Salesforce Ponies Up $340M for Krux Data Management

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Salesforce has agreed to acquire its Marketing Cloud partner Krux, which offers a data management platform.

Salesforce will pay US$340 million in cash and issue between 3.4 million and six million shares of common stock to consummate the deal, according to documentation filed with the U.S. Securities and Exchange Commission on Monday. That's worth an estimated $700 million in all.

Krux will extend the Salesforce Marketing Cloud's segmentation and targeting capabilities to power consumer marketing with even more precision at scale, said Krux CEO Tom Chavez.

Further, Krux will feed Salesforce's new artificial intelligence system, Einstein, with billions of new signals, providing corporations with more data about their users.

"The acquisition was absolutely needed and expected," said Sheryl Kingstone, a research director at 451 Research.

"It's a great addition to not just the data cloud, but also the marketing cloud, as the world demands contextual 1:1 intent-driven engagement," she told CRM Buyer. "It's all about the data for the future of intelligent business applications."

Salesforce is making a big push into AI, having developed Einstein to integrate AI into all of its products and serve as a nervous system across its entire business.

Einstein includes product recommendations; Predictive Sort, which turns up sort and search results based on how likely customers are to make a purchase; and Commerce Insights, which helps retailers understand product purchase correlations to help improve their store planning and merchandising.

Data lies at the heart of those efforts, and that is just what Krux offers. Through its data management platform, it serves as an intelligent marketing center that corporations can leverage to deliver media, content and commerce experiences to deepen customer engagement, strengthen

Every month, Krux interacts with more than 3 billion browsers and devices, supports more than 200 billion data collection events, processes more than 5 billion CRM records, and orchestrates more than 200 billion personalized consumer experiences.

Krux uses AI to analyze all of those signals to identify audiences for targeted marketing and advertising efforts.

When Salesforce unveiled its next-generation marketing cloud last year, Krux was one of the partners in its digital marketing and digital advertising ecosystems.

Krux earlier this year deepened its integration with the Salesforce Marketing Cloud, empowering advertisers to match third-party data with customer information on their Salesforce instances.

Krux also entered the Salesforce independent software vendor partner program, which enables customers of both firms to use their customer data to target consumers on the open Web, while also enriching their customer profiles with online engagement data.

The resulting two-way data exchange between the data sets let Salesforce clients consistently increase the value of both their online and offline data.

It made sound business sense for Salesforce to extend the partnership by purchasing Krux.

"Krux's technology has real-time access to extensive customer data, which is crucial to understanding the process a consumer goes through when making a purchase," said Anne Moxie, a senior analyst at Nucleus Research.

"Salesforce will be able to leverage this data with its artificial intelligence offering, Einstein," she told CRM Buyer, "to potentially either make its marketing campaigns more dynamic, so that it can respond to consumer actions in real time, or ... for highly granular customer segmentation."

It will "make targeting more accurate," Moxie noted, "because the neural networks and deep learning models in Einstein can use the real-time data that's collected from Krux for improved campaigns."

Richard Adhikari has written about high-tech for leading industry publications since the 1990s and wonders where it's all leading to. Will implanted RFID chips in humans be the Mark of the Beast? Will nanotech solve our coming food crisis? Does Sturgeon's Law still hold true? You can connect with Richard on Google+.

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