Oracle Acquires RightNow to Take on Salesforce.com in Cloud Based CRM

October 27th, 2011 by Trefis Team
+11.01%
Upside
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Market
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Trefis
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Oracle

Oracle (NASDAQ:ORCL) announced that it has acquired RightNow, a leading provider of cloud based customer service, for roughly $1.5 billion net of RightNow’s cash and debt. [1] With this acquisition, Oracle will now compete directly with Salesforce.com, which is the largest player in the cloud based CRM (customer relationship management) market. Oracle is one of the largest enterprise software makers which competes with SAP (NYSE:SAP), Microsoft (NASDAQ:MSFT) in the enterprise market and CRM (NASDAQ:CRM) in the CRM market. It recently announced the new Oracle Public Cloud and is working to make its entire suite of enterprise applications available on demand via the cloud.

CRM is a part of the Application Software business that accounts for around 23% of Oracle’s $40 Trefis price estimate, which stands nearly 20% above its current market price.

Check out our complete analysis for Oracle.

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With RightNow, Oracle Plans to Take on Salesforce.com

Salesforce.com currently leads the cloud based CRM market. Oracle has been a major player in the traditional on-premise enterprise software market, but with the rise of cloud computing, most major enterprise software makers have been launching cloud based versions of their offerings. Oracle recently announced the Oracle Public Cloud, which combines Oracle Fusion CRM, Oracle Java Cloud Service, Oracle Database Cloud Service, Oracle Social Network and other services.

“Oracle is moving aggressively to offer customers a full range of Cloud Solutions including sales force automation, human resources, talent management, social networking, databases and Java as part of the Oracle Public Cloud. RightNow’s leading customer service cloud is a very important addition to Oracle’s Public Cloud,” said Thomas Kurian, Executive Vice President, Oracle Development.

Oracle will also inherit RightNow’s entire customer base, which should help it gain market share in the cloud CRM market much faster. The company already offers CRM OnDemand, which will have some overlap with RightNow’s CRM offering, but we expect Oracle to merge the two offerings in some way going forward.

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Notes:
  1. Oracle Buys RightNow, Press Release [↩]