More Market Consolidation With Oracle Acquiring RightNow: More Questions Asked Than Answered

Kate Leggett
Vice President, Principal Analyst
October 24, 2011

It’s exciting to see the news of yet another acquisition in the world of customer service with the announcement of  Oracle’s intent to acquire RightNow. Today’s contact center ecosystem is complex and comprised of a great number of vendors who provide overlapping and competing capabilities. I’ve previously blogged about what these critical software components are. The reason why these acquisitions are good is that they align with what customers want: a simpler technology ecosystem to manage from both a systems perspective and a contractual perspective. And suite solutions available from unified communications (UC), CRM, and workforce optimization (WFO) vendors are evolving and include comprehensive feature sets. These vendors have either built these capabilities out or acquired them via M&A activity — and we expect more M&A to happen.

Now, to focus on the RightNow acquisition. This acquisition, at a high level, is a win-win for both companies:

  • RightNow gets the big-company marketing, professional services, and sales reach of Oracle to grow beyond its current run rate and compete more effectively with salesforce.com, Microsoft, and to a lesser degree SAP. Forrester rated RightNow as a leader in our Forrester Wave™ for CRM and CRM customer service suites.  
  • Oracle gets a full-featured, on-demand customer service solution, which has been missing from its current offering. It also helps build out Oracle’s “cloud” story.  Have a look at the following graphic:

However, the success of this acquisition will reside in the details:

  • There is a mismatch between the Oracle and RightNow company cultures; this threatens to put RightNow employees and customers at risk unless this culture gap is bridged.
  • Oracle has many overlapping and competing assets for CRM and customer service as well as for point solutions (e.g., email, chat, and knowledge management). Oracle must position RightNow as a unique offering in its current solution portfolio and must clearly message and steer customers to the right solution for their particular business need (for example, if I am a customer needing knowledge management, do I buy InQuira from Oracle or RightNow from Oracle? What about a chat solution? Do I buy InstantService from ATG/Oracle or from RightNow or the Oracle product?).
  • Oracle must focus on the right product integrations that make sense in the short term and overcome architecture and codebase (.NET and JAVA) differences.
  • In the long term, Oracle needs to choose and explain what overlapping solutions it wants to invest in going forward to simplify and better target its product portfolio (Oracle OnDemand? Fusion? RightNow? Or a combination of these solutions?).

Attention to these sales, marketing, product direction, and customer service issues will make this acquisition successful.

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