Imagine you’re a military commander and you have been given a dangerous search and rescue mission. Do you ask for a highly trained team of Navy SEALS, who have long been part of the same unit, with each member possessing specialized skills that the team knows how to coordinate efficiently? Or, do you hire a bunch of individually skilled mercenary soldiers, with no history of working with each other to carry out the mission. In this scenario, the first option seems like a no-brainer. Of course you go with the Navy SEALS.
Now, let’s picture it in a different way. You’re a rich tycoon who wants to own a basketball team that will win an NBA championship. Do you go out and buy a team that has a really good track record, with a few amazing players and some mediocre ones? Or do you assemble a crack team of specialists, buying the best players in every position from several different franchises to give you the best shot of winning? Suddenly, option B looks way more attractive.
The big enterprise tech companies such as Adobe, Salesforce, and Oracle would like marketers to believe the first scenario is true, and that these vendors can truly offer the best all-in-one marketing platform to fulfill an entire company’s marketing needs. On the other hand, marketing software makers such as Marketo, HubSpot, HootSuite, and Spredfast, which all focus on one specific marketing function (for example automation, analytics, and social media management), would try to convince you to assemble a collection of “best-of-breed” solutions for each marketing function. The argument these single function platforms make is that no marketing suite can offer the top tools for every marketing activity, and that by buying a digital marketing cloud the customer is depriving themselves of the freedom to create a diverse software portfolio of their own choice.
So which buying strategy is ultimately the best one for a company?
The appeal of an integrated marketing cloud
For the last few years, legacy enterprise technology companies Adobe, Salesforce, Oracle, and IBM have been embroiled in a digital arms race toward developing the first fully integrated suite of digital marketing tools, referred to as a “marketing cloud.” The ideal vision for the marketing cloud is to provide solutions for every marketing function of a brand, such as web content optimization, social media management, email marketing, and online advertising. Not only should the solutions work together, they should also share data across all the different channels, and store it in a single, central repository.
However, as we’ve discussed in detail on The Hub (Who is winning the marketing cloud wars?) no single company has been able to achieve this vision yet, although they are all working furiously to get there with varying degrees of success.
Despite the fact no one has got there yet, Gartner analyst Jake Sorofman says it’s a worthwhile endeavor since, in theory, an integrated marketing cloud is an attractive buy.
“Marketers have an appetite for simplicity,” he says. “There is a desire to buy integrated hubs that address the common use cases right out of the box, and that’s the opportunity for the big vendors in this space.”
As an example of the attractiveness of an end-to-end integrated system, Sorofman cites the strategy of Apple, which enabled users to sync their activity across several devices and systems in an elegant fashion.
“By vertically integrating the hardware and software, Apple was able to deliver a seamless-ness and reduce the surface area of the user experience,” Sorofman adds. “You simply can’t achieve that in a much more diverse environment for platforms.”
The argument for “best-in-breed” open platforms
Despite the attractiveness of an all-in-one solution, Sorofman says it isn’t necessarily the best way to implement technology. If, at one end of the scale, you have the completely integrated (but closed) marketing cloud that performs all marketing tasks and, on the other, you have marketing tools that are the best in only one function, the ideal somewhere is in the middle.
Sorofman says extensibility, or the ability to integrate your platform with third-party software is a big demand from customers. He singled out San Mateo, California-based Marketo as the embodiment of this model. Marketo is a leading multichannel marketing-automation software company, but its biggest selling point is its ability to host third-party vendors on top of its main software. It has also emerged as the de facto leader of smaller, independent open platforms taking on the big marketing clouds.
“Marketo’s view of this world is correct,” says Sorofman. “It recognizes there are certain things it is going to do exceptionally well, and then it has third-party vendors who can add value on top of that.”
Marketo’s CMO Sanjay Dholakia doesn’t mince his words when it comes to pointing out flaws with the big marketing clouds. Referencing Sorofman’s sentiments about marketers craving simplicity, Dholakia says these systems deliver exactly the opposite.
“The marketing clouds are a collection of separate acquisitions that were in no way connected to each other,” he says, referring to the spree of software buying from Adobe, Salesforce, Oracle, and IBM. “Compare that to Marketo’s customer engagement platform, which has been architected from the ground up to be a platform that is a single system of record for marketers.”
The difficulty of integration
Dholakia says the strategy of buying a series of very disparate tools and trying to get them to work with each other is a tough trick to pull off. Even if the marketing clouds were to achieve the coveted complete integration, it isn’t happening anytime soon. “There’s not a lot history to suggest that will ever happen,” he adds. “The technology for all the marketing cloud solutions is built separately and independently, with different code lines and stacks, and the ability to integrate all of that is extremely difficult.”
With all that time spent working on integration, Dholakia says marketing clouds cannot focus on innovating, which means they will always be playing catch-up with the so called “best-in-breed” platforms that are constantly releasing new features and updates.
Despite Dholakia’s unsurprising skepticism, the integration process for marketing clouds is coming along faster than most people expected, at least for Adobe. It recently announced integrations between its Analytics, Target, Social, and Media Optimizer platforms, and it is well on track to becoming the first to offer complete integration.
Salesforce might be slower, but it is offering the integration of its Marketing Cloud with its other enterprise software solutions, the Salesforce Sales Cloud and Service Cloud. This means that, while it might not offer complete integration solely for its marketing solutions, it does incentivize its many Sales Cloud customers to add at least one marketing solution to integrate with their CRM platform.
