Oracle announced today that it will buy RightNow Technologies, a provider of cloud-based customer service, for $43 per share or approximately $1.5 billion net of RightNow's cash and debt.
The deal, which analysts are describing as a surprising move, is expected to close by late 2011 or early 2012.
Founded in 1997, RightNow is headquartered in Bozeman, Mont., employs more than 1,000 people, and serves nearly 2,000 organizations worldwide. Its Customer Service Cloud and RightNow CX suite help organizations deliver exceptional customer experiences across call centers, the Web, and social networks.
"Oracle is moving aggressively to offer customers a full range of cloud solutions, including sales force automation, human resources, talent management, social networking, databases, and Java as part of the Oracle Public Cloud," said Thomas Kurian, executive vice president of Oracle Development, in a statement. "RightNow's leading customer service cloud is a very important addition to Oracle's Public Cloud."
Esteban Kolsky, principal and founder of ThinkJar, says Oracle's acquisition was unexpected and may have been triggered by a few factors.
"I was surprised by the acquisition. Oracle said many times in public and private before that this was not interesting to them," Kolsky says. "I see it as a combination of things...One part of this is reactionary to Salesforce's acquisition of Assistly. The fear of being left out of a customer that was not an issue before by a key competitor is worrisome. One part of this is the desire to have different offerings for different client types (large enterprise vs. SMB) since their needs are different."
Kolsky adds that Oracle's decision to acquire RightNow Technologies should be monitored during the next two to three years "to see if it develops into something."
"I am not quite sure yet it will, and I am very concerned about the technical integration issues as well as co-existing with other applications already in Oracle's bag-o-tricks," Kolsky says.
Paul Greenberg, managing principal of The 56 Group and author of CRM at the Speed of Light, also doubts the wisdom behind Oracle's acquisition. "While I thought that Endeca and InQuira were smart acquisitions by Oracle, I'm not really sure about how smart this one is," he says. "On the plus side, RightNow has been around a long time, the CX platform is a solid offering on the market...Honestly, though, I didn't think that Oracle was that needy in the on-demand customer service offerings via Oracle CRM on Demand, which was more than adequate, though, granted not nearly as strong as RightNow. Additionally, with [Oracle CEO] Larry Ellison's recent railing against multitenancy at Open World 2011, I'm a bit surprised that he bought one of the leading advocates of multitenancy with a cloud offering based on it."
Despite his reservations, Greenberg says he hopes the acquisition will be prove fruitful. "I hope it works because I want the industry to succeed," he says. "But I think there are a lot of factors at play in this one that make me less sure of its success, though if it succeeds I will be glad for both of them."