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Oracle ‘catching on to cloud importance’ with £940m RightNow acquisition

But analysts warn of culture clash between the companies

Oracle is catching on to the importance of cloud computing with its $1.5 billion (£941 million) acquisition of RightNow Technologies, announced yesterday.

That is the verdict of analysts who noted Oracle had ended up in a position where it needed to act fast to keep up with the growing trend. However, the experts also warned of what they called a severe culture clash between the companies.

"A fifth of European enterprises are implementing public cloud offerings while another half are considering or evaluating public cloud," said IDC research director Douglas Hayward.

"Oracle's founder and CEO Larry Ellison once described early cloud offerings as 'idiotic' and overhyped, yet now his company is a paying billions to keep up with the curve."

Oracle had needed to embrace cloud "because it's demonstrably where end users want to go", Hayward said.

Forrester analyst Diane Clarkson said the acquisition was "being widely interpreted as a shot across Salesforce's bow". RightNow was "well positioned to give Oracle a customer service offering for the mid market", she said, because it was "faster to deploy and easier to change than traditional on-premise offerings".

The success of the acquisition would in part depend upon Oracle's ability to separate different technology lines, she said. It needed to "differentiate between products such as knowledge management and chat," Clarkson said. "This will not be an easy task in this complex and ever-changing customer service technology landscape."

But William Band, a principal analyst at Forrester, warned that there was a major clash of business ethos between the two firms, which could cause serious problems to the merger.

"The big risk to this deal is that the corporate cultures of Oracle and RightNow could not be more different," he said. "Oracle's bare-knuckle approach to sales and how it treats customers is the complete opposite of RightNow's ethos of client centricity and flexibility."

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