Salesforce.com to buy GoInstant for $70 mn-plus

By : |July 10, 2012 0

BANGALORE, INDIA: Online CRM major Salesforce.com will acquire start-up GoInstant, for more than $70 million.

GoInstant new link, launched in early 2010, set out with a vision ‘to develop technology that allows companies to create unique, personalized customer experiences through real-time collaboration," wrote Jevon MacDonald and Gavin Uhma, co-founders of GoInstant, on the company’s website.

Salesforce.com’s acquisition of GoInstant is its fifth so far in 2012 and 24th since its first acquisition in 2006.

Carter Lusher, fellow & chief analyst, Software – Enterprise Solutions, Ovum Research, said: "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 fits Salesforce’s pattern of acquiring companies that can add technology to the platform that can be leveraged by Salesforce products and ISV partners.

Indications are that GoInstant will remain available as a standalone product that can be bought and maintained.

Ovum’s MANTRA analysis is that the 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.

"What does it mean for the competition? In this case, 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, added Lusher.

At this time, it is Ovum’s analysis that 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.

Parker Harris, co-founder and EVP, technology, salesforce.com, said, “The GoInstant team has built incredibly sophisticated technology. We will help them scale and grow so that social enterprises everywhere can engage with and delight customers in totally new ways.”

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