First shot fired by Oracle in cloud field service management bidding war?

Profile picture for user slauchlan By Stuart Lauchlan July 31, 2014
Summary:
Did Oracle just fire the first shot in the next round of M&A activity in its ongoing tit-for-tat battle with best frenemy Salesforce.com with its acquisition of field service managment firm TOA Technologies?

Did Oracle just open up the next front in its ongoing tit-for-tat battle with best frenemy Salesforce.com with its acquisition of field service managment firm TOA Technologies?

Who is TOA? Well for starters,  it stands for Time Of Arrival and the firm delivers cloud-based solutions that coordinate customer service with delivery and repair people in the field.

Founded in Ohio by Israeli immigrants Yuval Brisker and Irad Carmi in 2003, the firm has 500 employees, operates in 24 countries, manages more than 120 million service calls a year and reported 2012 sales of $41 million. Customers include DISK Network, Vodafone, Ricoh and Virgin Media and Gartner ranks it very highly in the inevitable Magic Quadrant.

Screen Shot 2014-08-01 at 10.14.03
Source: Gartner

Financial terms of the Oracle deal were not disclosed. Last July, Technology Crossover Ventures paid $66 million for a minority stake in TOA.

While stressing that it’s still examining the roadmap, Oracle plans to integrate TOA’s offerings with its own Service Cloud.

David Vap, Oracle vice president for product development, confirms:

Companies want to offer customers a unified and highly engaging experience each time they interact with them. Field service is a critical aspect of customer service and by integrating TOA with Oracle Service Cloud, Oracle will uniquely offer enterprises the ability to coordinate face-to-face service interactions from the contact center to service scheduling and delivery.

This integrated pitch will undoubtedly be sold as a competitive differentiator against Salesforce.com, which works with the likes of ServiceMax for its field service capabilities.

TOA had been pursuing a closer relationship with Salesforce.com and enhancing its ETAworkforce product for Salesforce.com users,  but whether this will remain the case once the Oracle takeover goes through is unclear.

The acquisition will also plug some gaps in the Oracle portfolio’s funcationality. While noting that Oracle Siebel provides what it calls “a broad suite for complex on-premises deployments of customer service, sales and support”, in October last year Gartner warned:

There is no multitenant SaaS offering, and Oracle's Siebel CRM for customer service and support is not participating in the move to Oracle Fusion Applications, although the vendor does offer Field Service in Oracle Managed Cloud Services, which Oracle can manage at the customer facility, at a partner facility or at an Oracle facility. Siebel Field Service is also available through partner-managed cloud services offerings.

Currently, there are no live implementations of mobile Open UI for Field Service (but there are for sales), and it's optimized for tablets, not smartphones. Additionally, the new disconnected mobile application is not finished yet, but it is being beta tested with several customers. Customers must be on Siebel version 8.1.1.9 to use Open UI. ORS is one of the more expensive scheduling options, and there are currently few live implementations of Siebel Field Service integrated with the latest version, ORS 2.1.

Fresh tensions in field service management

But Salesforce.com is clearly in the line of fire here. Yap boasts:

Oracle Service Cloud and Oracle ERP cloud solutions with TOA will transform customer service operations, allowing them to achieve operational excellence and improve productivity while exceeding customer expectations.

The addition of TOA expands Oracle's ability to provide end-to-end personalized customer service solutions with the addition of critical face-to-face field service interactions, enabling visibility into customer history throughout the customer relationship lifecycle.

The combination of Oracle Service Cloud and TOA is expected to create the most complete Customer Service Cloud, modernizing customer service operations and driving superior customer satisfaction.

Underlying the corporate statement, it’s clear that this is Oracle opening up a new front in its ongoing (tense) detente with Salesforce.com. The two firms spent much of 2013 doing tit-for-tat acquisitions to beef up their marketing cloud portfolios. Will the same now happen in field service?

van
If so, then eyes will inevitably turn in the direction of the likes of ServiceMax, already tightly wed to the Salesforce.com platform to the extent that ServiceMax CEO Dave Yarnold has described its offering as a native Force.com application.

Salesforce.com is also an investor in ServiceMax along with the likes of Kleiner Perkins and Trinity Ventures.

Of course at present it’s all just (inevitable) speculation that Oracle's move will spark a new bidding war in the field service sector.

And as of yesterday, ServiceMax was being phlegmatic about the Oracle development with CMO Stacey Epstein noting on social media:

Gotta love it when Oracle takes out your biggest competition. Great validation of our space!

My take

Ready, steady, go on another cloud ‘arms race’?

Maybe. It’s certainly a hugely lucrative market sector with enormous potential for reinvention.

In its latest figures on the subject, Gartner puts the revenue for packaged field service dispatch and workforce management software applications, including maintenance and service revenue, at approximately $1.2 billion in 2012, with a compound annual growth rate of 12.7%.

It’s a savvy first move by Oracle if this is to be the next battleground. Your move Mr Benioff?

 

Disclosure: at time of writing, Oracle and Salesforce.com are premium partners of diginomica.