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Salesforce.com aims for next $1 billion business with ExactTarget buy

Chris Kanaracus | June 5, 2013
Salesforce.com will "double down and focus" on building out its marketing software arm, says CEO Marc Benioff.

"We certainly plan to continue to support all of our partners in the AppExchange," Salesforce.com chief operating officer George Hu said in an interview. "We've always had an open philosophy."

However, Salesforce.com's ability to offer a unified marketing platform will result in many customers making the switch from other marketing products, Hu added. "We think customers are going to be very excited about it."

Hu declined to say whether Salesforce.com had considered buying other companies besides ExactTarget. "This is the company we've been focusing on for a while now."

While it may be surprising that Salesforce.com waited until now to buy a company like ExactTarget, it had its reasons, according to Hu. "We have been learning a lot about CMOs in the last few years," he said.

Salesforce.com's previous acquisitions of Buddy Media and Radian6 provided "a huge catalyst" for the ExactTarget deal, he added. "We had many deeper conversations with the CMO that gave us the education and understanding of the market that allowed us to move forward with such confidence."

Overall, Salesforce.com will be "in co-opetition with Marketo and all other marketing automation products," but the stakes will vary depending on the situation, Wang said.

As a whole, Salesforce.com's Marketing Cloud product family "plays a central role as an aggregator for the CMO," he added. "So if you are very specialized in marketing analytics, it's not an issue. If you are doing core marketing automation and campaign management, you are in direct competition."

But one observer questioned whether Salesforce.com is overpaying for ExactTarget.

"I look at this and I shake my head," said analyst Denis Pombriant, managing principal of Beagle Research. "ExactTarget has done a great job over the years of expanding its offering. But I just question the $2.5 billion, that's a huge amount of money for something like this. A company like Salesforce could have built this."

There's also a bit of product overlap between ExactTarget's and Salesforce.com's product line, such as in analytics, Pombriant added. "The question that keeps popping into my mind is why they didn't finish building out the suite themselves," he said. "For $2.5 billion you can hire a lot of people. Obviously they thought this was the best approach for them."

That said, "it's a quality acquisition," and an important move for Salesforce.com to make, Pombriant said. "Marketing is the tip of the spear in CRM these days."


 

 

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