October 24, 2011 – Oracle will pay $1.5 billion in cash and debt for cloud customer service provider RightNow Technologies Inc. in part as an effort to strengthen its recently rolled out Public Cloud.

RightNow focuses on customer experience across contact channels. Its Customer Service Cloud is geared at customer interactions and data for call centers, social networks and the Web, according to RightNow's website.

Thomas Kurian, EVP for Oracle's development division, cited the importance of RightNow's services with Oracle Public Cloud in a news release, as well as with Oracle's other cloud plans to give a broader range of offerings for sales force automation, HR, talent management, social networking, databases and Java.

Years in the making, Oracle gave a full show of its Public Cloud earlier in the month at its OpenWorld conference. The Oracle Public Cloud runs on Oracle Engineered Systems and comes with a host of connections and capabilities for other vendor solutions, applications and databases, according to a news release. The public cloud enables business applications to run on-premise and in the virtual environment simultaneously, and deployment of Java and Oracle Database applications without the need for rewrites.

Eric Knipp, analyst with Gartner, says the proposed deal should quell discussion of Oracle making a pitch for RightNow's bigger rival, Salesforce. In addition, offerings from RightNow will increase Oracle's presence in the customer cloud space and possibly make up for some of the space left from the still-languishing Fusion Apps launch, Knipp says.

"Advanced forms of multi-tenancy are valuable, no matter how much Oracle's Larry Ellison may have pooh-pooh'ed them for the last few years and specifically on stage a few weeks ago at Oracle OpenWorld," Knipps says, later adding, "[Salesforce CEO] Marc Benioff should be doing a little 'I told you so' victory dance before worrying what Oracle can do now that it appears to take the multi-tenant threat seriously."

RightNow expects to combine complimentary capabilities with Oracle plus expand its customer service and company headquarters in Bozeman, Montana, according to CEO Greg Gianforte.

The deal would pay out $43 per share to RightNow and has been unanimously approved by the RightNow board of directors, though must still go through customary approvals. It was the second deal in the last week for Oracle, which entered an agreement to buy unstructured data management solution provider Endeca Technologies Inc.

 

Justin Kern is senior editor at Information Management and can be reached at justin.kern@sourcemedia.com. Follow him on Twitter at @IMJustinKern.