Oracle is a major presence in the customer relationship management arena, with its Oracle Siebel CRM and CRM On Demand products. One observer feels Oracle's entrée into the marketing side of things may be a “tipping point” for the adoption of marketing automation solutions.
“Companies around the world tell us that marketing automation is the most important sales and marketing investment they've made,” said Joe Payne, president-CEO of demand generation and lead-management company Eloqua. “I expect Oracle's entry to make a major difference in the attention paid to this sector. It's going to open marketers' eyes and, as a result, expand the market. This is exactly the type of movement this industry needs.”
The result may be a bigger penetration of marketing automation, which has been estimated at only 5% to 20% of companies.
“There is a lot of growth in the marketing automation arena,” Payne said. “It's still early, but I can say that this is the only business that is inevitable.”
Oracle declined to be interviewed for this article.
Also last month, CDC Software, an Atlanta-based company whose array of enterprise software includes CRM and demand-management solutions, announced the completion of a major investment in on-demand marketing automation company Marketbright. Like the Oracle-Market2Lead deal, the amount of funds CDC invested in Marketbright was not revealed.
In April, on-demand CRM company Salesforce.com announced its acquisition of database information provider Jigsaw Data Corp., with the $142 million all-cash deal closing sometime this summer. Salesforce, whose cloud-based applications enable sales reps to rate and nurture leads, said it now intends to become a player in the business-to-business database arena by virtue of its new acquisition.
MAKING A STATEMENT
“I think it is a statement by Salesforce that companies' contact databases are, in general, not strong, and that third-party data is critical as part of the core foundation of one's customer database,” said Jay Schwedelson, president-CEO of list management company Worldata.
In addition to the inevitable consolidation of the marketing automation arena—which many view as having an over-abundance of companies—the flurry of investment activity also may herald a much closer relationship between the sales and marketing functions.
“If you look at the sales and marketing funnel, people are envisioning a blend, a fusion,” said Geoff Rego, CEO and co-founder of Market2Lead. “Marketing is sales, for all practical matters, because no prospect wants to talk to the sales guys anymore. The buying cycle has changed completely.”
The Oracle deal was structured in an unusual way. Instead of buying Market2Lead outright, Oracle purchased only its intellectual property, to be blended into Oracle's CRM On Demand product.
Market2Lead's lineup of customers, which includes Cisco Systems, Citrix Systems, and Linux operating system provider Red Hat, may migrate to Oracle when the integration of marketing automation capabilities is complete, or to a new Eloqua platform informed by Market2Lead technology, Rego said.
Rego agreed with Payne that the deal may signal a tipping point in marketing automation penetration.
“We can't talk about a sales funnel any longer; it's a revenue funnel, and marketing is going to be involved in all the stages,” Rego said.
Rego said big deployments of Market2Lead technology reinforces marketing automation's centrality to revenue production. For most customers, he said, the time to close a deal typically accelerated by about 25%, and deal size increased by 10%.
But technology by itself is no panacea, said Richard Fouts, research director, IT markets and channels, with researcher Gartner Inc. That may be one reason why an overall Oracle suite of business solutions, one that also integrates marketing automation, may be attractive to companies.
“While technology enables lead nurturing to convert [prospects] to customers at a lower cost, it is not the complete answer,” Fouts said. “Those marketers I've talked to who have successfully implemented automation first treated lead-nurturing management as a business-process initiative, not a technology initiative.”
Eloqua has made commitments to Market2Lead to “inherit” those of its customers who wish to move to the Eloqua platform, honor their contracts and offer a money-back guarantee on subscription fees.
“As soon as Geoff takes care of his other customers, Market2Lead will shut its doors,” Payne said.