Oracle’s Acquisition of InQuira Too Late To Be Big News
I suppose my nose is out of joint because I found out Oracle acquired InQuira, a leading knowledge management and search vendor, by reading about it in the San Jose Mercury News this morning. If you want any indication of how this acquisition will fare for InQuira and its customers, the fact that I didn’t even get a courtesy call or email–and I do more KM inquiries from technology buyers than just about any analyst in the world–and that the analysts quoted in the press releases were the usual Oracle ERP analysts who don’t know anything about CRM or knowledge management, tells me this IP won’t be available as standalone for long.
I remember asking Oracle many years ago–probably 2002 or 2003–why they continued to partner for KM instead of acquiring or building their own solution, and their answer was blunt but truthful, “We’ve never lost a CRM deal by not having imbedded KM.” Obviously that’s not the case anymore.
Not only has Oracle lost tremendous marketshare of CRM to Salesforce.com, but Salesforce has also started raising their visibility for KM. Here’s some data.
Back in 2006–the first year I did the annual Member Technology Survey, Siebel/Oracle/PeopleSoft dominated the market, with 33% of high tech companies using their CRM platforms. But oh, have times have changed. By 2011, Salesforce increased their ownership share to 46%, while Oracle’s has dropped to 14%. Of course, the average deal size for Salesforce’s OnDemand CRM products is dramatically lower than Oracle or Siebel’s OnPremise tools, so the overall CRM industry has shrunken by millions of dollars over this period as well.
But Salesforce hasn’t just been working on building their CRM marketshare. Check out these adoption numbers for Knowledge Management tools from the 2011 survey:
14% of members are using Salesforce’s increasingly sophisticated KM tools, thanks to Salesforce investing in KM technology such as the 2008 acquisition of Instranet. So it appears that KM is playing a role in CRM purchases.
Oracle says InQuira will be leveraged in the release of Fusion applications, but now that Fusion is 6 years late to the market, I don’t think anyone is still holding their breath waiting for the apps to come to light. And unless they have completely revolutionized the way CRM works, even if the product is launched I don’t know if they can overcome their extended years of inertia. They also have tremendous internal problems to overcome, which I am no longer convinced is even possible. The Oracle application sales teams have become so siloed that recently, when a company using Oracle’s JDEdwards for CRM wanted to add on field service from Siebel or Oracle, their sales rep refused to even demo it for them, told them the two products could never integrate, and they could buy JDEdwards field service (which is thin, to say the least) or do without.
Those sorts of brand conflicts within a company show how much trouble can arise from buying multiple CRM suites and never doing any integration or consolidation work. The amount of squandered potential and good will is hard to recover from.
Thanks for reading!
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Ragsdale’s Eye on Service 
July 29, 2011 at 4:12 pm
It is hard to be excited about an acquisition when they’ve been strategic partners for so long. This was inevitable.
July 29, 2011 at 5:30 pm
I think the big surprise is that it took so long. How long will it be before TSIA has only one member company?
July 29, 2011 at 8:05 pm
Probably says more about InQuira’s long term prospects than anything else. Turn out the lights, and era in KM has come to a close.
July 29, 2011 at 9:32 pm
BTW, unlike other analysts saying “standalone KM is dead,” I think there continues to be a huge market opportunity for innovative KM solutions. TSIA members have budget for KM tools this year and they are looking for bleeding edge tools to improve margins. This market reinvents itself all the time.
July 29, 2011 at 11:58 pm
Spot on, John. The market for KM is still very much alive, and expanding. The angle of approach into that market has changed, probably for the better, with the last of the legacy – stand alone – vendors being gobbled up.
July 31, 2011 at 7:20 am
OK, John and Nitin — name a vendor that can leverage this position in the market with an “innovative KM solution”.
not challenge, serious question.
July 31, 2011 at 1:19 am
Nice post John. Enjoyed reading it and couldnt agree more with your perspective.
July 31, 2011 at 5:03 pm
@Esteban – we don’t know the vendor yet. But when it happens, I predict they will (a) put an emphasis on collaboration, coalescing Chatter-like conversations into KBs, (b) make content entry and update breathtakingly easy, (c) have a web-based UI that looks like it was designed by someone who has seen a modern web application, (d) have reports that actually work, and (e) understand that simply integrating Lucene isn’t enough to check the search box.
It can happen. It’s just such a small market. Every KB vendor tells itself they’ll take over all of marketing, sales, service, and support across industries, but the reality is that tech support has some distinctive needs, and there are only so many companies.
But if your focus was getting “ramen profitable,” not going for a huge IPO, it would be pretty easy to dominate the space. Maybe you, Nitin, and I should just go do it to prove a point.
July 31, 2011 at 11:58 pm
Gentlemen.
I am not surprised that Inquira dissapears. They are not the first, and not the last.
I am more surprised that the people I follow on Blogs seems to momentarily loose the insight that KM is just 20% technology.
The vendors are less important now than earlier. To get KM to work you need to integrate the Knowledge repository, search, collaboration functionality and legacy sources – often also with web learning or virtual meeting rooms in one form or another.
