Now that we've all had a bit more time to digest the implications, how are we all feeling 24 hours later about Salesforce.com's plan to splash out $2.5 billion on email marketing firm ExactTarget?
The first reaction from Wall Street was none too promising with Salesforce.com stock down sharply (although later rallying), while the inevitable first legal claims and challenges were off the starting blocks within hours.
But the reaction from the IT industry analysts is much more upbeat, albeit with some guarded reservations that need to be factored in.
So what do we think?
New readers start here: Salesforce.com has grand ambitions to grow another billion dollar cloud business based around the Marketing Cloud.
This strategy is built around its desire to be the BFF to the Chief Marketing Officer (CMO) as the new powerhouse in IT procurement, a premise reiterated by CEO Marc Benioff yesterday:
"Marketing is rapidly evolving. Gartner says that by 2017, CMOs are going to spend more on technology than CIOs. We found that out personally, because as we travel the world on our Customer Company Tours, or network [with] customers individually, we continue to hear and see them invest in major new ways of marketing.
"Over the past couple of years, Salesforce has broadened its marketing area quite considerably. We’ve of course acquired a tremendous company of Radian6. We’ve also acquired a tremendous company Buddy Media. And we’ve learned more and met more CMOs and talked to more CMOs and learned more about what they’re doing then we could possibly imagine."
The Buddy Media and Radian6 purchases to which Benioff refers got the firm some nice social monitoring and tracking tech, but there's more to marketing than that, as he readily admits:
"We’ve been super strong in a number of really critical areas and that is we’ve been strong in listening with Radian6. We’ve been really strong at publishing with Buddy Media and we’ve been really strong in advertising with Social.com.
"But we recognize that we have to get stronger in critical areas like e-mail and also to a key point in area of marketing automation at lead nurturing. That’s an area that’s very fast growing for our customers."
Here's what we're going to do
OK, so the plan then becomes to make one really big purchase that radically enhances the marketing functionality that Salesforce.com can offer.
Hence, ExactTarget. Benioff rationalises the choice thus:
"ExactTarget not only is number one in e-mail, but have the fasting growing marketing automation and lead nurturing company as well, which is Pardot. And Pardot, you can see it on the app exchange is probably the highest rating that involves market automation companies.
"We see a tremendous opportunity here with our customers in the marketing, in B2C CRM, in e-mail marketing, in lead automation and marketing automation and lead nurturing as well as in the fundamental marketing to next generation connected products and connected devices, all of these things are made possible through ExactTarget as well as Pardot.
"We absolutely anticipate after a full review by our technical team that we’re in six months, we’ll have superior functionality, capability and made an integration to Salesforce [better] than any other marketing automation vendor and that we’re going to have a world-class highly competitive solution for our customers and we have a great new choice in marketing automation and lead nurturing."
In summary, this is the big one, the one that's going to propel Salesforce.com on to become what Benioff is already calling number one in enterprise marketing:
"We absolutely have a huge goal. Of course, we have a multibillion-dollar sales product line. We’ve got our service cloud coming into a $1 billion product line. We have a clear trajectory in the third product line heading into $1 billion very rapidly, which is our platform and now we have a fourth. And this is a clear product strategy for Salesforce to take it into the future."
So that's the plan. But will it work?
Over at Forrester, Shar VanBoskirk makes the case that the coming together of Salesforce.com and ExactTarget may raise issues for some marketing decision makers.
She predicts a decline in what she dubs "email excellence" as a result of the acquisition and post-acquisition processes. She also flags up a fear that the integration of the two firms will slow down:
the already much-needed unification of the disparate technologies and data structures underlying ET's Email, Audience Builder, Automation Studio, Social Engage, and Mobile products. Integration with Salesforce is likely to take precedence over unification in the near term.
VanBoskirk also expects some cultural clashes to manifest to clients between the East Coast-based ExactTarget and the West Coast-based Salesforce.com:
We think ET clients used to the warm, mid-western nature of their account teams might find the aggressive, silicon-valley nature of SFDC a jarring influence. Culture matters and ET knows it. We'd definitely rather work with a firm that cares about client and employee smiles as well as success, than one proud to poke fingers in its competitors' eyes.
