Salesforce May Go Shopping in Response to Oracle Deal
The marketing software concern for which the software giant will pay $871 million might have also made a logical fit at Salesforce.com, though Salesforce might have had to take on some debt to pay that price.
Anyway, there’s speculation that today’s deal for Eloqua may amount to a starting gun for a new round of acquisitions in the cloud software space. In a note to clients today, Karl Keirstead, an analyst with BMO Capital Markets, argues that Salesforce may answer Oracle with some acquisitions of its own.
“In our view, the deal is a modest net negative for Salesforce.com, making it incrementally tougher for them to pick off Oracle’s Siebel client base,” Keirstead wrote this morning. He also believes that about 50 percent or more of Eloqua’s customers are also Salesforce.com customers.
That might spur Salesforce into action on the acquisition front, he says. Having already made significant acquisitions of Radian6 and Buddy Media in the last two years, Salesforce might move on two privately held cloud-based companies in the marketing field.
One is Marketo, a fast-moving company that specializes in revenue performance management. It raised $50 million in a Series F round led by Battery Ventures last year, bringing its total capital raised to $108 million. Its other investors include Institutional Venture Partners, InterWest Partners, Mayfield Fund and Storm Ventures.
Another possible target for Salesforce, Keirstead argues, is HubSpot, a social media marketing outfit based in Cambridge, Mass. It raised $35 million in a fifth round of funding last month. The round brought its total capital raised to about $101 million, and Salesforce had invested in earlier rounds. Its other investors include Google Ventures, Sequoia Capital, General Catalyst Partners, Matrix Partners, Altimeter Capital and Cross Creek Capital.
The point, Keirstead says, is that Salesforce will seek to build its own “marketing cloud” offering. Of course, Salesforce doesn’t have the financial flexibility that Oracle does. It has only $1.4 billion in combined cash and short- and long-term investments as of the close of its most recent quarter. That’s almost pocket change compared to Oracle’s $34 billion as of the quarter reported earlier this week.