This morning Oracle announced its acquisitionof marketing automation software leader Eloqua in an all cash transaction valued at $871M. The $23.50/share price is a nice premium over where Eloqua has been trading since its IPO earlier this year.
While this is a beneficial outcome for Eloqua’s management and shareholder, I’m not sold for a moment that being part of the Oracle family is good for anyone else.
My thoughts are based on Strategic Communications Group’s (Strategic) standing as an Eloqua referral partner, our work with the Eloqua platform on behalf of a half dozen clients and my 20+ years working in technology and enterprise software. I’ve seen lots of Oracle press releases over the years touting the company’s buys.
1. I don’t for a minute fault Eloqua’s Board, Payne or other members of management for blessing this transaction. They are stewards for the shareholders and Oracle’s purchase price represents an exceptional valuation. Congrats to them on a job well done!
2. In his blog post Payne offers us the following: “…we believe that together we can accelerate the pace of modern marketing.” Ah, not quite.
Eloqua now enters a process to be consumed by a glacially paced global organization. There will be no acceleration of anything during the closing period for the transaction and the awkward integration phase.
Plus, the instant Eloqua disappears into Oracle the prospect for innovation dims. Companies like Oracle, IBM, HP and Microsoft invest the majority of their operational resources to maintain existing product lines with incremental improvements in feature, functionality and support. They tend not to innovate which is why they are forced to find it through acquisition.
3. Payne’s letter assures customers and prospects that “Eloqua’s management team and employees are expected to join Oracle and continue their focus facilitating excellence in marketing.” I don’t believe that one either.
Yes, they’ll stick around through the integration and perhaps for a time afterwards. Yet, Eloqua’s culture remained entrepreneurial even after the IPO. (Anyone remember the flash mob at the Experience conference?) This is why the company successfully attracted such a highly innovative team.
Oracle is certainly populated with smart, hard working and effective managers. However, the culture and expectations of employees is different.
Make no mistake, the Eloquans who are not downsized will soon bolt for the door in search of a different professional experience.
I am happy for Eloqua, its management and its shareholders, and I believe the community of corporate marketers who use the platform will remain in place and vibrant.
This is a dark day though in the world of marketing automation. A hearty share of innovation and entrepreneurial spirit just left the building.