Suite trend continues with Salesforce $2.5B acquisition of ExactTarget
Got it. Got it. Need it. Got it. The sounds of hockey card collections and Salesforce.com’s (SFDC) approach to business growth as reinforced with today’s announcement of its acquisition of cloud marketing automation platform ExactTarget. This is the biggest price tag paid in SFDC’s long list of acquisitions made in its 14-year history. At $2.5 billion dollars, it is more than three times the price tag of last year’s purchase of marekting platform Buddy Media at $725M.
Now this can’t really come as a surprise to many (anybody). Marketing automation platforms (MAPs) have been the target for the “growth through consolidation” strategy for a couple of years as larger technology companies without explicit solutions for this space have come to realize they need to fill this (perceived) important gap quickly. With IBM taking on Unica, Teradata buying Aprimo, Microsoft’s acquisition of MarketingPilot, and perhaps most notably, Oracle’s Eloqua purchase, it was just a matter of time before SFDC and their affinity for gobbling up companies (26 acquisitions since 2006) bought themselves into the marketing automation game as well.
SFDC had to do this. They have been touting a Marketing Cloud solution that, until now, was missing a few big pieces of the puzzle – email marketing, marketing automation – that have now been filled by the ExactTarget acquisition. SFDC can now offer digital marketing capabilities across email, social, mobile, and the web. Which is good news for its customers. Probably. Their track record of fully integrating the features, functions, and capabilities of the companies they buy has not been stellar.
What about Marketo?
Of the “big three” marketing automation platforms – Eloqua, Marketo, Pardot –Marekto is the only one left standing (alone). So where does this leave them and their $80M IPO? Well they now have a much bigger competitor and one less suitor in SFDC, and I suspect a few other companies (Microsoft, Adobe, SAP) that might be looking at them a little more seriously. It is now a seller’s market, and Marketo’s price tag, if they have one, has just increased, again.
So what’s the fall out from this latest consolidation transaction?
- ExactTarget stock holders are very happy. With an overnight stock price increase of 53% who wouldn’t be happy? Extremely happy.
- SFDC customers, current and future, will have what could be the most comprehensive marketing suite solution … once all the pieces are put together.
- The pure, best of breed, marketing automation industry players are dropping like flies. Who will get scooped up next: Marketo? Neo-lane? Silverpop? And by whom: Microsoft? SAP? Adobe?
Eventually, at least in the marketing automation space, the available companies offering innovative, well executed platforms will run out or refuse to be bought. Then what? Firms looking to expand their current technical solutions to include marketing automation capabilities will either have to build their own or build better integration capabilities with non-partner MAPs. And perhaps in the end, these will be the companies that flourish by not getting bogged down in behemoth organizations and their competing interests, red tape, and divided focus.
Tell us what you think.