What I think of Salesforce's decision to buy Exact Target for $2.5 billion

12 thoughts on “What I think of Salesforce's decision to buy Exact Target for $2.5 billion”

  1. With the PC we had the equivalent of MYOS(Make Your Own SW) the Spreadsheet. So far mobile seems to be focused, in companies, on BYOD. The HW site of the picture. So companies seem to bolt it on, but with mobile comes context which is about SW. None of the established players seem to reckon it. Guess that means I’m skeptical, specially with more email folders and autonomous systems as an example.

  2. Interesting acquisition.. The test of the acquisition would depend on how fast SFDC can convert the non SFDC accounts in ET to SFDC.. I thought ET had lost steam in recent years..

  3. Om,

    I am actually surprised at this acquisition. I think the market overreacted, but why wouldn’t SF be focused on getting a marketing automation solution like Hubspot/Marketo instead? That seems like a faster growing segment.

    I also think that Salesforce should be more focused on upgrading its aging UI rather than acquisitions. Benioff is focused on growth by acquisition, rather than improving its core business.

  4. $2.5B….really? Losing money – I understand rev multiples, but wow. Also – did you see the share distributions? Love how the top execs names were mostly the VCs who personally got themselves into the deal. Make money for their fund, make money personally – and some of the original founders are diluted to less than 1%. Wow – not fair.

  5. Not a very impressive move, considering how late it’s coming. Large companies like Salesforce should have been caught up in the automation movement much earlier. This acquistion, however, goes on to prove how important automation is to any CRM system. Small companies are slowly catching up too. CRM products like Agile CRM offer email and marketing automation on top of the CRM system itself, for small and medium sized businesses.

    The advantageous part for Salesforce of course, is the features provided by not only ExactTarget itself, but also by Pardot and iGoDigital(which will greatly help BuddyMedia, I’m sure). Expect to see a great profit for Salesforce next quarter.

  6. CRM 8 times revenue for a guy to buy companies and duct tape them together.

    I cannot believe any expert would say this guy is great.

    Not only is he just buying companies, he is over paying for the companies 50% premium. Wow

    This stock will be 2 times rev soon.

  7. Om,

    Very nice piece. It just feels like a overpayment. I’d also be concerned about the post acquisition integration skill set (as you state in your profits point). Google and Oracle seem to be fist class at integrating acquisitions. But as we’ve seen with HP and many many others, the acquisition route is a graveyard of shareholder value decline.

    Best

    Ian

    1. Ian

      It seems like Salesforce has a better track record than most but not everything is/does go according to plan. I find this deal expensive too, but it makes more sense than some of the other deals they have done. I do agree – so many acquisitions should give everyone a reason to pause.

This site uses Akismet to reduce spam. Learn how your comment data is processed.