Software giant Oracle (Nasdaq: ORCL ) already rides the cloud computing wave in a big way. If you're not using Oracle Fusion and other direct cloud plays, your company's cloud strategy probably includes some Oracle databases or at least Oracle-owned Sun server hardware. One way or another, Larry Ellison probably has a finger in the IT clouds around you.
So how do you follow an already massive cloud commitment like that? Let's try some cloud-based customer service.
Today, Oracle announced a $1.5 billion acquisition in that space. The database veteran will soon be the proud owner of RightNow Technologies (Nasdaq: RNOW ) if shareholder votes and regulatory approvals go Oracle's way.
"RightNow's leading customer service cloud is a very important addition to Oracle's Public Cloud," says Thomas Kurian, Oracle VP of development, in a prepared statement. It'll certainly help Oracle keep up with the Joneses; both TIBCO Software (Nasdaq: TIBX ) and salesforce.com (NYSE: CRM ) have married their business intelligence tools to powerful social networking tools already, and RightNow is a big step in the same direction.
The big question now is, what happens to highly respected RightNow rival LivePerson (Nasdaq: LPSN ) ?
Shares of the Rule Breakers recommendation have gained 7.2% today as of this writing, and keep climbing skyward. Oracle's big buy with a 25% buyout premium kindles hopes of a similar deal for LivePerson. The line of acquisition-hungry tech giants with an interest in cloud computing is long and includes both Hewlett-Packard (NYSE: HPQ ) and IBM (NYSE: IBM ) . At the very least, Ellison just validated the value of instant online customer support. Just the extra publicity tied to this deal might be worth a few LivePerson contracts.
In fact, Oracle's deal is surprising because it passed over LivePerson to land at RightNow. Let me point out that one of these stocks carries a perfect five-star rating in our CAPS system while the other sports just one star out of five. The five-star stock boasts twice the operating margin of the single-star competitor, and its PEG ratio indicates deep value at half the other guy's size. LivePerson is the five-star stock that wins every one of these direct comparisons.
Did Ellison pick the right customer service specialist? Only time will tell; add Oracle to your Foolish watchlist to keep tabs on how it all works out.
In the meantime, you can learn more about the industry-changing cloud computing trend and how to invest in it all. This free video report will get you started down a very profitable road.