2019: Consolidation Will Continue

The worthy Scott Brinker, known to all as Chief Martec, takes a broad-minded view when it comes to consolidation in the marketing tech space.

In April 2018, with the publication of the annual supergraphic, he noted that consolidation had “failed to materialize…again.” By September, he was predicting that 25 percent of the market will “‘euphemistically’ consolidate within [the] next 12-18 months.” By “euphemistically,” he means the sale or closure of under-performing start-ups. 

This is not to take a shot at Scott, a shrewd observer of the scene; more to note the nuance in his thinking. After all, he does acknowledge that the space can consolidate and expand simultaneously — a paradox, he called it. And this is a complex, often confusing, always fast-moving market.

For myself, I hope and believe I’ve stuck with the consolidation position over the past few years, while acknowledging (the paradox) that the relative ease and rapidity with which niche, cloud-based solutions can be launched can give an appearance of viral growth. X, Y, and Z may be start-ups on paper, but they’re very often tools looking for a tool-kit.

Big moves in 2018

It’s worth looking at what’s happening in some high profile sectors. Take a look at marketing automation, social media management, CDPs, and ABM solutions. Yes, the sectors are crowded, but how many key players are there? Isn’t it already clear, by and large, who the winners are? Or at least the serious contenders. And even winners can get swallowed whole.

On most list, Marketo was a top three or four player in marketing automation in 2016 and 2017, yet in September 2018 it was gobbled up by Adobe for $4.75 billion. That’s a big meal to digest, with tens of thousands of customers making up the enthusiastic Marketing Nation (Marketo’s equivalent of the Beyhive). The announcement was preceded by rumors, including a bid by SAP (a tale discounted by an SAP executive in conversation). How easily a major independent is wiped off the list, although the name and the brand persists (as “an Adobe company“).

That was the biggest headline of the year, although Adobe had already grabbed attention by adding Magento to the Experience Cloud back in May, unveiling a fuller integration in October.

SAP did open its coffers to acquire CallidusCloud, now SAP Sales Cloud, following the far-sighted pick-up of ID management platform Gigya in November 2017. Added to the Hybris commerce solution, SAP was able last year to parlay these acquisitions as an integrated front-office suite, SAP C/4HANA, mirroring the back-office SAP S/4HANA suite. And in a final flourish, it paid a staggering $8 billion in November for Qualtrics, an across-the-board experience management solution, encompassing customer, employee, brand, and product experiences.

Not to be left out, Salesforce absorbed CloudCraze, Mulesoft, and Datorama. The first of those buys was hardly a surprise, CloudCraze for eCommerce being a native Salesforce application. Mulesoft and Datorama represent two approaches for integrating data source across the platform. Mulesoft is an integration platform for engineers to build new APIs and bridge cloud and on-prem applications; Datorama serves as a front-office facing “single source of truth” on the customer, drawn from multiple data sources.

Yes, I know about IBM and Red Hat, but if anyone can discern their long-term strategy in relation to customer experience, let me know.

Prospects for 2019?

Are the big beasts going to snooze and digest (and integrate), or are they still going to be on the hunt in 2019? I’ll take a leap of faith and say the latter. There are some obvious gems out there, with high, even Marketo-level, profiles.

  • Are B2B automation platforms like Oracle Eloqua going to continue to partner with independent ABM providers, or will they move to bring sophisticated ABM resources inhouse?
  • Are the big marketing clouds interested in adding advanced conversational commerce capabilities to their portfolios?
  • Does any one of the big marketing clouds currently offer email marketing solutions which are the equal of some of the independent solutions out there?
  • The big marketing clouds might need to hone their next-best-action capabilities, but I think acquiring a big AI specialist is going to be difficult.
  • And if you’re thinking about unicorns, the question is when they’ll go public, not when they’ll be eaten alive.

Read the runes, folks, read the runes.  (And we’ll check in with all of this next December.)

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