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What’s in Store for BloomReach + Hippo?

My colleague Jill Finger Gibson has done a great job analyzing the challenges and opportunities presented by the late October acquisition of WCM vendor Hippo by Silicon Valley’s BloomReach, which offers a commerce-centric personalization platform. Not the least of those is the perrenial question when a company is acquired: What does it mean for the existing customers?

So it was a happy coincidence (I presume) that the European version of Hippo’s Connect event took place last week in Amsterdam, not twenty days after the deal was announced. Customers, partners, and prospects certainly had a powerful incentive to attend and meet the new owners.

Some initial good news: On a kickoff cruise around the Amsterdam canals, no one jumped (or was thrown) overboard. And the good vibes continued throughout the event. Hippo co-founder and CEO Jeroen Verberg recalled how he felt like he’d found “another Hippo” — that is, a smallish company that cares intently about both its customers and its employees — when the merger talks began. BloomReach CEO Raj De Datta (the link is to his personal blog) was warmly received, even if no one believed his claim to have pulled together his twenty-some slides in the cab on the way over. And in a clear sign that BloomReach has no intention of doing to Hippo what Gordon Gekko did to Blue Star Airlines, it was repeatedly emphasized that Hippo is hiring in Amsterdam.

That’s one indication that BloomReach (wisely) intends to use some of its ample VC funds (Jill reported a $56 million Series D round was completed in January of this year) to nurture and grow not only the planned joint platform but also Hippo’s well-respected content and customer engagement solution. To answer that perrenial question, the fact is that many of Hippo’s customers can do just fine without the intelligence provided by BloomReach’s machine learning capabilities, let alone the commerce tools in particular. As long as the joint product roadmap does not lose sight of the need for and value of “stand-alone” WCM, Hippo’s current customers have little to worry about. (On the other hand, I spoke with a representative from a large European ecommerce firm, and they’re very interested in what will reportedly be added to Hippo.)

As for my title question, well, you know what they say about the difficulty of making predictions that are about the future. The only honest answer is “time will tell.” In the meantime, here are two other observations from the event.

Time to pull the finger from the dike?

As noted, this was Hippo’s European “digital experience conference” — there was also a North American version in Boston. But if you take that notion seriously, you could be forgiven for concluding that Europe has been taken over by the Dutch. (There were some non-Dutch speakers present; we were slightly less rare than Oscar nominations for a Michael Bay film.) Of course, it’s not surprising that Hippo has found the vast majority of its success in the homeland — the same is true of Episerver in Sweden, and was initially the case for Sitecore in Danemark and the Nordics more broadly. But, precisely as Sitecore has proven, the key to making an order of magnitude jump — from 10s of millions to 100s — lies in significant penetration into other (large) markets. (DCG analyzed the acquisition and €1 billion valuation of Sitecore here and here.)  In that respect, it will be important to chart whether BloomReach invests to accelerate Hippo’s growth in the US and Germany in particular.

Will the GDPR be chilling or thrilling for the new company?

Think of that famous early movie of two trains colliding head on. That’s how I visualize the current push for (if not mania about) personalization when it meets the personal data minimization requirements of the GDPR in May 2018. (For a quick introduction to the General Data Protection Regulation, see our free Executive FAQ. There’s also a podcast, a webinar, and our educational workshops.)

As a reminder: Although it is an EU regulation, the GDPR applies to any company that has anything to do with any resident of the EU. That would mean many of BloomReach’s current customers, and most of their highly attractive prospects going forward. As companies (slowly, so slowly) wake up to the clash between today’s data maximization practices and the rather severe restrictions dictated by the GDPR, currently innocent expressions like “personal data platform” or even “personalization” in general could become, as they say here in Germany, “boo words.”

Fortunately, my initial sense after two conversations with Raj De Datta is that the joint company can avoid running aground on the shoals of the GDPR. They don’t yet have a thorough understanding of the regulation and its implications for customers (very few do). But De Datta professed a long-standing preference for non-personal data — which is available in troves, and isn’t affected in the least by the GDPR. I’ve advocated, in fact, that personalization should not be based on using personal data to peer into the souls of individual consumers, but rather on making the seller more personable — e.g., by demonstrating they can be relied upon to help the consumer reach their goals or accomplish their jobs to be done.

Clayton Christensen’s new book, Competing Against Luck, is about this jobs to be done (JTBD) theory, and how it can be applied to derive causal (rather than correlative) insights into why consumers buy (or “hire”) certain products rather than others. Guess what? De Datta has an MBA from Harvard, where Christensen was his thesis advisor. Hope springs eternal.





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