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Salesforce.com Acquires CRM Analytics Capabilities

Written By: Predrag Jakovljevic
Published On: July 22 2014

Salesforce.com has somewhat quietly acquired RelateIQ, provider of an analytics-based cloud customer relationship management (CRM) software platform, for nearly $400 million (USD) in stock. The RelateIQ deal is salesforce.com’s largest since last year’s $2.5 billion purchase of cloud marketing automation software vendor ExactTarget.
The young startup, which reportedly recently raised $40 million at a $245 million valuation, has promoted itself as a data-driven alternative to salesforce.com and other CRM platforms. Its apps analyze a user’s inbox and calendar to find contacts, merge relevant data, and keep track of customer interactions.
Salesforce.com, already the CRM market share leader, is striving to stay ahead of both established software giants (such as Oracle, SAP, and Microsoft) and upstarts such as SugarCRM and Zoho. Still, the leader has holes to fill if it truly wants to supply customer analytics and not just social sentiment analytics. Also, salesforce.com’s general business intelligence (BI) capabilities are still not differentiating—so an acquisition of Tableau or QlikTech would not be too surprising either.
RelateIQ has a snazzy user interface (UI) and use case, but does it logically or technically fit into the core salesforce.com user experience, and will it prove costly for salesforce.com to merge the two products? It is possible that salesforce.com will make it a Salesforce1 Platform-type mobile add-on solution, with no expectations of merging. It may also make a new foray into the freemium market, targeting the individual entrepreneur, sales rep, etc., as a seeding strategy for core apps/platforms.
Salesforce.com is spending significant cash (which it has some of) to buy a company with less than $5 million in revenues. RelateIQ is niche and “nice to have” and will likely not positively affect salesforce.com’s bottom line at all. So, when the profit is going to come in earnest remains a protracted open-ended question. Earlier in 2014, PTC did also fork out significant “dough” for ThingWorx, a company which had similar measly revenues, but the Internet of Things business opportunity that ThingWorx might create for PTC seems much vaster than what RelateIQ can do for salesforce.com.
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