Advertisement
YOU ARE HERE: LAT HomeCollectionsBusiness

Oracle to buy RightNow for $1.5 billion

The acquisition will enable Oracle to expand its use of cloud computing, in which businesses get access to computing power through a network instead of in-house data centers.

October 25, 2011|By Benjamin Pimentel

Larry Ellison just paid $1.5 billion to secure a place in the cloud.

Ellison's Oracle Corp. on Monday unveiled a deal to acquire RightNow Technologies Inc., expanding its cloud-computing arsenal three weeks after rival Salesforce.com sought to minimize the tech giant's efforts in the major corporate IT trend.

Shares of RightNow soared $6.98, or 19.4%, to $42.94 after Oracle announced the pact with the Bozeman, Mont., company for $43 a share. Oracle shares gained 75 cents, or 2.3%, to close at $32.87.

Analysts quickly saw the deal as a significant move for Oracle as the Redwood Shores, Calif., company adapts to a changing corporate IT environment highlighted by the rise of cloud computing, in which businesses get access to computing power through a network instead of in-house data centers.

RightNow's prominence also highlights the rise of Web-based business applications and the use of social media in guiding business decisions.

Marc Benioff, chief executive of Salesforce.com, a leading software-as-a-service company, publicly criticized Oracle this month for not being focused enough on cloud computing and social media.

Oracle's business is still based mainly on licensing its data base and business applications software.

Meanwhile, other software companies, led by Salesforce, are pushing what is considered a less expensive system in which customers tap into business applications through the Web and pay a fee typically based on the number of users.

In a research note, Citigroup analyst Walter Pritchard called the Oracle move an "important defensive step," which could "signal more acquisitions" in the software-as-a-service industry.

IDC analyst Crawford Del Prete said the deal is "clearly targeted" at Salesforce's market. "Clearly more competition between the companies," he added.

Pimentel writes for MarketWatch.com/McClatchy.

Advertisement
Los Angeles Times Articles
|
|
|