Oracle buys Collective Intellect to expand social CRM technology

Purchase pits Oracle head-to-head, once again, with Salesforce

Oracle is going head-to-head with Salesforce.com once more, following its purchase of Collective Intellect, a specialist "social intelligence" software maker, for an undisclosed sum.

Oracle's purchase comes just one day after Salesforce announced its acquisition of Buddy Media, and one week after Oracle acquired social media management to its cloud portfolio by acquiring Vitrue in a $300m (£194m) deal.

Oracle will be making further cloud announcements tonight, it says.

"Creating meaningful content based on a clear understanding of consumers' conversations is the way brands will create stronger customer relationships," said Don Springer, founder and chief strategy officer of Collective Intellect.

He added: "Collective Intellect's semantic analytics platform provides cutting-edge technology to Oracle that will create a winning combination as brand-to-customer relationships move from transactional to social."

These announcements, along with Salesforce's March 2011 purchase of Radian6, "now gives both CRM giants the components they need to piece together something powerful. With social CRM in sight, this social technology arms race is the start of something very big to come," said Forrester Research analyst Zach Hofer-Shall in a blog post.

However, these acquisitions will not provide an immediate financial return. Instead, says Hofer-Shall, they represent technology acquisitions that the companies will leverage over a number of years.

None of the acquisitions – despite the weighty price tags – are of very profitable companies. "They pick up unique technologies that will help tech giants meet future market demands," said Hofer-Shall.

He added: "Social customer relationship management is hard. It requires access to social data, technology to filter, process and analyse content, and tools to manage and apply insights. While CRM software can manage data, few packages are able to deal with the dynamically changing nature of social data."

These companies' technology will form the basis of social CRM platforms from both Oracle and Salesforce, said Hofer-Shall.

"Through these acquisitions – and the eye-opening price tags behind them – Oracle and Salesforce.com show that the business world is getting ready for social media.

"It's no longer considered a fad, definitely not just hype, and not going away any time soon. Businesses must care about social media because it's clear that consumers already do," said Hofer-Shall.

However, not everyone agrees that social media networking has a rosy future in business terms. Eric Jackson, founder of Ironfire Capital, told CNBC Television's Squawk on the Street that the number one social network, Facebook, would be an internet also-ran within five-to-eight years, unable to keep up with the pace of change as internet users shifted to mobile platforms.