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This morning, Oracle announced that it is acquiring InQuira, a knowledge management software provider specializing in web self-service and agent service knowledge. Oracle did not disclose the financials of the deal, suggesting that the amount was not significant. Oracle expects the proposed acquisition to close by Fall of this year. Both companies will continue independent operations until then.

Inquira’s knowledge management solutions are known to increase agent productivity and effectiveness through patented natural language search processing, in context intelligence, analytics, and other features. The company’s customers include Intuit, Yahoo, 3M, and Sprint.

Oracle expects to benefit from the acquisition by improving its CRM software with web self-service, C2C community support, and scalable knowledge management capabilities. More specifically, Oracle CRM customers will benefit from intelligent guided search, guided assistance, linked answers, integrated case management, and social media customer communities.

Oracle and Inquira: A Dynamic Duo

Anthony Lye, Senior VP of Oracle CRM, detailed the benefits of the deal:

“The combination of Oracle and InQuira is expected to further extend Oracle’s leadership CRM with web self-service, customer communities and knowledge management capabilities. Together, Oracle and InQuira plan to provide customers with advanced search and a scalable knowledge management platform as a part of a comprehensive CRM solution. After the close, Oracle expects InQuira’s solution to enhance Siebel CRM and Oracle Fusion CRM Service. By adding InQuira’s capabilities to Oracle’s products, Oracle expects to provide customers with a complete and integrated knowledge management solution that enables companies to improve and personalize their customers’ experience.”

 

Mike Murphy, InQuira’s CEO, was excited about the pending acquisition:

“With integrated knowledge management, companies have the ability to capture, create, understand and deliver the right answers when customers need it. We are excited to join Oracle and offer a comprehensive cross channel customer support solution.”

 

The Roundtable Weighs In

Chris Kanaracus, a reporter for The IDG News Service, analyzed the move in relation to the upcoming Fusion Applications suite:

“Fusion CRM is part of Oracle’s long-gestating Fusion Applications, a next-generation suite designed to include the best features from its various product lines. The long-delayed software is now in what Oracle calls “controlled availability” after six years of development.

Despite the massive in-house engineering effort Oracle undertook to build Fusion Applications, the InQuira purchase suggests that some aspects of the Fusion portfolio will be filled in via acquisition.

Oracle will get a head start with InQuira, since they share many customers and InQuira’s software has been integrated with Oracle’s CRM On Demand software since 2009.”

 

Kanaracus also reports Constellation Research CEO Ray Wang’s comments later in the same article:

“InQuira “is one of the top knowledge management vendors in the business,” said analyst Ray Wang, CEO of Constellation Research. “They’ve been positioning for a sale to Oracle or SAP for the past 24 months.”

While knowledge management is “a critical component” of CRM systems, most have “a big gap in this area,” Wang added.

It might seem that a vendor such as Oracle, which already had content management and enterprise search capabilities, could build out its own knowledge management system. But the fact is that knowledge management is “a specialized niche,” not only in terms of technology but the customer base, Wang said.”

 

Nicholas Kolakowski, a staff editor at eWEEK, examined the move within the competitive landscape of the enterprise CRM space:

“Oracle’s acquisition is yet another indicator of heated competition within the CRM space. Earlier this year, Microsoft rolled out Dynamics CRM Online, the cloud version of Microsoft Dynamics CRM 2011. For its part, Microsoft has emphasized how customers can use the cloud platform in conjunction with Microsoft software such as Office—in effect, creating a supple competitor to Oracle’s integrated hardware-and-software stack. Meanwhile, Salesforce.com has bet its chips on the idea that businesses want their CRM with features such as real-time social networking.”

 

Kolakowski also felt that each major CRM company was taking different approaches at increasing functionality to differentiate themselves from competitors. This insight was no surprise to Jennifer LeClaire, a writer for CIO Today, who reported on the growth of the CRM software market:

“By 2013, spending on social software to support sales, marketing and customer-service processes is expected to exceed $1 billion worldwide. That compares with Gartner’s forecast of more than $12 billion in spending on CRM software in 2012, and means that social CRM will encompass approximately eight percent of all CRM spending in 2012, up from about four percent in 2010.”

LeClaire also reported on Rob Enderle’s analysis of the competitive CRM space:

“‘CRM is one of the big battlegrounds for business-solutions providers. It is one of the areas that’s been heating up significantly,’ said Rob Enderle, principal analyst at the Enderle Group. ‘Companies are conceding that customer retention is a strategic focus during this time of tepid recovery because the cost of customer acquisition is so high. Companies are increasingly investing in advanced tools to serve customers. Clearly, Oracle is moving on that opportunity. And so are others.’”

 

Will Oracle’s acquisition of Inquira be a boon for its CRM strategy? How will this affect the other big players in the space? Will standalone knowledge management solutions become outdated? Share your thoughts in the comments below.

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