It’s a crowded marketing technology space and it gets worse every year. Startups are popping up it seems like every day to combat a specific niche need in the world of today’s digital marketer. To make matters worse (?? – intentional question), the SaaS platforms make it easier for companies to jump in and try/buy/use than ever before. The craziness around it all is that it only gets worse as you get bigger in size. But we also see that best-of-breed platforms are getting used as well, which leads me to the topic for this article. Where do the major digital experience platforms (DXPs) go from here?
Did that say billions?!
I always have some level of surprise when I see the headlines that “So and So” company bought another company for some big price tag. Let’s just use Salesforce and Tableau for example. Any time an acquisition in the MarTech space ends with a “B”, we all take notice. So when Salesforce dropped $15.7B, it’s not just an acquisition, it’s a statement. But like any acquisition, they are made for a reason, and the likely reason is that it fills a gap that the acquiring company has to either fuel further growth or immediate complementary services to add to the bottom line. Thus as you look at all the acquisitions of the last year (and into 2018) of all the major DXPs, you will see a pattern — fill a gap. There are some distinct differences in the gaps being filled and how they fuel further growth for each platform. However, gap filling is the main driver.
The acquisitions of 2019
Here is a quick list of the acquisitions in 2019 by the major DXPs.
- Allegorithmic – maker of 3d material and texture software
- Adobe’s major acquisitions were in 2018 with Sayspring, Uru, Magento and Marketo.
- Hedgehog – a professional services company with Sitecore specific IP
- Sitecore’s major acquisition of 2018 was StyleLabs, a content marketing software company.
- Griddable.io – data synchronization service
- MapAnything – location based workflow software
- Bonobo AI – conversational software
- Tableau – data visualization
- ClickSoftware – field service software
- Insite Software – B2B commerce software
- Idio – a content personalization and analytics platform
- Episerver was acquired by Insight Venture Partners in 2018, which is fueling the acquisitions in 2019.
- AgileOne – a customer data platform (CDP)
- Cohesion – a low-code/no-code development platform
- Mautic – a marketing automation platform
- Acquia was acquired by Vista Equity Partners in 2019 as well, which is fueling the growth acquisition strategy as well.
- None. All of their recent acquisitions were in 2018, the biggest and notable being Qualtrics.
- CrowdTwist – a loyalty software and service provider
- Oxygen Systems – a NetSuite SuiteCloud Developer Network partner
OK, we got all that? So if you dig in, clearly the gaps are what is fueling the M&A. Some are rounding out their core offerings. Others are starting to get really niche in what they need to grow with.
So in my opinion, Acquia and Episerver are growing their core offerings to play with more established players such as Adobe and Salesforce. They both had recent ownership changes by private equity and they are fueling the growth needed to expand in their categories as well as grow into new spaces be it upper mid-market or lower enterprise companies.
Adobe’s sole acquisition of 2019 was very specific to content creation and in a world where they want to grow in the upcoming AR/VR space as that takes hold in 2020 and beyond. For Adobe, 2019 and going into 2020 it is all about integrating their big 2018 acquisitions of Magento and Marketo into a holistic platform with the rest of the Adobe Experience Cloud.
Sitecore’s acquisition of Hedgehog turned some heads in their partner ecosystem. Many thought this was going to change their partner relationship. Turns out it wasn’t so much that as it was to gain some proprietary IP and bolster their customer success efforts. The StyleLabs acquisition of 2018 was the big story of gaining a more robust DAM and marketing services technology.
For Salesforce, clearly the big news was the Tableau acquisition. Adding a big set of customers and adding a data visualization solution to their stack turned some heads, but maybe in jealousy rather than the actual acquisition itself. Data is complex. You can make it tell any story. But when you have the right tools to help decision makers make informed decisions, that makes business run faster and more efficiently. The difference of the other acquisitions of Salesforce is that they play in a lot of places with CRM being the hub. So whether it is conversational software or data synchronization or field service software with ClickSoftware, Salesforce is filling in specific gaps, not big ones.
Finally, I threw in SAP and Oracle only because they are big players, but they didn’t make any big noise in 2019. SAP did make some noise with the Qualtrics acquisition in 2018, but time will tell if that was a good move or not in the grand scheme of things.
Where do DXPs go now?
Disclaimer: Ok, this is where I have to make the statement that I work for a company in which we are alliance partners with many of the companies discussed here. However, all the information I’ve shared is public information. The next section is all personal opinion only based on the public information. I do not have insights into any M&A strategy by any of these companies or roadmaps through any of our partner agreements. All of these opinions are that of my own and not my employer.
It’s hard to say exactly where the major DXPs go from here. In some cases, several can fill in more niche gaps from the MarTech landscape. For companies like Adobe who also have other clouds in their product offering such as Advertising Cloud and Document Cloud, the acquisition front could shift to those to increase share of wallet on related services. Adobe Acrobat and Sign are great back-office softwares. Where else can they grow the back-office space? Adobe doesn’t have a CRM, but they do have a strong alliance with Microsoft with growing integrations of their Office 365 suite of services which includes Microsoft Dynamics.
For other companies such as Acquia, Sitecore, and Episerver, the play could be to continue to get to feature parity with Salesforce and Adobe. That’s a tall order as both Adobe and Salesforce play in so many places beyond the typical digital front-end these companies are known for. I personally also think this is why Adobe and Salesforce are public companies and Episerver, Acquia, and Sitecore are all still private. There just isn’t enough of an offering yet to be viable public companies.
For 2020, I think we will say a balance of a few things happen with the major DXPs.
First, those that have a mature offering will focus on integration of their offerings for better customer success and user experience. Marketers want (myself included) solutions that allow us to not have to rely on developers to create everything for us. We want to be able to do stuff on our own and bring in our dev teams as needed for custom experiences and solutions. So bringing these solutions tighter together to allow us to do our jobs better, faster, more efficiently and intelligently will be key.
Second, for the DXPs where they are playing catch up will need to decide how feature parity they want to go, and how they will differentiate themselves. What makes their offerings different than any of the others. Is it simpler to use? Better licensing models? Integrations with one or more of the thousands of other popular MarTech solutions out there?
Third, we will see more M&A. There are still some great solutions out there that are used by thousands of companies that will get gobbled up. I think anything around analytics and insights is fair game. Data visualization is fair game. Customer engagement solutions for better real-time response and data gathering. Really, any platform that is part of the overall customer lifecycle that can add data value to a DXP platform is fair game. Because with all the data privacy and collection laws coming into play, the more the DXPs can own the data source the better.
I find the MarTech landscape one of the most fascinating spaces in the world of marketing. The technology to allow businesses to discover new audiences, create solutions, market to them, engage, and provide value is nothing short of amazing. It also makes marketing one hell of a tough job in 2020 as well. But as the landscape continues to shift to new channels, ways of engaging customers and prospects change with a changing demographic, the technology needs to keep up too. So whether you make your bet on wearables, voice, AR/VR, 5G, eSports or any of the plethora of channels, the one thing is certain — engaging with a customer base will require technology, data, and creativity. The companies that can offer solutions that fill those areas will find customers. The DXPs that can offer a tightly integrated platform around those areas will also win, but only if it works together and isn’t clunky.
Here’s to 2020 and the rollercoaster ride ahead. Cheers.
This post originally appeared as a LinkedIn published article.