By Aurindom Mukherjee
Dec 20 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 Salesforce.com 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, Salesforce.com 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 centers, is a
favorite with corporate technology buyers because it is faster
to implement and has lower upfront costs than traditional
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
"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 capitalization of $1.25 billion,
also makes marketing software for businesses.
Oracle's offer of $27 per share represents a premium of
about 38 percent to Responsys' Thursday closing. Responsys
shares were trading at $26.94 on the Nasdaq on Friday.
Oracle priced the deal at about $1.5 billion, net of
The deal, which has been approved by the board of directors
of Responsys, is expected to close in the first half of 2014.
Oracle shares were down marginally at $36.65 in midday
trading on the New York Stock Exchange. Marketo shares jumped
nearly 10 percent.
The Responsys deal, Oracle's seventh acquisition in the
year, is also its biggest since it acquired network gear maker
Acme Packet for $1.7 billion in February.