What RightNow’s acquisition means for other CRM vendors

Last week, as the annual user conference of RightNow was about to begin, the attendees and rest of world who follow CRM were shocked to learn about the acquisition of RightNow by Oracle. A few were worried as well. Theoretically, this transaction provides RightNow a scale similar to what Salesforce and Dynamics CRM have at their disposal. Practically, given the history of previous acquisitions by Oracle, this is not the likely scenario. As an active member of the CRM community, I am wondering what this acquisitions could mean for other CRM vendors such as Microsoft and Salesforce in terms of opportunities & threats. Here are my $.02 cents:

Threats: RightNow is a very customer centric company and as a result, has a dedicated customer base. At a higher level, it reminds me of Great Plains (a mid sized ERP vendor that was purchased by Microsoft in early 2000s). Oracle finally has a cloud based CRM application that its users actually love. It could use RightNow as a platform to drive future CRM roadmap. The risks here are BIG (abandoning Siebel as its flagship CRM product) but the rewards could be HUGE (RightNow could become “Serviceforce” of the CRM industry).

Opportunities: The acquisition of RightNow takes a valuable competitor out of the CRM ecosystem and provides to other vendors a win-win outcome. Microsoft has huge service oriented assets such as the latest cloud based CRM 2011 release and customer care solutions for call centers. Salesforce, on the other hand, has a chance to go deeper and visible with its service focus.

• Assuming that RightNow is merely integrated to the current CRM products by Oracle, there is an opportunity to actively target these customers. Leveraging the lessons learned in integrating Great Plains Software, Microsoft knows what it takes to retain customers. Salesforce is another vendor with a similar background.
• Assuming that Oracle indeed leads with RightNow, it creates confusion for users of all CRM applications by Oracle such as Siebel. Microsoft with a blend of single-code cloud, on-premise and hybrid deployment models, can present a compelling value proposition for such customers to try out.

One of the benefits of cloud presented by cloud vendors is the fact that customer can walk away any time (well, typically there are agreements and penalties in place just like your mobile service provider). If indeed cloud makes customer churn easy, it will be interesting to watch how RightNow’s acquisition plays out in coming months.

What are your thoughts on this aquisition?