Business software giant Oracle today said it would acquire TOA Technologies, a privately held cloud software company that specializes in handling the dispatching of field service workers.
Financial terms aren’t being disclosed, but handling the on-the-ground management of people who make service calls is a surprisingly big business. TOA handles 120 million service requests every year in 20 countries around the world. Its customers include Dish Network, Home Depot and Ricoh.
The deal should be viewed against the backdrop of Oracle’s tightening rivalry in cloud business software with Salesforce.com. While Salesforce is known primarily for its Customer Relationship Management software (indeed, CRM is Salesforce’s stock ticker symbol), it also has another business it calls its Service Cloud. It’s essentially software that companies use to handle customer service. Companies that use it include Wells Fargo, Burberry and Toyota.
But when a customer service call requires a “truck roll,” meaning an on-site visit, the service cloud pivots out to a third-party product. TOA is one. ServiceMax and ClickWorkforce are others.
Oracle’s move may turn out to be the starting gun in a race to roll up these companies. ServiceMax would be a potential target. In March, it raised a $71 million Series E round led by Meritech Capital. It has raised a combined $120 million and is mulling an IPO in 2015.
At the time I talked to ServiceMax CEO Dave Yarnold, he pegged the overall size of the market in managing field service workers at $15 billion because there are so many industries with equipment that occasionally requires in-person maintenance and repair. ServiceMax’s customers, for instance, take care of medical gear, electrical grids, oil and gas infrastructure, forklifts, elevators and so on.
These rounds of dealmaking in the cloud software space can come on rather suddenly. The most recent two rounds came over the last three years or so in the human resources and marketing spaces.
In 2011, the German software company SAP started off the race to roll up the HR players when it paid $3.4 billion to acquire SuccessFactors, in part to counter the growing threat from Workday. It wasn’t long before Oracle and Salesforce made similar moves: Oracle paid nearly $2 billion for Taleo, while Salesforce picked up a small startup called Rypple and turned it into Work.com.
The M&A activity has been just as heavy in marketing cloud software. Salesforce paid $2.5 billion for ExactTarget last year and about $700 million for Buddy Media in 2012. Oracle grabbed Responsys for $1.5 billion last year and paid $871 million for Eloqua in 2012. SAP acquired SeeWhy, a smaller player, in May. IBM has also been an aggressive buyer of marketing software companies recently. It acquired SilverPop in April and in 2010 paid $480 million for Unica.