Oracle Buys Eloqua, Part 2
Earlier today, Jonathan Block discussed here what Oracle’s acquisition of Eloqua means for Eloqua and the marketing automation platform market as a whole. I agree with the points Jonathan raised, especially his opinion on Oracle’s poor track record of capitalizing on the marketing technologies it acquires and on what this acquisition might signal for Salesforce.com. Here are my additional thoughts on the roadmap, competitive positioning, lifecycle marketing and Eloqua employees.
In our recent vendor profile on Eloqua, we discussed its focus on extending its enterprise capabilities by extending data management capabilities, offering true development-to-production staging and increasing the precision and granularity of securing permissioning. Though acquisitions often throw future roadmaps into disarray, I think Oracle’s acquisition will bolster these areas. In addition, Eloqua, like many other marketing automation platform (MAP) providers, has sought to extend beyond one data center to improve application responsiveness, decrease downtime and improve disaster recovery capabilities. Eloqua will now be able to leverage Oracle’s robust data center infrastructure.
The Oracle acquisition slightly reorients Eloqua within the marketing automation platform market, making it more of a menace to Aprimo, Unica and Neolane. These three marketing automation platform vendors have focused their product offerings and future roadmap to include data management and advanced analytics. These three vendors also have a high proportion of B2C customers. Given Oracle’s vast network of B2C customers (which it can upsell into) and its intent to infuse Eloqua with its technology assets, including Big Data and Business Intelligence, we can expect these four vendors to enter into more direct competition with one another.
Our research shows that only 8 percent of B2B organizations leverage their marketing automation investments to drive customer marketing. Oracle (through its customer experience cloud) aims at delivering an “end-to-end management of the customer journey through unified data, integrated business process management, and business analytics.” This acquisition can help Eloqua enter more deeply into customer lifecycle marketing and automated customer onboarding, enabling cross-sell and upsell opportunities and the re-engagement of customers after technical support cases. Whether or not Eloqua takes advantage of this opportunity, only time will tell.
The Eloqua stock was priced at $11.50 on the day of its IPO. It now sits at $23.50 per share, and Oracle is offering a 31 percent premium over the Eloqua share price. I mention this because stock options typically vest when a change of ownership occurs, and the majority of Eloqua employees are incented with stock options, like many employees at fast-growth technology companies. For example, if an employee holds 10,000 shares at a strike price of $8, this acquisition equates to a $225,000 windfall. With no financial lock-in, a healthy bonus and a significant shift in corporate culture (going from about 400 employees to more than 100,000, and from a start-up mentality to a bureaucratic one), we can expect many Eloqua employees to leave and join smaller technology organizations or start consultancies that provide marketing automation services. This may impact Eloqua’s sustained ability to execute and innovate.