Over at Gartner, research director Julie Hopkins completely gets the rationale behind the acquisition - which is perhaps just as well given how often that Gartner 'CMO more powerful than CIO' prediction gets wheeled out these days:
Email communications remain a critical part of how organizations engage their audiences. Whether communications are transactional or marketing in nature, they reach consumers semi-seamlessly across devices, can leverage the big data companies are increasingly collecting and harnessing, link actions taken tightly back into the consumer record (feeding the grand insight loop), and meaningfully drive to other components of online and offline programs.
Regardless of company size, audience, or industry, email is a hard-working vehicle that many companies are still working to perfect. In short, getting closer to a leading email company makes sense if you’re a company built on helping your customers engage their customers better.
But Hopkins too raises concerns about aspects of the integration between the two firms:
There is overlapping functionality that must be reckoned with. There are ExactTarget customers who work with Salesforce.com’s competitors who are certainly pondering the impact on their current setup. There are two brands, rich with equity, that will live alongside one another…for now. All of this will need to be dealt with.
The wider world
Then of course there's the wider market landscape impact.
Benioff went out of his way when announcing the proposed deal that this signals an end for now of Salesforce.com on the acquisition trail:
"What you’re going to see is probably us taking a vacation from M&A for anywhere between probably 12 and 18 months and that’s really because we’re going to double down and focus on the success of ExactTarget."
Clearly that's sensible given the scale of this one and the somewhat sniffy initial reaction it got from Wall Street which has been airing more and more questions about the Salesforce.com balance sheet.
But Salesforce.com is upping the stakes here and that will have a knock-on effect. Will it strengthen the chances of the likes of Marketo coming under friendly persuasion or hostile fire from other acquisitive firms, such as Oracle perhaps?
Forrester's VanBoskirk suggests further market consolidation as a result:
By making a bold move into not just automation, but digital media, Salesforce will raise pressure on Adobe, IBM, Microsoft, SAP, and other traditional enterprise application providers to make similar moves, raising the valuations of Responsys, Neolane, and Silverpop. Salesforce can now monetize both seat licenses and media CPMs, and clearly wants to create a billion dollar business line in the Marketing Cloud. We are likely to see further consolidation this year in response, meaning that marketers will have fewer choices overall, and fewer choices in marketing-technology specific providers.
Gartner also expects to see more CMOs who are:
saddled with increasing influence over the business, and who are working hard to make sense out of the providers and solutions that support their digital marketing initiatives.
(Gartner's offering some free research for just such an occurrence which can be found here - worth a peek given that even the most budget constrained CMO can stretch to the admission price!)
So we reckon what?
So what are we concluding from all this?
Well, it's a bold move by Benioff and Co - but then we'd expect nothing less, even if Wall Street went a bit wobbly at first.
The rationale behind the acquisition is sound and brings a welcome reminder of the importance of email as a marketing channel in an age where Twitter is obsessively de rigueur.
There are clearly lots of things that need to be addressed in terms of organisational and functional integration, but with ExactTarget CEO Scott Dorsey reporting directly into Benioff, any issues arising will at least go straight to the top.
There's a huge commonality of customer base between the two organisation, but of course there are some ExactTarget users who are not Salesforce.com customers. How those clients are managed will be critical, especially given the prediction by Benioff that increased native integration with Salesforce.com will be what will deliver the best marketing automation proposition.
And that last point also raises the question of how other Salesforce.com partners and ExactTarget rivals will react to all this. On that one, Benioff is publicly at least ready to let the market decide:
"The AppExchange is a dynamic marketplace [where] people are constantly coming and going like any marketplace. We’re constantly evaluating the correct and appropriate way to build position to our customers to the ecosystem. We understand that and you can see how it changes and evolves over time as any other ecosystem.
"Based on how we are working with our partners - whether we’re competing with them, whether we’re partnering with them, whether they are complementary to us, whether they complement our strategy - that ecosystem has changed and has changed since it was introduced."
Alongside the wider market landscape consolidation impact, this could be one of the more interesting side effects of the move.
As Salesforce.com moves into more and more sectors and expands the functionality of its existing offerings, so too it heads more and more into competition with existing partners. Something's gotta give. (And if anyone says "co-opetition" at this point, I will scream.)
But for now - and bearing in mind the deal has yet to go through - this is a high-profile, high-impact, high-potential move by Salesforce.com.
It's big. It's brash.
And it's very Benioff.
Disclosure: at the time of writing, Salesforce.com is a premium partner of diginomica.