Salesforce.com is acquiring marketing software company ExactTarget for $2.5 billion. This is Salesforce.com’s biggest acquisition in its history. It also makes Salesforce a player when it comes to marketing software.
Marc Benioff, Salesforce.com chairman and CEO, emphasized the importance of software in marketing. He said in a prepared release, “The CMO is expected to spend more on technology than the CIO by 2017.”
ExactTarget is an email marketing and marketing communications software provider. Its 6,000 clients include brands such as Nike and Coke.
The acquisition fills a void in Salesforce.com’s marketing offerings. Salesforce.com previously acquired Buddy Media and Radian6, gaining a foothold in social-media marketing software. But up until now it has lacked a full-range marketing suite that goes beyond social media marketing. ExactTarget — with its emphasis on email marketing, marketing automation and mobile marketing — fills a large gap in what was missing.
CRM analyst Paul Greenberg writes at ZDNet, “What makes this one of salesforce’s most important acquisitions ever is Marc Benioff’s proclamation last August on the Q2 2012 financial results that the Marketing Cloud is their next ‘billion dollar’ … business. That was a lot of pressure for a company that had only a strong social media monitoring platform and a Facebook advertising platform under the rubric ‘Marketing Cloud’ and nothing else, even though what they did have was outstanding quality within its class.”
Now, analysts say, Salesforce.com has much more of what it needs to offer customers a broader “marketing cloud” — instead of a narrower “social marketing cloud.”
Aimed at Enterprise Market, But Can Benefit SMBs
This acquisition is mostly about the enterprise market. But eventually it can benefit small and midsized businesses that are developing an appetite for marketing software.
According to analyst Brent Leary, Salesforce.com’s marketing offerings up until now largely have been aimed at enterprise buyers. Larger companies have demanded solutions because they face increasing complexity in marketing.
“But SMBs also face a complex marketing environment,” he says.
“As I see more SMBs looking to change the way they market to today’s customers, I also see them taking advantage of social, mobile, and cloud technologies,” Leary wrote in an article earlier this year in CRM Magazine.
The subtext here is that there’s benefit for the SMB market, ultimately. That’s because ExactTarget had earlier acquired Pardot, a marketing automation software suitable for small to midsize business. This means Salesforce.com will gain marketing automation software for SMBs in the 25 – 500 employee size category, Leary says.
Salesforce is paying a 52 percent premium on ExactTarget’s share price. ExactTarget had $292 million in revenue last year, with a $21 million loss. The transaction is expected to close by July 31, 2013.