Oracle to buy Responsys for $ 1.39 billion in cloud software push

Monday, 23 December 2013 01:09 -     - {{hitsCtrl.values.hits}}

REUTERS: Oracle Corp., the world’s No. 2 business software maker, said it would buy web-based marketing software maker Responsys Inc for about $ 1.39 billion to bolster its cloud computing offerings. Oracle, led by billionaire Larry Ellison, has been focusing on cloud software to fend off competition from nimbler rivals such as and Workday Inc, which offer web-based products at prices that often undercut Oracle. Four-decade-old Oracle, which came late to cloud computing, has created sales teams targeting specific cloud competitors and is trying to be a one-stop shop for operating systems, databases and software programs over the Web. Responsys makes cloud-based software that businesses use to manage their marketing campaigns across e-mail, mobile and the Internet. Its customers include LinkedIn, Southwest Airlines, and United Healthcare. “(The Responsys acquisition) further expands the company’s cloud initiative, which remains a key ingredient to Oracle’s recipe for success over the coming years,” FBR Capital Markets analysts Daniel Ives said in a note to clients. The deal comes exactly a year after Oracle said it would buy Eloqua, a maker of cloud-based marketing automation software, for $ 810 billion. Earlier this year, acquired ExactTarget, another marketing software maker, for $ 2.5 billion. Cloud computing, a broad term referring to the delivery of services via the Internet from remote data centres, is a favourite with corporate technology buyers because it is faster to implement and has lower upfront costs than traditional software. The Responsys deal could also trigger consolidation in the software industry in 2014 as larger firms explore new areas of growth, while smaller vendors continue look at strategic acquisitions. “In our opinion, this acquisition makes it more likely that NetSuite Inc or SAP AG would acquire Marketo,” Ives said, noting that neither have made big acquisitions in digital marketing. Marketo, which has a market capitalisation of $ 1.25 billion, also makes marketing software for businesses.