What Does Salesforce-Radian6 Deal Mean for Everyone Else?

| 12 Comments

Every few seconds this morning, TweetDeck brings another comment on today's announcement that Salesforce.com is buying Radian6. The announcement's not exactly a surprise—Radian6 was the obvious acquisition target in social media analysis (SMA), and their platform had supported Salesforce integration since mid-2009. The price ($340 million in cash and stock, including retention bonuses for the founders) is larger than expected, but overall, it's a logical deal that surprises no one.

Blogging about the day's big news is sort of obvious, so I'll focus on the question I haven't seen raised yet: what does the Radian6 acquisition mean to the other companies in social media analysis? A few thoughts for discussion:

  1. Radian6 just took a big step toward solidifying its position as the standard.
    Radian6 was already the company most likely to be mentioned in any discussion of social media monitoring (note the careful use of the term). The Salesforce endorsement makes them the default choice for 92,000 Salesforce customers. Competitors need more than a me-too monitoring platform to win.

  2. Aquisitions say something about the segmentation of social media analysis.
    The Radian6 deal says a lot about interest in social CRM, or the integration of social media monitoring and customer relationship management. Other acquisitions have tied SMA firms to PR/media (Sysomos/Marketwire, Brandtology/Media Monitors), market research (Cymfony/TNS, Umbria/JD Power, Evolve24/Maritz), and marketing management (Techrigy/Alterian). SMA is a feature set that can work into multiple categories; look for SMA companies to focus their feature sets on specific use cases, and expect acquisitions that work into acquirer's existing businesses.

  3. Enterprise software has noticed social media analysis.
    Salesforce joins SAS in making a serious move to tie social media analysis to nuts-and-bolts business operations. Social business software companies Jive and Lithium have picked up their own listening platforms. Any acquisitions or product announcements by IBM, Oracle, and SAP should be completely expected, but pay attention to the emerging distinctions between social media analytics and social media monitoring (see #2).

  4. Obvious acquisition candidates are getting harder to find.
    Despite the presence of 300+ companies in the space, only a handful of the product leaders are still independent companies. Radian6 is easily the most recognized name in SMA, so most of the remaining independents are not widely known. Looking back to my report on social media analysis platforms for workgroups (March 2010), six of the 21 companies have been bought in the last year.

I don't think there's one obvious candidate for the next acquisition, and in any case, any deal has to start with specific goals (just like any purchase). If it's not already obvious, the many companies in SMA are not the same. The differences in what they do and why is what makes the space so interesting. I know you want the list, though, so here's a quick reaction on who I might look at:

  • Attentio, Brandwatch, Sentiment Metrics and Synthesio don't usually come up in the social media conversation in the US, but they all have solid SMA platforms.

  • Converseon blurs the lines that divide research, creative marketing, and management consulting services. They drive me crazy because they're always working out the same things I am. Nobody else does the one-stop social media shop like they do.

  • Visible Technologies has unique capabilities in managing the response component in social media monitoring, as well as a nicely designed interface for working with solid analytics capabilities.
If your needs are more specific—you want an analyst team or a virtual focus group capability, for example—the list gets longer quickly. And, of course, we have regional specialists around the world who can help fill gaps in your coverage. If you want a real recommendation based on your company's goals and gaps, call me.

Disclosure: Radian6 is paying my way to their user conference next week. I consult with companies (usually buyers) on partnerships and acquisitions in social media analysis, but I do not represent the companies listed here.

Related:

If you start to lose track of all the combinations, remember that I'm keeping a score card on acquisitions in social media analysis.


12 Comments

Really well thought out article, Nathan. It's certainly been a busy morning. We're very excited over the big news and appreciate you sharing it here and opening it up for discussion. It will be interesting to see how social media is impacted by the segmentation you've mentioned.

