R "Ray" Wang
R "Ray" WangNews Analysis: Salesforce.com Acquires Radian6 For $316M
Salesforce.com Bets Big On Social Media Monitoring And Socialytics
Salesforce's definitive agreement to acquire Radian6 continues the consolidation of 100's of social software vendors in the marketplace. Radian6, a social media monitoring and customer engagement platform, provides tools for companies seeking to harness the power of social media and related social networks. Most customers utilize Radian6 for brand management and monitoring, sales and lead generation, Social CRM (SCRM), customer service, competitive intelligence, trend analysis, and crisis management.
The company's focus on the enterprise has paid off with over half of the Fortune 100 deploying Radian6's products and 1700 customers worldwide. Marquis customers include AAA, Dell, GE, Kodak, Molson Coors, Pepsico, and UPS. The deal represents a $256M cash and $50M stock offer. The following is a first take analysis of how Salesforce.com envisions applying the assets of Radian6 for its customers to:
- Bring social analytics or socialytics to the Salesforce.com offerings. Sales and Service Cloud will gain new capabilities in social media monitoring and engagement. Today's companies seek the tools to bring social customer strategies with existing CRM processes and organizational structures. A social media monitoring and engagement platform provides a critical tool for success in Social CRM (SCRM).
Point of View (POV): While this acquisition does not solve the lack of a good analytics platform in Salesforce.com today, a Radian6 acquisition delivers social analytics or socialytics capabilities for Salesforce.com. customers. Social media monitoring delivered by Radian6 provides the first step in the journey to engaging customers in social channels. Advanced users often find they need to couple a sentiment analysis tool such as Clarabridge, Lymbix, SPSS, or Textlytics to improve accuracy.
Because Salesforce.com customers have proven to be more cutting edge in adopting disruptive technologies, natural synergies will emerge among these CRM pioneers. Whether Salesforce.com can build an SCRM solution in parallel remains the bigger question.
- Apply learnings to the Force.com platform. Salesforce.com hopes its developers will build new products using the Radian6 platform. The intent is to add social elements into future products.
POV: Force.com currently lacks the social graph required to build social software. Learnings from Radian6 should help the Force.com team identify the key additions to the platform required to enable social software development. Developers can expect these offerings to take at least 9 to 12 months to be incorporated into the platform. More middleware components will be required in the long run.
- Build a bridge from Chatter to public social networks. Chatter today remains within the closed walls of the enterprise.Salesforce.com sees opportunities to apply Radian6's engagement platform to expand the capabilities of Chatter. Expansion into public social networks opens new insights into the enterprise.
POV: Users seek feeds from Facebook, Twitter, YouTube, LinkedIn, and other social media. Radian6's engagement platform can quickly be applied to expand Chatter. The integration will remove a key deficiency with Chatter, an inward only focus. However, Salesforce.com will have to ensure that the offering meets enterprise class standards and addresses the challenge of information overload in activity streams.
The Bottom Line: Salesforce.com Going After The Five Pillars Of Consumer Technologies For
Salesforce.com has built from its base in the Cloud and expanded into Mobile and Social. Marc Benioff's strategy reflects bets on the five pillars of consumer tech entering the enterprise.. While this acquisition does not solve the lack of a good analytics platform in Salesforce.com today, a Radian6 acquisition delivers social analytics or socialytics for Salesforce.com. customers. The only key pillar missing in its acquisition strategy is unified communications and video. One can expect this pillar to be hot on the medium term acquisition short list.
Meanwhile, Salesforce.com has proven to be quite successful at integrating acquisitions. Customers can expect most of the team including R&D, service and support, marketing, and sales teams to remain in tact. Despite any reassurances received during the acquisition, customers of Radian6 should take the following actions:
- Review existing contracts and lock-in beneficial terms and conditions. Have your contract reviewed and identify areas where you may have a special arrangement. Work with Radian6 to begin an early renewal in the maintenance contracts to secure terms and sweetheart deals for the next 3 to 5 years.
- Secure feature requests and product enhancement promises in writing. Expect the team to be distracted over the next 3 to 6 months with post merger integration. Best to get guarantees in writing so that product roadmaps contain key feature commitments.
- Attend Radian6 Social 2011. The announcement comes a week prior to Social 2011, Radian6's user event and unconference. Users can expect more information to come first hand at the event and perhaps a guest appearance by Marc Benioff. If you haven’t registered, please do so now. Now's the time to get face time with key execs. (Note as of 3/30/2011 Salesforce.com has confirmed Marc will be at Dreamforce Paris)
Your POV.
Radian 6 users, do you think your better off under Salesforce.com or remaining independent. Are you already a Salesforce.com user and working with Radian6? How's your experience to date? Do you think Salesforce.com can continue the momentum at Radian6? Do you think $316M is overvalued?
Please post or send on to rwang0 at gmail dot com or r at softwareinsider dot org and we’ll keep your anonymity.
Related Resources And Links
20110330 IDG News Service - Chris Kanaracus "Update: Salesforce.com buys social media monitor Radian6"
20110330 ReadWriteEnterprise - Klint Finley "Salesforce.com Acquires Radian6: Are Business Ready for the Social Data Firehose?"
20110330 ZDNet S0cialCRM: The Conversation - Paul Greenberg "Salesforce.com Acquires Radian6: The Uber Move Continues"
20110330 Information Management - Valerie Valentine "Radian6 to be acquired by Salesforce.com"
20110330 Voices of CRM / TechTarget.com - Barney Beal "Salesforce.com to acquire social media monitoring provider Radian6"
20101208 Software insider - R "Ray" Wang "News Analysis: Salesforce.com Buys Heroku For $212M – Shows Commitment To Next Gen Apps"
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