The cloud trend in technology started fifteen years ago where the early players were moving fast to the cloud and even just four years ago analysts were critical of Oracle that they were late to the game. Oracle may have missed the big market moves to the cloud in CRM and HR to Salesforce and Workday, but it is top of mind for Oracle as the foundation for their future growth strategy in taking back CRM and HR and winning outright a new cloud game - the “marketing cloud”.
This marketing cloud marketplace is the new lucrative market and battleground for the coveted and growing set of marketing and sales applications. Oracle is investing heavily to win the battle for the marketing cloud, and the dividends are starting to appear.
In talking to analysts and customers a clear pattern is emerging that telegraph’s Oracle’s long-term play. They are building an integrated technology and business model that looks like Amazon Web Service (AWS) and Apple.
Technology Plan Be Like AWS
The 1990’s and 2000’s were all about the rise of the CIO and the IT organization. Today, it’s not about the CIO and IT groups, but mobile, consumer, data, and business driven outcomes such as winning new customers and keeping existing customers. With the powerful infrastructure now in place in most organizations to support low cost utility computing available from Amazon Web Services (AWS), businesses are able to quickly stand up fast and agile new and mission critical applications. This capability is rapidly extending to marketing groups who are now utilizing this new found compute power to build a whole new class of use cases and applications called the marketing cloud.
The marketing cloud includes core marketing functionality including data services, automation, targeting and content. This is in dark contrast to the old enterprise software business model of selling large multi-year sales. Look no further than the downward spiral of Jive once a leading company in enterprise marketing software. The failure of Jive and others to win the enterprise is due to the changing consumption patterns from businesses. Business no longer want an enterprise salesperson coming in proposing the “moon” with huge upfront costs and lots of hidden costs before any value is realized, they want software as a service aka SaaS.. Now it’s buy as you grow – this is the core value of cloud computing and it’s not going away.
The cloud has leveled the playing field and offers young startups the chance to compete head to head with old-line incumbents like Oracle. This pressure has changed the game for companies supplying enterprise software and hardware to businesses, and forcing Oracle to change too. Ironically, AWS is looking to be more like Oracle. At AWS recent confab #ReInvent they launched they’re own mega-database called Aurora to compete with Oracle.
Oracle Moving Fast To Change
Oracle has decided to draw a line in the sand and invest heavily in the marketing cloud with R&D. Through organic development, R&D, acquisitions, and partnerships, Oracle has assembled a formidable marketing cloud offering. R "Ray" Wang, founder and principal analyst of Constellation Research says “Oracle still has to find the right balance of partnerships, alliances, and acquisitions to serve the growing marketing buyer's needs while building on top of the Oracle stack”.
Oracle is moving beyond their database product and that is clear in their positioning. “We see Oracle in more and more marketing and CX deals as companies move beyond “create, read, update, and delete” in to the new world of “sharing, publish, collaborate, and assess” all done at the social layer says Wang.
This new digital disruption is what Oracle is moving toward fast and this isn’t about just “ad tech” it’s about a new connected consumer network – consumerization of businesses or global digital transformation.
Growth Plan Be Like Apple
With the consumer trends driving the digital transformation, Oracle has to change with it to have a viable profitable growth strategy. They are buying leading companies in marketing technology and integrating the offerings as a core part of the strategy for Oracle. The acquisition of Eloqua marketing automation, Responsys e-mail marketing and BlueKai data services have generated a great deal of buzz in the market and demonstrate that Oracle is serious about investing in and leading the marketing cloud.
A new direction for Oracle is forging new partnerships with startups in the ecosystem. This is part of Larry Ellison’s grand plan says Constellation’s Ray Wang. “Larry Ellison is one of the grand masters of chess in the tech business playing the game for the long run,” says Wang.
Oracle has also invested in making marketing applications simpler and easier to integrate. Dave Vellante, chief analyst with Wikibon and cohost of @theCUBE, compares of Oracle to Apple. Vellante points out that Oracle is looking more and more like Apple for the enterprise where they own the platform and offer integration and partnership tooling for apps.
“If you squint through the Oracle rhetoric you can see that their partnering and investing deals look to be similar to becoming the enterprise version of Apple’s app store and that’s a great business model if they can pull it off” says Vellante.
