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Summary:

In picking up ExactTarget, Salesforce.com is setting the new standard for reaching customers, but at a big cost. Here’s what the internet had to say about the deal on Tuesday.

salesforce marc benioff arms open

In putting down $2.5 billion for marketing player ExactTarget, Salesforce.com touched off plenty of commentary from bloggers, analysts, marketers and others on Tuesday. Many agreed that adding ExactTarget’s mass emailing and marketing-automation capabilities to Salesforce’s feature set is a good idea, and some suggested that they comprise integral parts of “CRM 2.0.” But there were several questions about whether the investment was a sound decision.

The deal seems to pose challenges to other players in the cloud-based marketing business, including Adobe, analyst David Raab wrote:

Of course, Adobe already has a strong presence in Web site management and it keeps making noises about having a “marketing cloud”. Um, excuse me guys, but you really need email and marketing automation for that. 

Big-name backing could help adoption

Forrester analyst Shar VanBoskirk comes at the news from a different angle, noting that the deal will make it easier for IT dealmakers to approve contracts with ExactTarget, now that it’s becoming part of Salesforce:

Salesforce will make it easier for marketing departments to convince their IT and procurement peers of adopting ET.

The deal gets some negative reviews on the Salesforce investor side of things. “Shareholders are fed up with the continued dilution of its earnings and large acquisition related charges,” the Value Investor wrote over on SeekingAlpha.

By the numbers

Denis Pombriant, a CRM analyst at Beagle Research Group, thinks it made sense for many CRM providers to have focused on supporting customers in the years when the economy was not doing so well, but now it’s a good idea to go in a different direction:

Fast forward to this year and the economy is picking up steam and that means a more traditional approach to gaining new customers and an emphasis on sales and marketing. Sales we know had been the bread and butter of CRM so it was logical for the vendor community to go after marketing.

Structure 2010: Om Malik – Founder, GigaOM Speakers: Marc Benioff – Chairman and CEO, Salesforce.com

Structure 2010: Om Malik – Founder, GigaOM Speakers: Marc Benioff – Chairman and CEO, Salesforce.com

That’s what Salesforce has done, first with social media marketing and now with email and marketing automation through the ExactTarget deal, which makes the Salesforce Marketing Cloud worthy of the name.

But still, Pombriant thinks it makes sense for Salesforce to have gone for ExactTarget, given that Oracle just shelled out $871 million for Eloqua and that Marketo just had a successful public offering.

No, $2.5 isn’t cheap, particularly for a company expecting net losses in the quarters ahead, and Pombriant wondered if Salesforce couldn’t have just rolled its own versions of what ExactTarget can do.

  1. Full disclosure, I work for TIBCO. My take is that it shows that we’re headed for a post-CRM world where the line between marketing work and the sales funnel is getting very blurry. Both disciplines are expanding and overlapping each other.

    The acquisition shows that Salesforce sees this problem and knows that they’re not a good Marketing database. We wrote this up here:

    http://successfulworkplace.com/2013/03/01/blurring-of-the-marketingcrm-line/

    Now, with that said, Salesforce + ExactTarget still lack the real-time engine that allows for following increasingly mobile customers and arbitrating offers AND other engagement in the moments that matter the most.

    Secondly, they lack a loyalty layer that provides the permissioning that makes it all not-so-creepy.

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  2. Having marketing automation for a CRM product is the only logical thing to do. A very successful CRM company like Salesforce should have taken this decision a long time ago. What is unexpected was the acquisition of Exact Target and not Marketo, considering their previous interest in Marketo.
    This decision is a huge reinforcement to how much autmation is required in CRM systems. Small companies require it as much as large companies do. Marketo and Eloqua cater well to large businesses. Agile CRM(beta invites are finally being handed out!) provides email and marketing automation, along with social network integration built on top of the CRM itself. For small to medium businesses, that is definitely the way to go to save a whole bunch of money and effort.
    Of course, what this acquisition does to the interface is yet to be seen. Neither Salesforce, nor Exact Target had an easy user interface.

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