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Should we congratulate Oracle on buying Netsuite?

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My first thought upon learning that Oracle is buying NetSuite for $9.3 billion in cash: “Congratulations Oracle, for buying yet another email company.”

Many see this latest acquisition as an effort by Oracle to complete its cloud product offering. But along with the NetSuite acquisition come its ancillary companies including Bronto Software, which NetSuite itself bought in 2015 for $200 million.

Although the industry focus will be on Oracle as a whole now, what should concern marketers in general, and email marketers in particular, is that Oracle is buying yet another company with an email provider attached.

Will history repeat itself in loss of innovation and leadership?

If NetSuite’s acquisition by Oracle follows the path of other acquisitions of email technology companies, we will see yet another source of leadership and technological innovation fade away at a crucial time in the email industry’s growth and evolution. Also, key leaders jumped ship after each acquisition, taking with them their visions for the future, and were not replaced.

Oracle bought both Responsys (for $1.5 billion in 2013) and Eloqua ($810 million in 2012) ostensibly to enhance its cloud-based technology offerings and give its customers reliable email platforms.

Post-acquisition, both Eloqua and Responsys lost their positions as two of the industry leaders and ceased to have standing in the marketplace. And that’s not just a public relations lament.

Both companies drove substantial innovation in email messaging technology – that’s not to say that they were the only ones, but they were noteworthy. In turn, this spurred its competitors on. We now only have a small set of competitive innovators that push the overall industry forward, and that hurts the entire email landscape.

Cloud companies that view an email technology platform as a bolt-on technology, or one messaging provider among many, kill the innovative push that made that platform provider such an enticing acquisition target in the first place. We still need innovation at the channel level.

Just look at the latest Forrester Email Wave Report that was released last week. While Oracle may look like it’s ahead of the pack on the surface, it actually took a major hit since its previous comparable year. Surely the acquisitions of Eloqua and Responsys should have strengthened the company’s position as an email marketing leader? Sadly not.

Mark Hurd, co-chief executive (CEO) of Oracle, addressed the issue in a way with this comment: “Oracle and NetSuite cloud applications are complementary, and will coexist in the marketplace forever. … We intend to invest heavily in both products–engineering and distribution.”

Well, we’ll see. Oracle as a company might continue to grow, but likely without similar dominance in the email channel. What I fear is that yet another company is going to end up losing service quality, investment in platform development and leadership in delivering to mid-market customers.

What should Oracle do next?

Maybe it’s cheeky of me to tell Oracle chairman Larry Ellison and CEOs Hurd and Safra Catz what to do with their latest purchase, but I’m going to do it anyway:

Guys, if you’ve learned anything from your acquisitions of Responsys and Eloqua, it’s that service is at the core of what you do. Especially when you’re buying email companies.

You want Oracle to be a leading tech company but didn’t say anything about service. The problem, however, is that “service” is part of the job description for the email service provider you just acquired.

Marketers and enterprises need help with data management, with strategies for incorporating big data to enhance their messages to achieve 1:1 personalization.

They need help from their service providers to implement new and innovative programs. They need to have help with incremental innovation, where innovation is seen as a great leap over time, and guidance from strategic leaders.

Oracle’s decision to acquire another technology company has to go beyond just enhancing the cloud. If you acquire a company and ignore the services that company provides to its customers, you lose your core competency.

One bright spot – for the competition

I hope Bronto doesn’t end up losing market share and industry standing, but my deep fear is that it will fade out of an industry to which it made great contributions.

The email industry has not seen a successful acquisition in its entire history, proving the point that once you acquire a company, all innovation and investment stop.

The one advantage Oracle’s NetSuite acquisition gives the email industry and its providers is that now their phones will start ringing as clients start looking for companies that continue to maintain the level of services they need to get their jobs done. They’ve seen that history in the industry too.

 

 

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