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Denis Pombriant Oracle Acquires RightNow

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By Denis Pombriant, of Beagle Research

A Look at the Oracle RightNow Acquisition from the RightNow Summit

Anthony Lye was walking around the RightNow Summit meeting like a complete unknown. It hardly registered on anyone that this was the guy who'd just orchestrated the offer of one and a half billion Oracle dollars to buy RightNow Technologies. He was also the person who bought Endeca, a privately held company that provides unstructured data management, web commerce and business intelligence solutions, for an undisclosed pile of loot a couple of weeks back, and earlier in the year ATG, the Ecommerce provider for another billion.

Lye is one of the good guys in the business; you could easily have a beer with him and chat about almost anything. I know. So it was surprising to me that he was being virtually left alone at such an important time and place.

I walked over, shook his hand and exchanged a few pleasantries and then asked about the matter at hand. Was he there to speak with the analysts and press assembled for what had been planned as a different kind of event? Not really. "We're still separate companies pending all the approvals and I'm mostly here for the employees," he told me.

Nice touch, I thought, especially since for the eleven days it took to put the deal together the acquisition was known to only the barest number of RightNow staff with a need to know. You could see the announcement had been a surprise to everyone and I had a few conversations about the future as the staffers wondered about life in the Oracle machine.

I told them that the key was Anthony. He'd been a leader at Siebel Systems when the company was taken over and knew what that was like which I am sure was part of the motivation for his visit. When you buy a technology company, you are buying much more than the source code, you have to retain the good will and knowledge of the people who work there or your investment will go south quickly. If the future is like the past in this regard, those RightNow people who want a future with Oracle will have one, the others will join startups, start their own or do something interesting.

But back to Anthony Lye alone in the crowd. He was beaming about his latest move, especially when I began connecting the dots — RightNow plus ATG plus Endeca plus Oracle CRM OnDemand could be a powerful combination once all the connections were sorted out. Lye agreed and we were in an interesting context for the discussion.

We had just screened a RightNow video showing a man in the near future interacting with many systems through touchless pads (yeah, fingers are so last year) as well as big screens. He was everyman as consumer navigating relationships with various vendors from the car dealer (need an oil change) to Nordstrom (need a dress for my wife's birthday) to an airline (comforting they still have airlines in the near future, disappointing that they still charge change fees). It all happened through conversations and data exchanged through the internet; no fumbling with plastic cards and the vendors knew everyman and what he liked.

Ironically, the video made no mention of the neurosurgery needed to do the dress thing, but I digress.

The point of the video was that our relationships with vendors are evolving into two-way conversations, which was amplified by RightNow's CEO, Greg Gianforte and his keynote. Of course, some of those conversations will happen with computers and there is a lot of technology still to be built to do things like intuit from social clues what the customer wants before the customer tells us so that we can organize the solution.

RightNow will make this vision possible in conjunction with ATG and certainly Endeca. Its a grand vision, something that Lye (and Gianforte) has been working on for a long time as he thought about the future of his business and now he has assembled, if not all the components, at least the major chunks.

That's the significance I see in the RightNow acquisition. The fertile minds of RightNow will soon have access to more capital and an important collaborator to pursue their vision. RightNow's customers and employees, if past is prolog, will not suffer from this and customers will be treated to a stream of technology improvements and added thought leadership. This might fall into the category of creative destruction in its best sense. End

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Comments (5) — Comments for this page are closed —

Guest Shaun Morgensten
  I think RightNow was founded in 1997, about a year before Salesforce.com, but despite the near same start, RightNow couldn't keep up and with Salesforce.com releasing its Service Cloud 3 it appears RightNow's last competitive advantage was eroding. RightNow was a great company, but clearly losing ground to both the innovative start-ups like Salesforce.com and the Tier 1 players of Oracle and SAP.

Janice Tonya Probert
  Although Oracle overpaid, it has acquired over 2000 largely happy customers and some great IP, including RightNow's voice enablement platform, social monitoring tool, online community product and ideation solution. RightNow also has a great knowledgebase, however, that will likely compete with Oracle's existing Oracle knowledge management and the InQuira knowledge product during the production rationalization and shakeout process. In addition to some competing products, the cultures of the two companies stand in great contrast. I'm not sure how the Bozeman, Montana culture (which hunts and eats its prey) will merge with the Silicon Valley giant (which eats its own). It seems highly likely that this acquisition will lose more of the acquired talent than most.

Guest Jeff Whitman
  My how times have changed. It was only one year ago that RightNow CEO Greg Gianforte was publicly sharing his own bad experiences with Oracle, and his desire to stay "Oracle free". In an interview, he said "Let me tell you about Oracle... We needed a new accounting system. The one we had was at end of life so we set out to procure a new one. There are really not that many options out there. That German company that makes accounting systems was probably too big for us, so we had a shortlist of Oracle and NetSuite. Now I didn't trust Oracle as far as I could throw a stick! We try to keep our data centres an Oracle-free environment." He went on to share how the Oracle compliance people try to strongarm their customers, and in fact tried to strongarm RightNow. In the end, or at least about a year after Gianforte's comments, I guess the acquisition price outweighed his personal and/or professional feelings for Oracle. Now RightNow customers will have to make a similar decision.

Guest Kevin Spore
  For Oracle, getting a strong cloud-based customer experience CRM product makes sense, although its questionable whether the inflated price tag of $1.5 billion for a $250 million revenue company makes business sense. For RightNow customers and RightNow staff that didn't cash out, the culture clash with Oracle will likely prove overwhelming. I don't know that Oracle recognized when they purchased the RightNow Customer Experience solution that CX is not just baked into the company's software, but also into the company's business processes and customer centric business model. Without these later components, which Oracle seemingly has little to no interest, Customer Experience is a piece of software that Oracle hypocritically tells prospects and customers can transform their business, without evidence that the new owner of the software has succeeded in such a claim.

Guest Jenna Ritchie
  I suspect RightNow found itself in an awkward position – unable to effectively compete against the big 2 of Oracle and SAP, losing CRM market share to the rapidly rising 2 of Microsoft Dynamics CRM and Salesforce.com, and feeling susceptible to the next wave of innovative start-ups.
 

 

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Anthony was beaming about his latest move, especially when I began connecting the dots — RightNow plus ATG plus Endeca plus Oracle CRM OnDemand could be a powerful combination once all the connections were sorted out."

 

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