More Market Consolidation With Oracle Acquiring RightNow: More Questions Asked Than Answered

It’s exciting to see the news of yet another acquisition in the world of customer service with the announcement of  Oracle’s intent to acquire RightNow. Today’s contact center ecosystem is complex and comprised of a great number of vendors who provide overlapping and competing capabilities. I’ve previously blogged about what these critical software components are. The reason why these acquisitions are good is that they align with what customers want: a simpler technology ecosystem to manage from both a systems perspective and a contractual perspective. And suite solutions available from unified communications (UC), CRM, and workforce optimization (WFO) vendors are evolving and include comprehensive feature sets. These vendors have either built these capabilities out or acquired them via M&A activity — and we expect more M&A to happen.

Now, to focus on the RightNow acquisition. This acquisition, at a high level, is a win-win for both companies:

  • RightNow gets the big-company marketing, professional services, and sales reach of Oracle to grow beyond its current run rate and compete more effectively with salesforce.com, Microsoft, and to a lesser degree SAP. Forrester rated RightNow as a leader in our Forrester Wave™ for CRM and CRM customer service suites.  
  • Oracle gets a full-featured, on-demand customer service solution, which has been missing from its current offering. It also helps build out Oracle’s “cloud” story.  Have a look at the following graphic:

However, the success of this acquisition will reside in the details:

  • There is a mismatch between the Oracle and RightNow company cultures; this threatens to put RightNow employees and customers at risk unless this culture gap is bridged.
  • Oracle has many overlapping and competing assets for CRM and customer service as well as for point solutions (e.g., email, chat, and knowledge management). Oracle must position RightNow as a unique offering in its current solution portfolio and must clearly message and steer customers to the right solution for their particular business need (for example, if I am a customer needing knowledge management, do I buy InQuira from Oracle or RightNow from Oracle? What about a chat solution? Do I buy InstantService from ATG/Oracle or from RightNow or the Oracle product?).
  • Oracle must focus on the right product integrations that make sense in the short term and overcome architecture and codebase (.NET and JAVA) differences.
  • In the long term, Oracle needs to choose and explain what overlapping solutions it wants to invest in going forward to simplify and better target its product portfolio (Oracle OnDemand? Fusion? RightNow? Or a combination of these solutions?).

Attention to these sales, marketing, product direction, and customer service issues will make this acquisition successful.

Comments

Thanks for posting Kate -

Thanks for posting Kate - good analysis.

I agree with you Kate that

I agree with you Kate that this is exciting news in the world of customer service, but there is work to be done. It is certainly a strong proof-point that customer service is changing rapidly and the move to the cloud is on. At LiveOps, our customers regularly tell us about the value derived from integrating our cloud contact center platform with RightNow and Salesforce.com. Next they will want full multichannel access over the cloud (voice, email, chat, text, Twitter, Facebook, etc.). Today’s news is likely a wake-up call to those enterprises still locked in their hardware-laden, "single-channel", on-premise contact center infrastructure.

Bemused and confused

Thanks for the analysis Kate - good stuff.

I'm still bewildered by Oracle's acquisition here though and the driver behind it. The R&D knowledge from RightNow is surely too late to help at all with Fusion. But with Fusion available on-demand as well - could the RightNow capability/experience intended to be leveraged to enable the running of that?

I think the key concern from the acquisition is the product overlap you point to in the details. I don't see how they get beyond building a greater value business than the individual sum of its parts. Its now a number of years since Oracle swallowed Siebel - the jewel in the CRM crown. It was a far away leader of CRM back then (although we had seen a number of programme train-wrecks along the way this was usually down to a failure in approach and execution than the technology itself - Siebel was (and still is) a great product). However, after the acquisition, clients were still fearful of buying Siebel for a while (and the likes of JDE and other ERP vendors Oracle had consumed) due to uncertainty in the future roadmap. We were all awaiting the promises of Fusion until the Apps Unlimited announcement came (and Fusion didn't) and then clients began again with business as usual.

Years on and the roadmap seems even less clear. We are still awaiting the Fusion CRM release. And now we have Inquira, ATG, Siebel, CRM OnDemand, WebCenter and now RightNow and countless other smaller Oracle components we could choose from when tackling the service function.

Simply bringing RightNow into the Oracle fold seems to be too much of an additional complication for their business and their clients without enough upside to make it worthwhile unless there is some other plan of value here. I think there must be some deeper play. I've too much respect for Oracle to assume otherwise.

Look forwards to reading more from Forrester on this.

Victor

Oracle aquisition of RightNow

Social Media integration for CSS was conspicuously missing from Fusion at OpenWorld. Now I know why.