Ever since the advent of Excel spreadsheets and database management capabilities were offered on early PCs, the desirability of giving sales people tools that can make their lives easier and more productive has been a big market. From the first contact management software to Salesforce.com, this the goal of optimizing, monitoring and tracking the entire sales process has been an inviting target for solutions providers.
In fact, as we all know sales force automation has become a very big market, and with the announcement that Oracle will be buying BigMachines, a leading CRM cloud-based Configure, Price and Quote (CPQ) sales order automation solutions provider, the market just got a lot more interesting to say the least.
A natural for Oracle as it expands its role in enterprise process automation
This move by Oracle deeply into the marketing organizations of its customers is a natural as it augments Oracles own products for marketing, sales, customer service and e-commerce. It comes at a time of industry consolidation in the all important CPQ space with IBM having already purchased Slectica and Camelion Software and Infor having acquired TDCI.
While BigMachines already has an impressive customer list that includes several Fortune 500 companies amongst its 275 installed base, Oracle can now open doors around the world, and adds a really nice arrow to its quiver in its competition with the likes of SAP, Salesforce.com and IBM. Clearly this market is one where ‘Big’ matters.
For those not familiar with BigMachines’ CPQ Cloud, it accelerates the conversion of sales opportunities into revenue by automating the sales order process with guided selling, dynamic pricing, and an easy-to-use workflow approval process, accessible anywhere, on any device. The problem it addresses is very real. Despite years of sales automation innovation, the facts are that many companies with current sales automation tools still rely on manual, cumbersome and disconnected processes to convert opportunities into orders. As Oracle notes, “This creates errors, adds costs, delays revenue, and degrades the customer experience.”
BigMachines’ CPQ cloud is sales automation on steroids. It allows sales people to create an optimal quote, which enables them to easily configure and price complex products, select the best options, promotions and deal terms, and include up sell and renewals, using automated workflows.
Another interesting facet of the acquisition is the BigMachines’ solutions come in two varieties. Their lower-end BigMachines Express product is designed for SMBs (entities with up to 500 employees). It is built on Salesforce.com’s Force.com platform. Why all of this makes sense is because the BigMachines big machine for large enterprises is based on Oracle and Java. Plus, from a competitive standpoint, Oracle will also benefit from the fact that BigMachines has integrated its solutions with Salesforce.com, SAP and Microsoft applications, which takes the sting out of discussions about major forklifts and stranded investments.
Business will “continue as usual” for partners and Oracle intends to “continue to invest in the development and support of existing integrations with third party sales force automation systems,” according to an FAQ document on the acquisition.
While a bit of an eye chart, below is how it all fits together once the deal, terms of which were not disclosed, closes as expected at the end of the year.
In the FAQs supporting the announcement, Oracle says it has been working on cloud-based CPQ (configure, price, quote) software already but buying BigMachines will help it get this functionality into its Sales Cloud more quickly. It elaborates in stating that the combination with Oracle’s enterprise-grade cloud solutions, including Marketing, Sales, Social, Commerce and Service Clouds, Oracle and BigMachines will create an end-to-end smarter selling cloud solution so sales personnel are more productive, customers are more satisfied, and companies grow revenue faster.
Not surprisingly both parties to the deal are delighted.
“The fundamental goals of smarter selling are to provide sales teams with the information, access, and insights they need to maximize revenue opportunities and execute on all phases of the sales cycle,” said Thomas Kurian, Executive Vice President, Oracle Development. “By adding BigMachines’ CPQ Cloud to the Oracle Cloud, companies will be able to drive more revenue and increase customer satisfaction with a seamlessly integrated process across marketing and sales, pricing and quoting, and fulfillment and service.”
“BigMachines has developed leading CPQ solutions that serve companies of all sizes across multiple industries,” said David Bonnette, BigMachines’ CEO. “Together with Oracle, we expect to provide a complete cloud solution to manage sales processes and deliver exceptional customer experiences.”
For anyone who has ever been a sales person or a sales manager, you know how time consuming the “paper work” (to use an old expression) can be. It has only become that much more daunting as the components of a bid have become more complex, and the customer’s expectations that you can respond quickly to a change in their requirement have grown. In fact, responsiveness has become an even bigger determinant in winning bids.
Big is better. And, given the vast resources of Oracle the acquisition price may likely end up below what it cost CEO Larry Ellison to wage his successful America’s Cup campaign, but that does not minimize the impact this will have in the CPQ space specifically but the CRM market overall. It is likely to be big.
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