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.
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.