The Money Move Be Like Apple App Store
One thing Apple has shown is that the App Store makes lots of money. Oracle seems to be heading in this direction with how they developing their 3rd party ecosystem.
One example is the Oracle AppCloud, an API system and set of tools to allow tighter integration between functionality of Oracle and partner applications.
“Oracle has made impressive moves to lead in the marketing cloud.” Said Meagen Eisenberg, VP of customer marketing at DocuSign, who has aggressively utilized Oracle technologies to help fuel DocuSign’s high sales growth.
The investments to date have been in automation, data and tools. The result for marketers is an explosion of data and lead generation capabilities. What is needed next is a way to analyze the data to extract the signal from the noise. The head of lead generation at a large global company was recently quoted as saying. “We don’t need more leads, we need more intelligence to find buyers.”
Big Data Is Gold
Oracle has been nimble to add partners to fill product gaps such as analytics and data intelligence. Mintigo is an “AppCloud” partner selected by Oracle to provide predictive marketing intelligence to the Oracle marketing cloud. For instance, Sequoia Capital backed Mintigo helps Oracle customers use a vast pool of big data to identify buying attributes called customer DNA. With a data-driven intelligent analysis of who is actually buying and why, marketing and sales programs using the Oracle marketing cloud enhanced with Mintigo can produce dramatically improved sales results and ROI.
“Mintigo has built a native and integrated solution on our Oracle Marketing Cloud that can help deliver predictive marketing and lead scoring,” said John Stetic, Group Vice President of Product for Oracle Marketing Cloud. “This is a great example of an open platform with integrated, innovative solutions, that can simplify the marketer’s experience and help grow their business.”
Oracle Marketing Cloud customers can visit the Mintigo Topliners community site to install the application and begin implementing Mintigo predictive marketing in Eloqua. “Modern marketing in the enterprise is driven by data and insights. Mintigo brings data and predictive analytics directly into the Oracle Marketing AppCloud. I am excited Mintigo is the first predictive marketing application natively built using Oracle Marketing AppCloud,” said Tal Segalov, Mintigo Co-founder and Chief Technology Officer.
DocuSign’s Eisenberg is a believer in the Mintigo-Oracle value proposition. “We found that the creation of personas based on Mintigo’s predictive analytics and CustomerDNA™ helped get more engagement with qualified leads. Extending this to Oracle will open up a whole new breed of targeted campaigns. For example, I can now target a competitor directly across all my lead data by using the Mintigo data within Oracle’s marketing cloud. ”
Who Will Be Left Standing
We have seen that successful break out platform technology companies all have successful ecosystems. How fast can Oracle scale up their plan? Will companies trust Oracle with their business? What about competition?
Adobe had gone fully to a cloud model from boxed software license, a truly remarkable and necessary shift. Oracle, Salesforce and LinkedIn are now building enterprise clouds for marketing and sales. According to Wikibon analyst Dave Vellante, cloud business models drive the technology to mirror the business not the IT department. “There will lots of competition for the marketing and sales clouds and with developers and businesses adopting cloud technology the shift will move towards business outcomes which is the code word for sales.”
Indeed, Oracle is not standing still in the battle for the marketing cloud, but neither are other major players. As previously reported in Forbes, Salesforce acquired RelateIQ for $390M this summer, and with LinkedIn’s Bizo acquisition, Adobe, IBM and others are rushing to compete for the marketing cloud dollars. The winner is yet to be determined, but the marketers will surely benefit from an explosion of investment and innovation in the marketing cloud.
ROI Wins It All
The number one conversation in the industry top tech circles especially around the new consumer experiences with social media is ROI (return on investment). The next cloud battle ground for large cloud players and enterprise software companies will be the data driven and large scale “cloud services” for the marketing and sales cloud. The promise of the marketing cloud is the same that is driving the huge success of Amazon Web Services (AWS) to seamlessly turn on and scale up new ways to drive sales and happy customers.
If Oracle could pull off the “Apple for the enterprise software” then it will be checkmate for their competitors. The key will be in building a credible 3rd party application marketplace.
Follow me on Twitter: @Furrier
Recent live coverage with @theCUBE at the recent Oracle Open World #OOW14
