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Oracle buys RightNow Technologies for $1.5B

Oracle recently announced the acquisition of RightNow Technologies, a cloud based customer service company meant to help them compete with the likes of salesforce.com. It also beefs up their total cloud offering which includes human resources, talent management, social networking, databases and Java, said Thomas Kurian, executive vice president of Oracle Development.

The idea here is to bolster Oracle's cloud offerings, making it a more competitive cloud player. It currently ranks number 80 in the Washington Technology 2011 Top 100 list of the largest federal government contractors.

I've been asking one question regarding cloud computing for the last few years and I've yet to get a decent answer for it: What happens when the cloud evaporates?


More aptly put, and in more detail, what happens when you can’t get to the cloud and the resources or tools you need to do your job? How do you diagnose the problem? Is it YOUR network? Is the problem on the cloud’s end? Is it a problem with your ISP? Is it somewhere in between your ISP and the cloud (the internet)?

This also begs additional questions. What about security and compliance issues? How can you insure the security and retention of your data for eDiscovery, monitoring and audit trails? How to you insure HIPAA and other regulatory compliance? All very important when you’re dealing with either regulated industry clients (FDA, DoJ, etc) or governed industry clients, like heath care providers and hospitals.

These are huge questions; and while providers like Google have been doing a really good job with offerings in the consumer space, like Gmail, their performance in larger corporate settings like the City of Los Angeles have been less than satisfactory. The issue with the Google/LA contract is security. Google Apps has no built in security that complies with LA’s DoJ-based security requirements. Google’s native API’s don’t support enhanced security and they have been unable to deliver these DoJ based requirements, despite working with some of their security focused partners, since the deal was announced in 2009. As a result, nearly 13,000 LAPD employees are still using the legacy mail system two years later. In order be successful with their cloud offering, Oracle must be able to adequately address issues like accessibility, access, security and retention in order to avoid some of the pitfalls that Google has fallen into.

The Oracle-RightNow deal is currently expected to close by the end of the calendar year and at $43 per share, as of the final bell on 10/24/11 represents only a $0.06 per share premium for the company. Inter-day trading has the stock trading right around the $43 mark. Shareholders still need to approve the deal.

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