Oracle and RightNow: Unlikely Bedfellows or Long-Term Strategic Partners?

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When Oracle announced on Monday that it entered into an agreement to acquire RightNow Technologies for approximately $1.5 billion net of RightNow's cash and debt, some analysts and experts in the service industry had some immediate misgivings.

When Oracle announced on Monday that it entered into an agreement to acquire RightNow Technologies for approximately $1.5 billion net of RightNow's cash and debt, some analysts and experts in the service industry had some immediate misgivings.I just happened to be attending the RightNow Summit in Colorado Springs earlier this week. Although RightNow executives at the Summit declined to comment about the terms of the agreement, the general positioning is that the acquisition will enable a superior customer experience at every contact and across every channel.

In a press release, RightNow's CEO and Founder Greg Gianforte said "We look forward to combining our complementary capabilities along with maintaining and expanding our presence in Bozeman, Montana in order to better service our customers."

But some of the industry analysts who I spoke to at the RightNow Summit tend to disagree and said that the capabilities, as well as the two cultures, are anything but complementary.

Ian Jacobs, a principal analyst at Ovum for example, said that RightNow is not only a poor cultural fit, but he also wondered how RightNow's technology will join into that "endless morass" at Oracle. "The potential value is the integration into the broader set of solutions, but that is not who buys RightNow. They focus on the customer service element," he said. "That broader value will be harder to realize in the near term." Until that happens, Jacobs said that Oracle will still be selling supply chains to the customer service people.

Jacobs did say that he understands and agrees with Oracle's message, that cloud-based service will pave the way for cross-functional experiences in the enterprise. "If anybody is able to deliver on it it's oracle," he said.

Denis Pombriant said that while the cultural fit is important, that aspect of the acquisition can be overblown. "My belief is that the fit has to be between RightNow and the CRM group of Oracle. The CRM group is a bit different from Oracle at large and it's a culture of leadership."

Pombriant added that these are future-oriented situations that Oracle is trying to put together. "It's true that Oracle paid a hefty premium for the companies they've been buying, but I don't think they were going to get RightNow any other way and they have this industry leading technology and a vision and that's what they're buying.... Buying RightNow is like the equivalent of buying your R&D. It's already done."

Mitch Kramer, principal of Greenhill Analysis, also weighed in. He believes that the Cloud will help to minimize the integration issue. "Customers won't have to worry as much about integration as they had in the old days."

But he added that it's naïve for people to think that things will stay the same. "There are 2,000 companies that have made the investment in RightNow products to run service and while it's not as pervasive an investment as on-premise software, their roles and responsibilities are built on the way RightNow does things, and if that's going to change at all they will have to change the way they do business."

Finally, Marshall Lager, managing principal of Third Idea Consulting, also agreed that the two companies don't fit in the sense that RightNow approaches customer experience and CRM from the contact center and has been embracing social technology. "They're all about the customer experience. Oracle by contrast is a company that provides a wide range of options. It's their nature to drop a tech stack on their customers...the end customer is an after-thought," he said. "Oracle doesn't think about customer experience a lot. I don't think one [company] is better than the other, but they serve different markets and have different flavors."

What are your thoughts abour Oracle's acquisition of RightNow Technologies?

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