Slowing rate of innovation
Salesforce also recently announced an integration of its two leading social media marketing platforms: Buddy Media and Radian6. But, as Dholakia predicted, this integration process took too long, and platforms such as Sprinklr and Spredfast are already offering the social media publishing and listening capabilities the newly integrated Buddy Media and Radian6 platform just started providing. This is in stark contrast to the days before Salesforce acquired those two companies, when each was regarded as the pioneering technology in its field.
That’s one of the biggest disadvantages of getting acquired by a large technology firm, says Spredfast CMO Jim Rudden, who himself came from a software company that was acquired by IBM.
“Once you get inside that bigger company and cloud, decisions stop being made in the best interest of the customer,” he adds. “The rate of innovation, especially in the social media space, is tremendous and the marketing clouds have struggled to keep pace with it.”
Rudden says it’s not enough for companies to just offer a basic social media management platform without fully focusing on developing its capabilities. “We have 140 engineers working on innovating for social media marketing all day, every day,” says Rudden. “You can’t afford to dabble in this space.”
Hey! We’re an open platform too
Last month, Ryan Holmes, CEO of HootSuite – a popular social media management platform, and one of Marketo’s integration partners – published a blog post on the company’s website where he wrote:
“The ‘ultimate marketing suite’ is always going to have weak links. No single vendor can hope to offer best-in-class social media tools, data analytics, customer relationship management, marketing automation, etc. all in a single package. The technology is simply too fluid and the scope too vast for any one suite to represent a definitive solution. Some pieces of the suite will be strong; others will be weak. But you’re stuck with them all.”
The next day, the post was mysteriously taken down for several hours and when it finally came back up, this passage had been removed and replaced with much more diplomatic words. Why would HootSuite’s CEO back down from his comments?
A good guess is that marketing clouds aren’t really closed platforms anymore, so his criticism would have been invalid.
Salesforce has been allowing third-party integrations with its marketing solutions since 2012. And, earlier this month, Adobe announced it too was opening its platform for integration with a select number of partner vendors. This is a far cry from last year, when both Adobe and Salesforce were enthusiastically promoting a future where a marketer would never have to go outside their marketing clouds for additional solutions. By opening their platforms, Adobe and Salesforce are trying to have it both ways, readily proclaiming that they have the best-in-breed solutions for every marketing function, but at the same time giving clients the option to use another solution if they want to: thus answering one of the major criticisms of the marketing cloud.
“We don’t necessarily want to make marketers switch out other solutions that are entrenched within their organization in order to adopt the best things about us,” says Chris Wareham, senior director of product management, Adobe Analytics. “We want you to be able to do that on your own time, and we intend to have enough value in our products’ capabilities for marketers to make that choice.”
Salesforce also has a similar open-platform strategy, which begs the question, why would these marketing clouds invest so much time, money, and effort in acquiring a bunch of platforms and trying to integrate them when they could just focus on one core competency and allow third-party vendors to integrate on top of it, such as Marketo?
“Having an open platform is just as crucial to our customers’ success as it is to ours,” says Gordon Evans, VP marketing for Salesforce ExactTarget Marketing Cloud. “We provide customers with a full suite of digital marketing products across channels and devices, as well as offering them the ability to take advantage of our partner products in order to customize their assets to meet specific digital marketing needs. We know there’s value in allowing integration with our products and fostering a healthy ecosystem.”
Forrester analyst Cory Munchbach says the big marketing clouds have no choice but to offer third-party integrations, since none of them are fully integrated enough to claim extra value for the customer.
“They recognize that’s the reality of their customers,” says Munchbach. “If they want people to buy from them, they need to be able to play in the sandbox with whatever their customer currently has.”
From a strategy point of view this makes sense, as it allows Adobe and Salesforce to expand their footprints into marketers’ software portfolios. Once they have a toehold, it makes it easier to upsell their other platforms, especially with the lure of complete integration capabilities.
The shift toward becoming an open platform is also a subtle concession from the marketing cloud companies that they don’t quite have all the answers yet.
“If you read between the lines it’s really a confession that buyers aren’t buying everything they have, and not everything they have is best in breed,” says Munchbach.
So who should be using the integrated marketing clouds?
Right now, the short answer is nobody. At least, not in the way the “marketing cloud” has been envisioned, which is as a tightly integrated, all-in–one marketing platform that contains the best solutions for each marketing function. No one company is offering that yet, although Adobe, Salesforce, Oracle and IBM all offer solutions that on their own can be regarded as the best in their field. In practice, most brands are better off picking and choosing a separate platform for each marketing channel, whether it’s rated “best of breed” or just uniquely suited to their needs.
“I’ve never talked to a marketer who is close to using one vendor’s entire suite of products. At max, we are talking one, two, or three in their stack,” says Munchbach. “It’s still a point solution approach, though marketers do care how those individual solutions will integrate with their other software.”
The irony is that, even though the marketing clouds are built with enterprise-level customers in mind, that type of all-in-one platform is ideally suited to small and midsize companies that need basic solutions for multichannel marketing and aren’t dealing with a lot of complexity. In those cases, small businesses don’t need best-of-breed individual tools; they just need a single integrated platform that takes care of all their basic marketing needs. However, that segment can’t afford the enterprise marketing clouds and, besides, they are already well served by mini-marketing clouds such as Act-On, HubSpot, and Sitecore.
The best advice now is to wait until the first truly integrated marketing cloud is developed and see whether it can generate greater value than the sum of its parts. Until then, the recommendation is to go à la carte instead of prix fixe when it comes to buying your enterprise marketing software.