Oracle has continued its acquisition spree by agreeing to buy RightNow for $1.43 billion dollars. RightNow is a cloud computing company offering CRM and customer experience software delivered as Software as a Service (SaaS). This move is interesting and fits in with the Oracle Public Cloud strategy Larry Ellison announced in his keynote at Oracle OpenWorld recently.
From a business perspective, the acquisition brings Oracle a customer base in the small and medium business arena for whom the SaaS pay per use is particularly attractive. The experience of RightNow in customer experience will also be beneficial to Oracle as they move to provide more public cloud computing services. From a business and technical perspective it will be interesting to see how the RightNow products will be offered alongside Oracle’s existing Siebel based CRM software. This product has traditionally been offered as a high end solution for larger organisations. Will they be merged to form a coherent solution that can be offered to organisations of all sizes or remain two distinct products. Whichever way they progress, it will certainly give Salesforce.com something to think about as a credible alternative offering.
As SaaS becomes the norm for delivering end user applications, the loyalty of customers will become ever more difficult to develop because there are alternatives that can be readily provisioned, almost instantaneously in many cases should they become dissatisfied with their current software. This has a big impact on the level of customer service provided by organisations offering SaaS – many will have to improve significantly as the choice of software increases. As well as a valuable customer base, it may be the experience in customer service for SaaS that was a driver in the Oracle acquisition of RightNow.
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