Trefis | Nasdaq
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.
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%.