RightNow: Oracle and next-generation CRM

While RightNow has a vision for how customer experience will evolve over the coming years to encompass mobile computing, the main issue facing RightNow's customers is what to make of Oracle.

Oracle is buying RightNow to bolster its cloud computing portfolio, which, according to analyst Ray Wang, lacks multi-tenancy, something that rival Salesforce.com offers. Writing on his Software Insider blog, Wang said: "RightNow brings over 2,000 customers, and 10 billion transactions per year in volume. With most of RightNow's customers coming from the customer support side of the house, Salesforce.com will feel the heat in the marketplace."

RightNow brings true software-as-a-service (SaaS) to Oracle. So unlike Oracle's Siebel CRM software, where highly skilled (and often expensive) consultants are needed to program and customise the CRM, instead, RightNow is based on user configuration. Often, changes that can take weeks to program on a traditional on-premise CRM package such as Siebel, can be achieved in a few minutes.

Dianne Clarkson, an analyst at Forrester, recently said: "RightNow has a lot to offer Oracle. Along with salesforce.com, we called out RightNow as a SaaS solution that was faster to deploy and easier to change than traditional on-premise offerings. RightNow is well positioned to give Oracle a customer service offering for the mid market."

Commenting on the acquisition, Gianforte said: "We are proud to add our cloud to Oracle's cloud. RightNow would be an important additional to Oracle The future of CRM is in the cloud."

He said Oracle gives RightNow distribution.

But until now, RightNow has been winning business against Oracle's own on-premise Siebel CRM system. "There is no Siebel in the cloud," he said.

In fact, Gianforte said it has replaced all of Siebel in Sony and Nike, and the company is in a strong position to grow. Six out of the top UK retailers are clients, he said. "Our client base is the largest consumer brands."

Bernie Burrow, head of customer service at Sony Computer Entertainment, said: "Four years ago we were heavily dependent on Siebel. To perform minor changes, like creating specific reports, took a long time with Siebel." He said Sony chose RightNow, due to cost flexibility and the ability to self-configure.

"RightNow gives me instant access to reporting and we have made it do a lot of things it wasn't designed to do."

Thetrainline.com, which has been using RightNow for over seven years also uses the Oracle database. "Oracle came as a pleasant surprise," said Tim Macivor, head of customer experience at Thetrainline.com. "Our transaction databases use Oracle." However, he hopes Oracle does not choose to change the product radically. "If it ain't broken, don't fix it."

Michael Maoz, distinguished analyst at Gartner, warned that for users of RightNow software, the most immediate issues within the next 12 months will be with the availability of professional services resources, and the continuity of account management during the transition. "Expect product rationalisation in approximately 18 months. Prepare for the possibility that the Oracle knowledge management product from InQuira will replace the RightNow knowledge solution."

The cost of SaaS

According to Gianforte, RightNow has a massive opportunity to upsell to existing customers, which illustrates how SaaS makes money. "A client signs up on one or two products. As their business grows we sell more capacity. Within a single division we can also sell more products. As the business expands into different geographic regions, RightNow also sells additional language packs. The flip side of this is, of course, that the business may end up paying a huge amount for its software.

"We are about 20% penetrated at the moment, With our 2,000 customers there are 6,000 divisions we haven't called on yet, just in North America and Europe."

In addition, Gianforte claimed that there are 3,000 customers in North America and Western Europe that are the same size as the existing RightNow users, leading to a 10x, $2bn growth opportunity for the company.

Proactive CRM

According to Gianforte, customer experience is today's competitive battlefield. "Those businesses that organise customer experience will become the best power brands. Customer care has to become device aware."

Gianforte said customer relationship management (CRM) will need to incorporate mobile devices. Devices will be always-connected, and consumers will seamlessly move between devices. For instance, 30% of the traffic from dating site Match.com, a RightNow customer, is mobile.

Gianforte said a good customer experience will need to incorporate text-to-speech, speech-to-text, even video-to-text, with full contextual awareness.

He said that in the new age of CRM the channels by which people interact with businesses become invisible.

Gianforte said the call centre is an opportunities centre. "Almost all the call centre managers I have met have revenue responsibilities." In the past, helpdesks were measured based on cost-reduction metric, by minimising the duration of phone calls. For Gianforte, this represents a lost opportunity. "Consumers don't care about sales or service. Service becomes an opportunity rather than a cost."