterogeneous environment, Salesforce.com won't be happy long sharing its customer base  Eloqua today, has a significant number of Salesforce.com customers in its base as well as Microsoft Dynamics CRM.  Marketo may become far more attractive to Salesforce.com as the new year begins.

Conclusion

Overall, the latest acquisition by Oracle signals a commitment to building a fully comprehensive product offering for its CRM business that covers all the major elements of the CRM applications market.  For Oracle the coming year will be one of bringing integrations and proof points to market.  For the other marketing automation vendors with broad marketing capabilities, specifically Adobe, IBM and SAS, there will be more of a trade-off for customer evaluating products between a CRM suite solution and best-of-breed. 

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How bright is the silver lining of Salesforce.com's Marketing Cloud?

At their annual Dreamforce shindig last week Salesforce.com announced the formalization of their marketing capabilities as the Marketing Cloud. Essentially it is a coupling of four key pillars of Salesforce.com's front end:

1. Customer intelligence: Data.com enriches contact and account information with fresh feeds from sources such as LinkedIn and many others. Enables both sales and marketing to create detailed contact profiles for segmentation, targeting and campaign management.
2. Social advertising and content management: The recent Buddy Media acquisition provides support for a wide range of social channels (social, web, mobile) and formats including contests, videos, and photos. Users can coordinate their publishing and advertising activity and measure impact throughout the social sphere.
3. Social listening and analytical tools: Radian 6 monitors popular social services such as Twitter, Facebook, LinkedIn, YouTube, as well as blogs, forums, communities and more. Supports 17 languages and mobile access.
4. Core CRM functionality: Salesforce.com consolidates resources to provide sales reps with a single source that can connect them with other applications, contacts, colleagues and workflows. Pulls data together into account/opportunity context. Delivers reporting data to sales and sales managers and can provide opportunity and pipeline performance data into other systems such as marketing and order management.

Salesforce.com is taking its "Social Business" mantra to heart by building its marketing functionality with a "social first" philosophy. The question is: will this be enough to satisfy Salesforce.com customers (and the company itself)? The answer is probably not. The functionality you won't find in Marketing Cloud is significant - the core campaign management tools, workflows, analytics and more offered by marketing automation vendors (e.g. Eloqua, Marketo, Neolane, Pardot, etc.) Even though there are fewer seats to be sold to marketers as opposed to sales, these two worlds are rapidly converging. The systems needed to automate them will need to do likewise, as evidenced by the tight integration of most marketing automation systems with Salesforce.com and the recent announcement of Chatter for Eloqua.

But Marketing Cloud is undoubtedly only the first step, in fact it's well beyond the first step for Salesforce.com and the only issue going forward is how do they continue to expand functionality in this area?  The build or buy equation for Salesforce.com currently favors the build approach as valuations for marketing automation vendors are sky high, at least in terms of an acquisition. Salesforce.com has plenty of time to creep into the marketing automation arena, establish itself as a more serious threat and then re-evaluate its strategic decision around marketing functionality.

In the meantime, marketing automation vendors have their work cut out for them. They must stay well ahead of where Salesforce.com's Marketing Cloud may go. They must continue to grow rapidly, prove their staying power and market value. Customers, however, should have no illusions that Marketing Cloud is an enterprise marketing automation platform in its current state. There is much more to marketing than social engagement especially for B2B models. Waiting for Marketing Cloud to evolve or for social to mature is simply not a choice, there is way too high a price to be paid in terms of market share, growth, and profitability. So if you're considering marketing automation don't delay or change course because of Marketing Cloud. Charge ahead full steam and should the social engagement of Marketing Cloud pop your ROI, by all means add it to your arsenal. 

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Big Data Comes to Marketing?

What's the most commonly heard word in marketing organizations today? It is “Transformation.”

Dramatic transformational change is sweeping through marketing functions in most industries. And the main "change agent" is the customer. Or what we at the IDC Executive Advisory like to call the "New Buyer" . Our customers and prospects today are crafting their own routes to learning about products and services. They are motivated and skilled at educating themselves and learning from peers. They travel through numerous digital pathways in their exploration process. And by the time they come to a meeting with the vendor sales person, they are smart and savvy. They are empowered.