Best wishes,
Trish Forant (@Dayngr)
Community Manager | Radian6

Nathan,

Like usual, you are all over this industry and breaking news. It's great news for R6, and also for the industry as a whole. I think people in the know have been suggesting quite vocally for some time about the convergence of social into all forms of mainstream business applications, intelligence, and processes, so today's news is a real validation of that. As you suggested, this will continue for sometime. Stay tuned.

Mike Spataro
Enterprise Client Strategy
Visible Technologies

Neat analysis Nathan. MutualMind competes with R6 all the time and we've seen great interest in integrated engagement, white label SMA for verticals and business action oriented functions (lead gen, customer care). These are just a few examples of the niches which social monitoring companies will evolve towards.

Babar

Thanks for the analysis.

To me, this clearly shows that R6 is a great asset to Social CRM and as a tool for call center type of people where you need to
- spot everything that is said
- quickly answer and move on

The acquisition make sense and kudos to the R6 team.

Marketing is not Social CRM and marketing people working on the proactive side of their company and looking at growing the impact of their brand have different agendas and objectives. They need different type of solution (like us).

Ones that enable segmentation, strategic listening, focus on influencers and deep listening and engagement. Not just surface monitoring.

Nice summary. It strikes me that Collective Intellect (@collectual) is another firm worth noting in this space. Their extension into private data sources - http://bit.ly/fK77Bz -
and focus on semantic categorization strike me as differentiators. In the interest of full disclosure, I'm an corporate alumnus of CI.

Thanks for jumping in, everyone. Now, have a beer and tell me what you *really* think. :-)

Richard, this was the off-the-cuff list. I thought of CI a few minutes after I posted it. Naturally, typing this is bringing up a few others, such as NetBase. Depending on what you're looking for, there's a variety of interesting companies.

Great synopsis as usual. I look forward to picking up the conversation at next week's R6 conference in Boston. I just wonder whether anyone is listening to the marketplace. Yes, the tools are getting more integrated, but IMHO it seems the market gets more confused and less clear about what to do with them.
Good thing folks like us are still around!

Interesting synopsis. A small correction, Cymfony is now with Kantar Media (not TNS).

Thanks, Jessica. I'm pondering whether the post should reflect the combinations at the time of the acquisition or the current state of the org chart. Since TNS is also part of Kantar, I'm not sure it makes much difference outside the company.

Hi Nathan,
Thanks for the mention and your kind words about our capabilities, all of them true ;-)

Yes we are still independant and growing fast. Although we don't have a massive presence in the USA under our brand (Sentiment Metrics) our platform is used by over 300 clients via our large partners in the USA, who tend to market under their own brand.

We have obviously been working on our core SMA capabilities, but have a new offering coming out in the next few weeks which greatly expands our offering for the enterprise (scrm area).

Be great to fill you in some time on where we are, as we haven't spoken for over a year

Thanks

Leon Chaddock
MD
SentimentMetrics.com

Nathan,

Great first analysis...it is never easy to comment so quickly to an announcement like this, but your analysis is thorough and your questions spot on. Thank you for sharing our news. We are excited about what the future will deliver. Looking forward to seeing you later this week!

Lauren Vargas
Director of Community at Radian6
@VargasL

Right on the ball! And of course as acquisitions gather pace then the price of the remaining market leading independents can only rise.

But how will the nature of the acquisitions change? Yes some will choose to make it as independents, while the market will segment further driving more acquisitions of social media companies. In parallel, social media analysis will evolve along other paths, targeted to different ends. For example, the use of social analysis in business consultancy, testing its solutions and implementation, has hardly been touched. Also more leading companies will harvest social media tools to define and test their product development and sales promotion.

As more uses are found, independent social media companies will have to make difficult decisions on where to apply their technology and whether to be tempted by acquisition to concentrate on specific markets for specific companies.

The social media market is still immature and the story will run and run.

Comments are now closed for this entry.


About Nathan Gilliatt

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  • Voracious learner and explorer. Analyst tracking technologies and markets in intelligence, analytics and social media. Studying complexity and futures.
  • Principal, Social Target

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