I am still catching my breath. Adobe has agreed to acquire Marketo for USD 4.75 billion. The deal is the biggest in Adobe’s history, and a massive encore to the acquisition of Magento for a mere USD 1.7 billion in May. On the one hand, I find myself proud to be a B2B marketer — to think that helping folks like me be more successful is worth USD 4.75 billion. On the other hand, you’ve just gotta wonder about that number. My colleagues Joe Stanhope and Rusty Warner — both of whom know a lot about Adobe and focus on B2C marketing — immediately got together to share our initial thoughts:
So, in how many ways does this benefit Adobe?
We believe there are three sources of long-term value for Adobe:
How does this change the marketing platform landscape?
Adobe’s strength and reputation with B2C focused firms are well established. Adobe is a leader or strong performer in a staggering 13 Forrester Wave evaluations of marketing, digital experience, and analytics categories. Marketo provides an additional outlet for these capabilities but Adobe is already so entrenched that it doesn’t significantly alter its fundamental trajectory or competitive outlook.
But for B2B marketing technology buyers and vendors this acquisition fundamentally resets the competitive playing field. Actions Adobe has taken, and investment they have not made over the past few years had rendered Adobe a non-viable vendor for the majority of B2B marketing use cases. That didn’t mean that Adobe couldn’t sell into B2B marketing companies or B2B2C marketing companies where marketing practice is closer to B2C use cases (more email, less account-based marketing, less complex contextual nurturing, etc.). But, now, it will be able to compete in the B2B marketing cloud business against Salesforce, Oracle, and SAP.
What should Marketo customers think in the short term?
In the near term, Marketo customers should be delighted. Marketo’s exit from Vista occurs while marketing technology is making an existential shift. There is a lot of buzz about the number of vendors in the marketing technology landscape. But, that really masks the reality that marketing automation platforms are folding into integrated enterprise marketing software suites, which themselves are consolidating. This trend is well underway as vendors like IBM, Oracle, Salesforce, SAP, and of course Adobe bring fulsome portfolios to market under a “marketing cloud” banner. The market now rewards breadth and scale, and only a few marketing technology vendors have the technical capabilities and resources to compete. There is not much room for an independent platform to compete as a best-of-breed point solution, no matter how important the breed or how best the solution. Frankly, Marketo was running out of potential landing spots when it came time to exit Vista, as most of the major marketing cloud vendors had already filled their B2B portfolio gaps in other ways. This acquisition ensures that Marketo (the product, the people, the vision, the passion) has a secure future.
What should Marketo customers think in the long term?
It’s time to choose your cloud, and the good news is you’ve never had more or better options.
Forrester’s Lori Wizdo, Vice President, Principal Analyst, Joe Stanhope, Vice President, Principal Analyst, Rusty Warner, Principal Analyst contributed to this blog, which is also here.
The views and opinions expressed in this article are those of the authors and do not necessarily reflect those of CDOTrends.