As Oracle's (
ORCL
) earnings reveled, its new business initiatives are doing quite
well and the company has managed to successfully integrate and
monetize its acquisitions. The company has its sights set on the
social media marketing industry, and believes that a lot of the
future software and IT expenditures will be driven by marketing
expenditures as social media marketing rivals traditional marketing
methods. It continues to expand its marketing software business
with the acquisition of marketing automation firm Eloqua for nearly
$871 million.
Eloqua's expertise is in marketing automation and is used in
campaign profiling and management, testing, execution, measurement
and lead nurturing. Eloqua automates the marketing process, making
it easy for marketers to immediately respond to a buyer's behavior
online. This acquisition comes soon after its acquisition of
DataRaker
, a cloud based analytics platform to transform utility meter
readings and customer information into actionable intelligence, and
build smart meters and sensors.
Check out our complete analysis of Oracle
Oracle's Cloud Business Paying Off
Oracle has had significant success entering new businesses via
acquisitions in the past, and this pattern repeats this quarter
with cloud revenues coming in at $230 million. While this is not
very significant now, it can be in the future as Oracle had key
wins in the customer relationship management (
CRM
) and human capital management (HCM) space. To put this number in
perspective, Salesforce.com, the top cloud CRM player in the world
had revenues of $2.3 billion in 2011, and we estimate it to be $2.9
billion this year. Oracle had key wins in the CRM and HCM
space including clients like Abercrombie & Fitch, Edwards
Air, Expedia, Macy's, T. Rowe Price, United Airlines, U.S. Bancorp,
Whirlpool and Xerox.
Oracle In The Cloud And Social Media
The Eloqua acquisition will add to Oracle's social cloud SaaS
product portfolio, which consists of other acquisitions such as
Vitrue, the social marketing platform provider, Collective
Intellect, the cloud based social intelligence solutions and
Involver, another social media development platform.
This gives the company an extensive social media marketing
campaign development platform along with analytics capabilities.
While there are many players in this market, the key distinction is
the relationship it acquired when it bought out Involver. This
company is a Facebook marketing developer and a technology provider
for Facebook's internal marketing team. It pioneered social apps by
creating the first social app suite on Facebook, and is
currently leading the industry with Social Markup Language (SML)
and Visual SML. This allows front-end developers to achieve
what Involver calls a "pixel-perfect" application and helps
marketers customize applications. It also provides an intuitive
interface to build the campaign with no requirement for coding.
We expect these acquisitions to drive Oracles cloud business in
the future and we currently have a
$40
Trefis price estimate for Oracle
, which currently stands nearly 20% above its current market price.
Database, middleware and application software accounts for nearly
80% of its value, while enterprise server and storage hardware
accounts for more than 10%.
Understand How
a Company's Products Impact its Stock Price at Trefis