That’s the boring technology enabler. The rest is culture, content, process & Change management. The base technology is so simple that even Microsoft can provide it (as seen in John’s slide – Sharepoint is picking up)
August 2, 2011 at 5:06 pm
Lars –
I generally agree with your point that it’s “culture, content, process, and change management.” (In full disclosure, I have a vested interest in agreeing with you: that’s what we do for a living.)
But I think you carry things too far when you say “the technology is so simple that even Microsoft can provide it.” Great tunable search, easy authoring with structure, integration into case tracking, and effective analytics are really powerful enablers of the culture and process change…or to put it more negatively, the lack of these characteristics in the technology makes change management that much harder, and vastly harder to sustain.
I understand why people are using raw SharePoint for KM, but they’re not making their lives easier. Nitin and John are right: there is a need for good tools.
August 2, 2011 at 5:47 pm
Well Lars, while I agree that successful KM is more about process than technology, I can’t agree that technology only gets 20% of the credit.
The bleeding edge of KM is very technology reliant, from video tutorials, intelligent agents (robots), and sophisticated search and analytics like Coveo that can take a useless mass of content in Sharepoint and turn it into valuable intelligence.
The companies who continue to be recognized as industry leaders for KM best practices (Cisco, Avaya, Yahoo, HP, etc.) all make very large investments in bleeding edge tools to maintain that industry leadership.
–John
August 1, 2011 at 1:19 am
John thanks for sharing those statistics.
While the shift in CRM adoption from 2006 to today shows the obvious shift to Salesforce.com and the SaaS model, a BIG surprise is the virtual lack of growth in Microsoft’s share of the market.
For all their investment in product development and marketing over the past five years, I would have expected to see a much greater gain than a measly 3%!
When you look at how Microsoft CRM has moved up in Gartner’s Magic Quadrant for CRM over the same five years, you would expect to see a commensurate increase in adoption within the market.
Will Microsoft ever be a significant player?
Thanks again John,
Jim Watson
http://bit.ly/efrxOg
August 1, 2011 at 1:51 pm
Microsoft has a lot of challenges, and no, and I don’t ever expect to see their CRM tools installed outside of 2 person dental offices. That is what it was designed for. It could never meet the needs of a large enterprise.
Obviously Waves and Magic Quadrants include the vendors who pay the most–I used to do Waves so I know. And, MS’s Brad Wilson is brilliant, and I’m sure he can easily influence an analyst.
The best clue as to the future of MS CRM is when you ask Microsoft when they plan to begin using their own CRM tools internally. And they laugh for several minutes before saying it won’t be happening anytime soon.
August 1, 2011 at 12:42 pm
John,
Given the larger Oracle vs SAP battles, any thoughts on how this news plays out for companys who use SAP CRM and are considering InQuira as their KM solution?
Thanks,
Ron
August 1, 2011 at 1:55 pm
Hi Ron;
Well, I don’t expect any SAP customers will be buying InQuira now.
My position is that KM is not becoming part of CRM, at least not a ‘best of breed’ part of CRM. My data shows that support KM is merging with corporate KM. CIO’s have been tasked with capturing more employee knowledge before all the Baby Boomers retire, and the are consolidating tools and processes across the organization. That’s why I’m seeing corporate KM tools like EMC’s Documentum showing up on my survey of KM tools used by support.
With the T-Rex search and all of the analytics platforms they have purchased, I think SAP has as good a KM story as Oracle already.
August 1, 2011 at 9:29 pm
Surprised to see Egain (EGAN) not in the list. They are highly rated by Gartner.
August 2, 2011 at 1:32 pm
A lot of the comments on this blog have been flowing via email, and eGain has definitely been discussed. Their new multi-search feature should be evaluated by companies looking for an InQuira alternative. See this post: https://jragsdale.wordpress.com/2010/12/14/egains-new-multisearch-gives-vendor-best-of-breed-status-for-kb-multichannel-self-service-and-now-search/
August 2, 2011 at 2:52 pm
[…] Oracle has been losing CRM marketshare to Salesforce in recent years, which sheds light on its recent acquisition of knowledge management provider Inquira. But, as John Ragsdale writes, Oracle’s move may be too little, too late as service firms have largely adopted competing solutions that integrate easily. Republished with permission from Ragsdale’s Eye on Service. […]
August 10, 2011 at 3:09 pm
Sorry for being late to the party. But better late than never. For me the InQuira acquisition doesn’t shock in it’s own right. What I continue to puzzle over is the general lack of true integration of KM with CRM, etc. As the former PMM for KNOVA, post Consona acquisition, I kept watching waiting, and pushing for this kind of magic to happen. And I’m still waiting. Now with the advent of social in the mix, it seems as if the problem just got more complicated. The bright side to this is that many talented people in this space can and should be used to help companies understand how they might use sound KM/KCS practices as the guidebook for leveraging the new reality of social technologies. This in my opinion is a huge area of opportunity.
August 14, 2011 at 7:55 am
Coming in late as well my 2 cents are that KM and CRM should be integrated. You want to rely on knowledge in your customer interactions and these days knowledge is spread across many silos and repositories. This is why boosting CRM with knowledge from other systems is key. Softlib Software (www.softlibsw.com) by the way is another vendor I’ve seen in TSW that is a new interdependent player in the space