Salesforce.com Agrees to Acquire ExactTarget for $2.5B
Salesforce.com Agrees to Acquire Exact Target for $2.5B
Hailing today as an “historic day for cloud computing,” Salesforce.com chairman and CEO Marc Benioff announced this morning that the company has entered into a definitive agreement to acquire marketing software provider ExactTarget for approximately $2.5 billion in cash. Salesforce.com will commence a tender offer for all outstanding shares of the email marketing provider and expects the deal to be completed by mid-summer.
“Our whole industry is changing. Mobile and social have entered the cloud,” Benioff said this morning in a conference call. “[ExactTarget] has been along on the ride with Salesforce and we saw in them a perfect partnership. I've never been more inspired and motivated about what we can do to automate CRM.”
In a Magic Quadrant analysis of how CRM companies performed in lead management released in April, Gartner Research identified Salesforce.com as a serious competitor, though a niche player in the field, lagging behind best-of-breed providers with turnkey campaign and lead management functions. In the same report, ExactTarget was hailed as a “visionary” in marketing automation and lead management.
“We want to be the number one CRM company, and we have been number one in service and sales, but we have to be number one in marketing, too, “ Benioff said.
Yvonne Genovese, Managing VP of Gartner For Marketing Leaders, says that the ExactTarget deal will allow Salesforce to maximize the effectiveness of its previous acquisitions of Radian 6 and Buddy Media, both of which constitute Salesforce's Marketing Cloud product, giving the CRM giant presence in the areas of publishing and social media listening.
“This is a big deal for marketing. There is a lot of attention being paid [by providers] on marketers spending more to automate what they're doing,” she says. “All these providers know the marketing area has a lot of money. Companies are allocating more than 10% of revenue on marketing budgets, and that's a big number. By way of comparison, IT department budgets are 2% to 3% of revenue.”
Other players in the CRM and marketing automation space agree that the ExactTarget acquisition is a watershed deal. “While Benioff has long indicated that marketing technology is the next big thing for his company, he's now confirming that commitment with today's announcement,” says Stephane Dehoche, president and CEO of marketing technology provider Neolane.
Brad Wilson, CEO of Emailvision, thinks the high-profile deal may inspire marketers to take a more studied approach to their email operations. “Email is still the most profitable channel, but it can be done more intelligently—not just pulling a list,” he said. “This [deal] could cause more people to think about, ‘Am I missing something in my marketing mix? Can I be more effective as a marketer?”
Benioff remarked that the ExactTarget deal had its beginnings in the servicing of one of its largest clients, Bank of America. “There was this other company doing great work with them in the area of mobile and email,” he said, “and that company was ExactTarget.”
Salesforce's acquisition of ExactTarget reflects increasing consolidation among providers of CRM, marketing automation, and email marketing technologies. Last October, for instance, ExactTarget itself acquired marketing automation provider Pardot; and last December, Oracle acquired marketing automation provider Eloqua.