Oracle's recently announced acquisition of Taleo for $1.9b at 5x sales points out 1) the customer's migration to The Cloud, and 2) how far behind Oracle is in their cloud development efforts. Taleo's acquisition follows the October acquisition of RightNow Technologies for $1.5b.
Taleo focuses in the HR area: primarily the recruitment and tracking of job applicants. RightNow Technologies makes online customer management software.
SAP, Oracles' across the pond rival, purchased SuccessFactors for $3.4b in December. SuccessFactors makes "business execution" software. Last year's revenue was approximately $300 million, which makes for quite a multiple of sales.
Both companies have the cash flow and profitability to fund these type of acquisitions for years to come. And the infrastructure to capitalize on the acquisitions, more than justifying these impressive valuations.
For more, see Tien Tzao's "Strategic Titans Validate Cloud" in peHUB.