Marketers need to ask and answer these questions: Where did our Buyers come from? What do they know already? And above all: How do we  add new value to where they are in the process of discovery about our product or service? The New Buyer dynamic creates volumes of new data and customer intelligence analysis opportunities for vendors.

In turn, Those in the marketing job function must be able to bring better data into any planning meeting, including discussions on budgets and investments; programs and campaigns; or performance measurement. Hard data needs to complement the “softer side,” or the “art,” of marketing.

The tools for accessing and mining data, and turning data into insights, are now plentiful for today’s marketers. And, The marketing job function might be the last of all an organization’s major functions to become automated.

The marketing winners of tomorrow will be masters of rapid data management — able to turn data into intelligence, intelligence into analysis, and analysis into decision support and execution. Achieving this will be the first step in the rudiments of sales-to-marketing cost control.

For the CMO, there are three critical, inter-departmental, data-driven intersections that need to be created and nurtured. Marketing is now too important to run in isolation, so here are the three key intersections:

1. The Marketing and CIO intersection. New IDC research shows that the investment in marketing automation technologies in 2012 will be at three to four times the rate of 2011 levels. Automation technology development is going to sweep through sales and marketing over the next 10 years.

2. The Marketing and Sales (CSO, or Chief Sales Officer)  intersection. Today, the CMO needs to be able to connect sales technologies, such as CRM, with new marketing automation technologies.

3. The Marketing and CFO intersection. The CMO needs to deliver a return on investment in measurable terms in order to have meaningful budgeting and planning discussions with the CFO. Measuring impact of push programs in terms of conversion to leads, opportunities, and revenue is the game today.

I like to say that there will be more change in Marketing in the next five years, than we have seen in the past 25 years combined. These Marketing data and IT automation issues will be at the forefront for the next generation of successful CMOs.

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The Customer Cloud: The Killer App for the Social Enterprise

The old two-step marketing and sales model for customer creation is dead. Today we have a three part model: Socializing, Marketing, and Sales – with socializing taking on increasing importance and marketing being redefined in the process. That’s a good thing for customers but it makes the market more competitive for sellers. Companies have to seek out and engage with both existing and potential customers in radically new ways outside of explicit business contexts with resources previously not thought of as customer facing.

This activity is going on today at a furious pace, but it is highly fragmented. With the introduction by Salesforce.com of Data.com and the social ready rebuild of Database.com at Dreamforce, as well their Chatter and CRM capabilities, customer interactions will come together in what is emerging as the Customer Cloud – the first killer app for the social enterprise.

The Customer Cloud will evolve into the source of record for all account and contact data because it can provide the Holy Grail of the customer creation process – the unified customer record. As a result, it will be the centering point for all customer interactions. It is definitive because:

• It is self-regulating – contacts update their own data via social tools such as LinkedIn, Facebook, etc. greatly improving data accuracy and timeliness
• It is real time – individuals have a vested interest in updating their social profiles asap
• It has practically infinite scalability and reach.
• It is equally available to all customer facing functions from marketing to sales, as well as fulfillment, finance, service and support, etc.
• It provides insight into relationships – account contacts can be sustained and expanded even in the face of departures, and corporate hierarchies can be better understood and tracked.

A unified customer record provides the basis for breaking down the discrepancies, decay, and dysfunction that currently plague (or prevent the implementation of) enterprise customer creation processes, especially in B2B. It offers companies the potential to coordinate all of their customer facing activities around a single source of information – the lack of which has been the Achilles Heel in all previous efforts in CRM, data warehousing, and other valiant attempts to unify customer facing functions.

Thus at Dreamforce, the announcements of Data.com and the social data readiness of Database.com are major strategic milestones for Salesforce.com. With the addition of the Radian 6 social monitoring last year, this neatly rounds out a very strong play for leadership in the battle to deliver the Customer Cloud and provide the customer facing infrastructure of the future that will be build upon it.

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