“CMOs Are The New CIOs” & Other Things The Industry Is Saying About Salesforce’s Deal To Buy ExactTarget
Marketing insiders had much to say about yesterday’s announcement that Salesforce.com will be acquiring ExactTarget for nearly $2.5 billion. Commentaries were offered on everything from the future of marketing automation to the role of email marketing and its continued significance in an organization’s overall marketing strategy. Many feel the deal only reinforces the need for […]
Marketing insiders had much to say about yesterday’s announcement that Salesforce.com will be acquiring ExactTarget for nearly $2.5 billion. Commentaries were offered on everything from the future of marketing automation to the role of email marketing and its continued significance in an organization’s overall marketing strategy.
Many feel the deal only reinforces the need for CMOs to become more technology-focused.
Salesforce Deal Moves Marketing Closer To the IT Department
“On the heels of Marketo’s recent IPO and Oracle’s purchase of Eloqua, Salesforce’s bold move into this space has been anticipated and signals a well-established trend toward further consolidation in the industry,” said Lyris CMO, Alex Lustberg. Lyris offers email marketing, integrated digital marketing, marketing automation and analytics solutions, as well as providing strategic consulting and technical services.
Lustberg added that the Salesforce deal highlights the growing influence of the CMO on technology purchasing decisions. “It will be interesting to track the changing relationship between the CMO and CIO as enterprises seek to harness the power of integrated solutions to derive actionable insights and deliver measurable business growth. There is now a lot more pressure on the CMO to deliver bottom line results,” he said.
Act-On’s CEO Raghu Raghavan agreed that the industry’s focus on marketing software solutions is directly related to CMO’s making more marketing-related technology purchases, “Marketing software is undeniably one of the hottest markets right now and can be attributed in part to the fact that more CMOs are purchasing marketing-related technology and services from their own capital and expense budgets.”
As an ExactTarget competitor, Raghavan was excited about what Salesforce’s acquisition meant for email marketing solution providers. “Salesforce’s acquisition of ExactTarget today is great news for Act-On,” said Raghavan, “The significant premium [ExactTarget’s $2.5 billion value] validates the importance of email marketing in the modern enterprise.”
Raghavan did question what the deal meant for Salesforce.com and ExactTarget clients, stating, “Being that ExactTarget is a legacy email marketing provider and Salesforce has done very little to advance their own platform, where does this leave their joint customers… squarely back in the 20th century. All of the recent activity over the past year in the marketing automation space with Oracle’s acquisition of Eloqua, and then last month’s news of Marketo’s IPO are validation of this red hot space that Act-On is operating in.”
Such industry conditions leaves Raghavan very hopeful not only for his company, but the future of marketing innovation, “To think that only 5% of the market has been penetrated leaves green fields for marketing software vendors to innovate, expand and grow. This is only the beginning of a long and prosperous road for marketing automation.”
Forrester Analysts Chime In
Forrester vice president and principal analyst Shar VanBorskirk, along with her colleague Rob Brosnan, shared their insights on the acquisition in a post on VanBorskirk’s blog for marketing leadership professionals. “We think the deal is a win for SalesForce.com,” wrote VanBorskirk, citing good integration and development possibilities for B2B marketers already using ExactTarget.
While B2B marketers will benefit from the deal, the Forrester analysts believe ExactTarget’s existing B2C clients will not be as lucky. “We think ET clients used to the warm, mid-western nature of their account teams might find the aggressive, silicon-valley nature of SFDC a jarring influence,” claimed VanBorskirk.
She went on to list other issues for ExactTarget clients, including a decline in ExactTarget service quality and the likelihood that ExactTarget’s product integration efforts will suffer in the face of unification efforts to bring Salesforce and ExactTarget together. “ET clients told us that service quality waned when ET staffers were ‘distracted’ prepping for the company’s IPO in early 2012. We expect an even more pronounced dip now as ET works through terms of the acquisition instead of innovating around its messaging platforms and services.”
VanBorskirk also commented on the how this acquisition will impact the industry, with further market consolidation by large players, “By making a bold move into not just automation, but digital media, Salesforce will raise pressure on Adobe, IBM, Microsoft, SAP, and other traditional enterprise application providers to make similar moves.”
The Forrester analysts believe this will only damage marketing innovation and create fewer choices in the marketing-technology arena, “Salesforce can now monetize both seat licenses and media CPMs, and clearly wants to create a billion dollar business line in the marketing cloud. We are likely to see further consolidation this year in response, meaning that marketers will have fewer choices overall, and fewer choices in marketing-technology specific providers.”
ExactTarget Competitor Sees The Silver Lining
Brad Wilson, CEO for Emailvision and former Microsoft CRM GM, has a more positive outlook on the industry.
“Today’s acquisition validates the importance of cloud marketing platforms to businesses,” said Wilson, “The net effect for us is that, in addition to our own direct sales efforts across Europe, America, and Asia, Emailvision will continue to partner with large players like Microsoft and SAP to help them deliver [email, social, digital] capabilities at scale to their customer as well.”
The Salesforce acquisition of ExactTarget for $2.5 billion was unanimously approved by the Boards of Directors for both companies, with Salesforce purchasing all outstanding shares of ExactTarget for $33.75 per share in cash. The acquisition is expected to close at the end of Salesforce’s fiscal second quarter on July 31, 2013. You can read more about the deal in a story posted yesterday on Marketing Land.
Opinions expressed in this article are those of the guest author and not necessarily MarTech Today. Staff authors are listed here.