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Ovum: Salesforce acquires GoInstant to extend the platform
Jul 11, 2012 – Carter Lusher
Salesforce.com’s acquisition of GoInstant is its fifth so far in 2012 and the 24th since its first acquisition in 2006. GoInstant fits Salesforce’s pattern of acquiring companies that can add technology to the platform that can be leveraged by Salesforce products and ISV partners. In addition, indications are that GoInstant will remain available as a standalone product that can be bought and maintained. While not a dramatic purchase like its Radian6 acquisition, GoInstant does provide customers with useful functionality, and it will put pressure on competitors to continue to advance their platforms. Ovum’s MANTRA (merger and acquisitions tracking research methodology) score for this acquisition is “Positive” because it enhances Salesforce’s competitive position in the market and potentially makes GoInstant a better product for existing customers.
The primary motivation is extending the functionality of the platform
Ovum’s analysis is that Salesforce had fewer motivations for the GoInstant acquisition than it had for its Buddy Media or Radian6 purchases. The most important motivation is the adding of new functionality to the Salesforce platform that can be leveraged by other Salesforce applications, such as Sales Cloud or Service Cloud, or third-party developers. The secondary motivation is the acquiring of R&D talent, though at the reported $76m this is not a pure “acq-hire” where the product and technology are discarded while the talent is retained. Acq-hire was the motivation behind the recent Stypi, Thinkfuse, and ChoicePass buys, which saw those companies’ products immediately shut down. However, GoInstant was still a startup with relatively few customers so it was not acquired for its revenue stream or customer base to sell into.
GoInstant fits into Salesforce’s M&A pattern
While not filling a major functionality gap, GoInstant does add capabilities that are consistent with Salesforce’s “Social Enterprise Architecture” message. GoInstant’s functionality complements the web conferencing capabilities that came with the DimDim acquisition (January 2011, subsumed into Chatter). Neither GoInstant nor DimDim require the installation of software on the laptop or smart device client, which makes them attractive tools to facilitate ad hoc interactions over browsers with customers and prospects.
What does it mean for the competition? In this case, GoInstant does not have enormous competitive implications. This acquisition is part of the arms race between all the CRM vendors including NetSuite, Oracle, SAP, and SugarCRM to quickly add robust functionality to their portfolios, either through organic development or acquisitions.
At this time, it is Ovum’s analysis that GoInstant will remain a product that can be purchased separately from Sales Cloud or Service Cloud. However, it could see a brand change, like Assistly, which became Desk.com. Another possibility is that within a year GoInstant will be completely subsumed into Chatter, like DimDim, and will cease to exist as a separate product.
Recommendations for enterprises and public sector organizations
It should be business as usual. Salesforce’s has a track record of investing in acquisitions so there should be no concern over the viability of the product and technology. Early reports are that Salesforce plans to expand the GoInstant team by 15 in the next year, which will almost double the headcount. Customers of Salesforce and GoInstant should not see this as anything that might impact their installed base or procurement plans.
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