Oracle Acquires Assets of Market2Lead - Lessons Learned

Oracle Acquires Assets of Market2Lead

First, viewing this move as anything other than assets picked up at a fire sale would be a mistake. If this acquisition were strategic, it would have to have obvious benefits for Oracle. It would have also warranted more than a 4-sentence press release with no press follow-up: http://www.oracle.com/market2lead/index.html. 

Second, Market2Lead (M2L) is not integrated with CRM On Demand (SFDC Competitor) or any other Oracle platform out of the box. There are several leading MAP (marketing automation platform) vendors that already are.

Third, as far as I am aware, M2L never had its own email facility (my sources say they used Exact Target), so any issues with this facility in Siebel Marketing, which has been described as not “matching up” against the leaders in this space (http://blog.siriusdecisions.com/Blog/bid/42636/Oracle-Purchases-Market2Lead), will remain or they have to pay Exact Target to fix them.

Fourth, M2L is widely regarded as very difficult to use. As they bled cash in the waning hours of their existence, how many of the good engineers stuck around? Without them, the work that will need to be done to address this issue and the integration of with Oracle offerings will take longer. Thus, there is likely a long wait for Oracle users or current M2L customers to see improvement in this area.

Finally, it is obvious this purchase wasn’t executed for sales. If M2L was competitive, profitable or had a top-notch customer list, this would have been a purchase, not an asset sale. Thus, no help on this front either.

This is a good example of what over investing has done to the MAP market. The top companies in this space (revenue wise, not features) have taken obscene amounts of cash and not made a profit or made very little. Thus, to acquire one, it is going to take a lot of money to satisfy initial investors. In the end, however, a potential purchaser of an over funded start up is essentially buying a cost burden that has proven it cannot scale profitably. So the only prudent thing about Oracle’s approach is the fact that they didn’t over pay. They likely bought garbage, but they paid what it was worth by buying the assets at a fire sale rather than buying the company. There ultimately could be a nugget of code that makes this purchase worthwhile at a bargain basement price, but that is the extent of it.

The folks that really get stuck here are the customers, and I think there is a lesson to be learned: Don’t confuse revenue and funding with success. Now these customers have the expense and pain of having to switch platforms or stay with a dying one. The time and money to acquire new technology will be significant. Moreover, contact histories, nurturing actions and other critical marketing data will be lost forever in the process.

Selecting a demand generation, marketing automation, CRM or other vendor for any key piece of business infrastructure can be daunting. Unfortunately, buyers are neglecting to ask about the stability of the company during this process. Profitability and sustainability matter. Revenue without profit equals an unsustainable business model, especially for companies that have been around a while. Make sure the vendor you choose can demonstrate to you that they aren’t only as stable as their next funding round and that they have profit to sustain them in addition to reference accounts and analyst opinions. The acquisition of M2L assets by Oracle is a good example of what can happen when this important step is skipped.

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