Posted by Zach Hofer-Shall on March 30, 2011
It's been quiet on the social media data acquisition front the past few months, but today's announcement — that salesforce.com plans to acquire Radian6 — is the biggest news yet, both financially ($326 million) and for what it means to the social space. First off, congratulations to both parties involved; this deal will benefit you both.
Watching the two companies over the past year, this acquisition comes as a natural extension of what was already a strong partnership. Radian6 was one of the first listening platforms to identify the need for — and implement — salesforce.com integration. Salesforce.com recently announced a Radian6 app as part of its service cloud. Last month Radian6 began feeding salesforce.com's Chatter data into its Engagement Console. And just last year, Radian6 brought on a new director — former salesforce.com CMO, Tien Tzuo — to advise on its SaaS offering. The deal is a logical step for salesforce.com and a testatment to Radian6's strength in the listening platform market.
This acquisition will only strengthen the connection between social media listening and CRM and is a deliberate push toward the elusive "social CRM" concept. I've positioned in the past that social CRM isn't a technology you can simply install, but bringing together a listening platform with a CRM vendor under one roof could give the market the first end-to-end solution. Salesforce.com can now cover social listening, data analysis, customer profiling and record storage, and social engagement all under one offering. The move also furthers salesforce.com's commitment to social media. Through its engagement console, Radian6 helped popularize the concept of social customer support — an area that salesforce.com will happily improve through this acquisition.
The bigger picture is that Radian6 moving under the salesforce.com cloud is a sure sign that social media is ready for business. Salesforce.com will likely offer Radian6's listening tools to its existing customer base, putting social media in the hands of more companies and new teams within companies. The impressive premium paid for Radian6 supports the importance of adding social to business, but this sizable acquisition means that salesforce.com projects huge growth for the future of social media. Salesforce.com will expect the eventual return from the added value to current customers, increased new customer base from legacy Radian6 buyers, and potential future customers enticed by the social CRM offering.
So what's next? More of the same. This is a good leading indicator of an upcoming year of social M&A. Salesforce.com's CRM competitors — as well as customer support competitors — are watching this deal closely and will look for ways to compete in the future. Radian6's competitors will also watch closely, looking for further partnerships and data integrations to keep up with the listening world's new giant.
Again, congrats to both parties. I look forward to seeing what develops next.