Posted by Zach Hofer-Shall on June 5, 2012
Whoever said the summer's supposed to be a slow time for news had better be on vacation this week. While the financial markets keep a keen eye on $FB's fluctuation, my colleagues and I are busy analyzing the flurry of M&A around the social technology vendors. Simply put, it's a busy time in the social media world.
Just over a week ago, Oracle purchased Vitrue to add social media management to its bigger technology offerings. Yesterday, Salesforce.com countered the announcement with the acquisition of Buddy Media. But not to be outdone, today Oracle announced it will acquire Collective Intellect, a social intelligence company. The announcement comes a year after Salesforce.com purchased Radian6 and now gives both CRM giants the components they need to piece together something powerful. With social CRM in sight, this social technology arms race is the start of something very big to come.
Let's answer some quick questions about this rush of activity:
Because Salesforce.com and Oracle know what we at Forrester have been saying all along: We've entered the age of the customer, in which companies must obsess over — and meet the dynamically changing needs of — their customers. In the age of the customer, successful businesses must be ready to connect with consumers in any channels they desire. Social is the hottest today and any customer relationship focused technology must meet those requirements.
Why the acquisition streak?
Because social startups hold the innovation that big tech companies need. As the thousands of social startups can attest, building social tools can be easy, but building successful social technologies is very, very difficult. As my colleague Melissa Parrish pointed out in her Salesforce.com/Buddy Media post yesterday, "These acquisitions are not about adding immediate significant revenue. They’re about adding technology offerings." As always, Melissa is absolutely right. None of these acquisitions pick up wildly profitable companies; they pick up unique technologies that will help the tech giants meet future market demands.
How will these technologies come together?
Social customer relationship management is hard. It requires access to social data, technology to filter, process, and analyze content, and tools to manage and apply insights. Although CRM companies had tools to help manage data, few were ready to capture, process, or apply social media. Through these acquisitions — monitoring and intelligence tools to capture and analyze social data and management and publishing tools to help apply social media — Oracle and Salesforce.com get a lot closer to social CRM. They're now tasked with building the connectors between disparate platforms, but they at least have the pieces they need.
Why Collective Intellect?
Collective Intellect was a smart purchase because it offers a unique technology focus. Among the 100+ social monitoring, analytics, and listening platforms out there, I've covered Collective Intellect extensively in my prior research because of its ability to integrate social and customer data and its experience exporting data into third-party technology systems. These are cornerstones of driving intelligence from social media and — as stated above — are a core component of social CRM. Although many listening platforms offer the ability to capture and analyze social media, successful business strategies require more integrated functionality.
For Oracle and Salesforce.com, the race is on to productize their social CRM offerings. Buying the pieces is certainly easier than building them, but creating a social stack on top of their existing business technology won't be an easy road. For the rest of the market? It's time to catch up. Expect more acquisitions and partnership announcements from CRM competitors, but also from BI, ERP, and any other business technology acronym out there, because these acquisitions are a turning point for social media.
Through these acquisitions — and the eye-opening price tags behind them — Oracle and Salesforce.com show that the business world is getting ready for social media. It's no longer considered a fad, definitely not just hype, and not going away any time soon. Businesses must care about social media because it's clear that consumers already do.
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