News Analysis

The Salesforce acquisition of ExactTarget: What to expect now

Lena J. Weiner

Salesforce.com's $2.5 billion acquisition of cloud-based marketing software company ExactTarget is unlikely to lead to any major support or integration woes for customers of the two firms. But it's still unclear whether the internal cultures of the two cloud computing mainstays are a good fit for one another.

The acquisition has not been a cause for concern for Kevin J. Alexander, vice president of marketing at Sky Angel, a Christian broadcasting service and an ExactTarget customer. Alexander, who has seen software vendors he uses get gobbled up in the past, expects ExactTarget to continue providing solid support to customers when it's needed. "My experience with acquisitions is that the [acquiring firm doesn't] want to change too much," he said. "Scaring off customers isn't good for revenue."

While Sky Angel has yet to try Salesforce's software, Alexander said he has heard good things about the company and thinks they will continue developing the ExactTarget product over time. "[ExactTarget already] had a relationship with Salesforce, [and] they'll now be able to enhance it even more," he said. "It can be a good thing."

Bri Shaw, e-mail deployment manager at DOT Foods, which is a user of both Salesforce and ExactTarget, feels confident that the merger will work out well and that customer support offerings will remain intact. "Stuff usually stays as it was, then gets better as time goes on," she said, referring to her past experience with software acquisitions.

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Salesforce announced it plans to acquire ExactTarget last week. Experts says the mega-deal should boost Salesforce's clout in the marketing technology space. ExactTarget boasts more than 6,000 customers, including Coca-Cola, Nike and Gap, which use the product to manage digital marketing initiatives.

Salesforce CEO Marc Benioff has said Salesforce won't acquire any more companies for the next 12 to 18 months. While ExactTarget represents the biggest merger that Salesforce has undertaken thus far, industry observers predict that the company's next spate of acquisitions will be smaller in nature.

But will quirky midmarket favorite ExactTarget and buttoned-down, enterprise go-to Salesforce be a good a cultural fit for each other? Probably -- as long as Salesforce takes largely a hands-off approach with ExactTarget's internal operating style, according to Gerry Brown, a senior digital marketing analyst with Ovum, an IT research and consulting firm. "I think [the companies] are upbeat and confident of success of the ExactTarget and [Salesforce] combination," he said in an email.

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On the software front, Salesforce and ExactTarget are likely to integrate very easily. Both are cloud-based systems, and the two companies have been partners for a long time. ExactTarget is available on Salesforce's AppExchange, so the two companies share some customers. The hardest technical aspect will likely be to integrate Buddy Media and Radian6 into the ExactTarget suite, but even that is unlikely to present too many challenges, according to Brown.

The ease of software integration probably was a large part of the reason why ExactTarget was targeted for acquisition in the first place. ExactTarget was selected due to the "longevity and intimacy of [the] relationship," Brown wrote. "ExactTarget is a 'known' entity that harbors few surprises and secrets."

Salesforce also targeted ExactTarget because of its relatively large size compared to others in the market. By purchasing a bigger vendor, Salesforce will have an even bigger impact on the digital marketing industry -- which is red-hot right now, Brown said. This is unlikely to be an explosive or dramatic takeover, and customers can anticipate very few changes in how ExactTarget operates in the coming months and years, he said.

"ExactTarget will operate as an independent strategic business unit targeting its current markets, with the Salesforce and ExactTarget product integrations going on in the background," Brown predicts. From the fates of Salesforce's other acquisitions, he doesn't predict a mass exodus of ExactTarget employees. There is, however, the issue of ExactTarget's famously quirky "Orange Culture."

With 14 offices scattered around the world, all decorated in bright orange, ExactTarget has prided itself on being a risk-taking, in-your-face and do-your-own-thing kind of company, offering unusual perks like massages during breaks and monthly mingles with drinks and snacks.

If ExactTarget continues operating independently, it's likely that its offbeat culture will continue. But if Salesforce decides to absorb ExactTarget into its more conservative, sales-oriented culture, the Orange Culture just might become a casualty of the acquisition. As Brown puts it: "You can't run two corporate cultures at the same time."


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