Salesforce.com, the world’s largest SaaS CRM company, paid a massive premium for marketing software maker ExactTarget. The acquisition, the largest ever for Salesforce, has raised some eyebrows and investors are taking a dim view of the purchase. Shares of Salesforce are down over 8% in mid-day trading.
So why ExactTarget?
Salesforce already placed strategic bets on social media to offset the slowing growth in the traditional CRM business. This is evident by the fact that Salesforce bought Buddy Media, a provider of cloud based software solution to help brands manage their social media presence and marketing campaigns, for almost $700 million in 2012 after acquiring Radian6 for $340 million in 2011. The next major channel for Salesforce to penetrate in a big way was email marketing – enter ExactTarget. Like Salesforce, ExactTarget sells its software directly to marketing departments and boasts high profile customers such as Coca-Cola and Nike. These customers use the software to plan and manage digital marketing campaigns. Given the overlap in the customer base, yet differentiated offerings, the two companies are highly complementary.
The big question is: can these recent acquisitions shift traditional supply based marketing to more demand based marketing?
We have high hopes that Salesforce will effectively combine their traditional CRM with Buddy Media, Radian6, and ExactTarget to give consumers what they need and deserve: a truly omni-channel marketing software platform. If Salesforce’s Marketing Cloud is the first complete and effective marketing suite, they will get a sales meeting with every CMO in the world.