Oracle Buys Eloqua. The Game is Afoot.

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Marketing Automation

As today’s acquisition of Eloqua by Oracle fills the Twitter stream and floods the presses, I thought it was relevant to revisit the current state of the marketing automation industry, and discuss what this news means to the rest of the industry, and more importantly, what this means for Act-On Software.

The market for marketing automation is huge and the fact that Oracle is entering shows things are just starting out. Oracle obviously sees the potential to take Eloqua, a $100M company and make it a $1B company. Penetration at the high end of the marketing automation space is less than 30% saturated, and the mid market is less than 3% penetrated, according to analyst David Raab.

Growth in the industry was 60% from 2011 to 2012 — up from 50% from 2010 to 2011.  In fact, the marketing automation space is expected to be at least as rich as the CRM market (which today has 3 companies with over $1B in revenue, and many others doing over $100M in revenue).

It is important to note that barriers to entry into marketing automation are high. It is not easy to build a state-of-the-art marketing automation product. Many companies have tried, most have fallen by the wayside, only a select few (including Eloqua and Act-On) have figured it out and as a result they are growing like gangbusters. Today, Act-On is the fastest growing company (by revenue growth and customer growth) in the marketing automation industry, growing over 318% in 2011 (according to Raab & Associates) and continuing triple-digit growth in 2012.

It is interesting to note that Oracle, with thousands of engineers, chose to buy rather than build. The acquisition of Eloqua by Oracle validates the maturity and the growth potential of marketing automation.