Salesforce.com Makes Its Biggest Acquisition Yet, Buys ExactTarget for $2.5 Billion
Salesforce.com just announced that it will make its biggest acquisition yet: It will spend $2.5 billion to acquire the cloud marketing company ExactTarget. — Salesforce is paying $33.75 a share.
Context & Ripple Effects
Salesforce had already been building around enterprise social and customer-service tools: it completed the Buddy Media acquisition in 2012, then cut staff in both Buddy Media and Radian6 later that year. Its February 2013 EntropySoft purchase also added content-integration capability, making the ExactTarget agreement a materially larger extension of an acquisition-driven product strategy.
The $2.5 billion price makes ExactTarget the largest acquisition in Salesforce’s history and places cloud marketing alongside those earlier social, service and integration investments.
First-order effects
- ExactTarget shareholders are offered $33.75 per share, while Salesforce takes on the cost and integration responsibility for its largest proposed acquisition.
- Salesforce gains a cloud-marketing business to combine with the social-marketing assets it had assembled through Buddy Media and Radian6.
Second-order effects
- Oracle, which had been sharpening enterprise social-media services alongside Salesforce, faces a competitor with a broader set of marketing-related cloud assets.
- Salesforce’s earlier staffing cuts at Buddy Media and Radian6 put pressure on management to show that separate marketing acquisitions can be integrated into a coherent product and operating structure.
Third-order effects
- If large cloud vendors continue to buy specialized marketing and customer-engagement providers, the market will tilt toward suites assembled through acquisition rather than stand-alone point products.
- The deal reinforces acquisition-led expansion as a way for enterprise software companies to enter adjacent cloud categories quickly, with integration execution becoming the limiting factor.
The trend: Enterprise cloud vendors are using acquisitions to assemble broader customer-engagement suites spanning social, service, content and marketing tools.