Oracle aims at Salesforce in buying RightNow

CFOworld - Software giant Oracle is acquiring RightNow Technologies Inc. for $43 a share, or a total of about $1.5 billion, to expand its Internet-based offerings and offer a challenge to customer relationship management powerhouse Salesforce.com.

Oracle said in a press release that RightNow's customer service cloud approach helps organizations work across its call centers, the Web, and social networks.

The RightNow board unanimously approved the transaction, which is expected to close late this year or early next year, subject to RightNow shareholder approval and regulatory approvals, Oracle said. The price is net of RightNow's cash and debt.

Oracle said it "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."

According to RightNow's CEO, Greg Gianforte, "RightNow's products add leading customer experience capabilities that help empower companies to interact with and provide a consistent experience to customers across channels." He said his company would be "maintaining and expanding our presence in Bozeman, Montana in order to better service our customers." Oracle is based in Redwood Shores, Calif.

Oracle already has offerings similar to the cloud-based customer relationship management applications that RightNow sells. But rather than just tracking sales cycles in CRM, RightNow has been repositioning itself as a "customer experience management" provider across various platforms. And to that end, Oracle's acquisition launches a direct attack on rival Salesforce.com, which in 2008 added customer-service capabilities with the acquisition of Instranet. Salesforce.com also has embarked on a broad strategy centered on tying enterprises to the social web.

In a presentation released Monday, the IDG News Service reported, Oracle described how RightNow's products will work as part of a continuum involving its Siebel marketing software, ATG Commerce e-commerce platform, supply-chain applications and Endeca unstructured data search technology. That last operation is part of a pending acquisition announced only last week.

All told, the combination will help companies gain new customers and keep them longer while lowering operational costs, Oracle said in its statement.

The presentation provided some examples of the benefits RightNow customers have gained. Some 40% of RealNetworks' customers resolve issues online, without dealing with a service representative, while call-handling times for Overstock.com have fallen 25%, the statement said.