Explanation of the RightNow Deal

November 16, 2012

The Stock Blog posts its perspective on Oracle’s purchase of RightNow Technologies in “Oracle’s RightNow Bid could Breed More SaaS M&A.” The brief write up explains:

“Companies in the software-as-a-service business were higher on speculation that Oracle‘s acquisition of RightNow announced Monday means more M&A [mergers and acquisitions]in the industry.

“Oracle (ORCL) said it would pay $43 per share, which amounts to an enterprise-value-to-revenue multiple of 5.5x compared to a 4.5x average multiple for a basket of SaaS companies, according to FBR Capital Markets. FBR says Oracle’s diversified software and hardware portfolio ‘positions the company well to weather the uncertain economic climate. We believe Oracle’s engineered systems (Exadata and Exalogic) strategy, coupled with Fusion Applications, should allow the company to take market share from its rivals, namely IBM, Hewlett-Packard, and SAP. We reiterate our Outperform rating and $38 price target.'”

Interesting. The piece goes on to note some other players in the Software as a Service and customer service markets. It also mentions that RightNow’s earnings look healthy. Well, that’s good.

But what about RightNow’s natural language processing? We want to know what Oracle ultimately plans to do with the technology behind RightNow CX, the company’s cloud-hosted customer experience suite. Currently, information about the product is available here, at Oracle’s site. RightNow was founded in 1997, and is headquartered in Bozeman, Montana.

Cynthia Murrell, November 16, 2012

Sponsored by ArnoldIT.com, developer of Augmentext

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