Salesforce.com adds socialytics with Radian6 acquisition

IDC IT Agenda Community –

Early today, March 30, 2011, Salesforce.com announced its intention to acquire social media analytics specialist Radian6 for $326M in a combination cash and stock deal that is expected to close in Salesforce.com's second fiscal quarter ending July 31, 2011.

This high profile acquisition continues the trend of acquisitions within the CRM market that point to powering CRM offerings with analytic capabilities. The addition of the newly emerged social data to the CRM construct addresses a piece of customer insight that has long been elusive -- 'what is my customer thinking right now?' Radian6's analysis and tracking of customer sentiment addresses that key piece of knowledge which is precisely the lure of social engagement.

Insight or knowledge of and about the customer has long been restricted to the analysis of documented behavior. We find out what is going on with a customer through analyzing their purchase history, their interactions with customer service, whether we lost them as a customer etc. This level of analysis while valuable in its own right falls short in delivering any information on the intangibles of humans. Social data tends to be a direct reflection of motivations and feelings. Interactions in social networks and through social media is bringing this missing piece of customer knowledge. It can answer questions such as, 'How does the customer feel about our company, our product, and our service?"

The immediacy and insight that social networking has brought to the table from a customer standpoint is unique. Unfortunately, the uniqueness has also come with a price. While a plethora of customer emotion and perspective is being played out on the social Web it is unclear what of that data should be tracked, how to best interpret and track it and finally, how best to leverage the data internally for specific business purposes. The discipline of what IDC terms socialytics, and a part of the market in which Radian6 participates, is targeted at addressing these issues.

For many organizations the forays into social have been a mix of experimentation, isolated initiatives and reactionary/protective responses. The graphic depicts the various business outcome targets at which socialytics is being directed within customer handling. Each of the pillars of the CRM function, marketing, sales and service, can leverage the outcome of social data analysis to achieve the different business requirements of the various CRM pillars. To date the initiatives into social media have been from a specific business pain point, or an isolated initiative. IDC believes that the successful use of social is applying it within a business process. The use of analyzed social data through socialytics injected into a business process has the potential to yield significant business results when it is applied in concert with existing customer data.

The acquisition of Radian6 and the incorporation of Radian6's technology into Salesforce.com's CRM application set enables this process from within one environment. While the exact details on how Radian6 functionality will be added to the Salesforce.com offering has not been announced, we assume that it will be handled in a similar fashion to other acquisitions. IDC assumes that the functionality will at minimum imbue the platform (force.com) and the core CRM applications with social media analytics. As with other similar additions of functionality it is assumed that access to the capabilities will be available to customers of the higher end SKUs of Professional, Enterprise and Unlimited editions.

For customers of Salesforce.com the acquisition of Radian6 has three immediate benefits:

1) It gives access to market tested, pure play social media analytics,

2) When combined with the transactional CRM capabilities the Radian6 technology will bring real customer insight into the enterprise system where it can be leveraged meaningfully, and

3) The incorporation of Radian6 within the core CRM system will help rationalize the myriad social initiatives that have sprung up as organizations have rushed to address social requirements.

The announcement of the impending acquisition of Radian6 has come just a week before its user event, Radian6 Social 2011 Conference in Boston, April 6-9. While there is a strong benefit to Salesforce.com customers from the acquisition it will be interesting to see how Radian6 customers view their platform becoming part of Salesforce.com.

While IDC believes the strength of socialytics is in its being leveraged within a process, that doesn't mean there isn't room for stand alone providers. The market of socialytics is still evolving and the long term viability of stand alone and best-of-breed providers is unclear. Will socialytics become a feature this early in the game? Let us know what you think.

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