Archive for December, 2010

Will The Marketing Automation Space Consolidate In 2011?

Earlier this year in August, IBM bought Unica for $480M. Unica is not necessary a pure marketing automation play, but it take a significant market share in the marketing management space. In a market review by Forrester in September 2009, Unica was repoprted to have $120M in revenue for 2008.

Now in the last 24 hours, we have seen Salesforce.com buying eTacts and Teradata to acquire Aprimo for $525M.

eTacts is a small email contact manger that could help Salesforce building a better marketing product. Everybody on the street agrees that Salesforce is weak on teh marketing side. They always wanted to stay out of that market, relying on 3rd party vendors. But now that the industry is growing quickly, it would not be surprising that they think about entering this market with a better product.

Aprimo was among the leader in larger marketing automation software. In the same Forrester market review Aprimo had $55M in revenue coming form 180 clients, of which 70% were above $1B in revenue. Aprimo was clearly for the large enterprise. SO either they grew significantly over the last 2 years to justify a higher price than Unica, or the whole market is boiling…

Now if IBM and Teradata are moving in that direction, and I suspect them to do so because marketing automation is a huge data driven initiative, I wouldn’t be surprised to see other players make a move as well. Among potential targets, there is Eloqua, Marketo or Silverpop that are possibly ahead of the curve.

Marketo is the fastest growing marketing automation platform. They are racking up client very rapidly, for a total of more than 800 now. They announced multiple funding rounds (up to E series) over the past 2 years for over $50M, which means that investors will look a an exit at a high price, and possibly not to hurry to go out. And Marketo need time to growth is Enterprise customer base.

Eloqua is the “oldest” player. They have been around since the late 90s. They tried to to go public but were never able to due to market condition. They announced about $40M in 3 rounds.  Investors are probably looking for an exit due to the time it has been since first investments. But they are loosing ground to newer player like Marketo and that could hurt their valuation.

Silverpop is reported to have over $50M in revenue in 2008, which was among the biggest at the time. That could give them a high tag price if compare to Unica and Aprimo acquisition.

I believe that this will set the tone for 2011 in the marketing automation space.

Tags: ,