Salesforce.com is set to buy technology start-up GoInstant for around $76.0 million.
GoInstant was started with seed capital of $1.7 million, raised by private equity firms Freestyle Capital, Baseline Ventures and Greylock Partners, among others.
GoInstant sells the service as a premium product to customers like Joyent and Formspring, which use it for improving customer service.
Salesforce has also acquired a number of social enterprise companies over the past year, with the most recent being Buddy Media for $745 million.
This deal will help Salesforce tighten its grip in the social enterprise area, which is attracting the attention of major businesses across the globe.
In November last year, Salesforce acquired mobile and cloud service provider Model Metrics to enhance its mobile and social expertise.
The company also acquired human resource software company Rypple, which specializes in performance management and goal-setting.
Salesforce believes that the cost of the acquisition will have a negligible impact on its fiscal 2013 revenues.
Salesforce has always adopted new technologies from different companies, either through technical collaboration or acquisitions. We see continuous product launches and deal wins as positives.
Low-margin government deals, foreign exchange fluctuations and stiff competition from key players such as IBM and HP may challenge the growth prospects of the company to a certain extent, according to a report in Yahoo.com
Salesforce.com’s acquisition of GoInstant is its fifth so far in 2012 and 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 Radian6, GoInstant does provide customers with useful functionality and puts pressure on competitors to continue advancing their platforms.
GoInstant acquisition has fewer motivations than one like Buddy Media or Radian6. The most important motivation is adding new functionality to the Salesforce platform that can be leveraged by other Salesforce applications (e.g., Sales Cloud or Service Cloud) or third-party developers. The secondary motivation is acquiring R&D talent, though at the reported $76m this is not a pure acq-hire. Acq-hire is 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 does not have enormous competitive implications. This acquisition is part of the arms race between all the CRM vendors (e.g., NetSuite, Oracle, SAP, and SugarCRM) to quickly add robust functionality to their portfolios, either through organic development or acquisitions, according to Carter Lusher, Ovum Research Fellow & Chief Analyst Software – Enterprise Solutions.
GoInstant will remain a product that can be purchased separate 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 ceases to exist as a separate product.