First Take: Adobe Announces Intent to Acquire Marketo
And I thought the most exciting thing happening tonight was going to be the Jets and the Browns. Who knew! Within the last hour Steve Lucas, Marketo’s CEO, sent a letter to customers and partners announcing Adobe’s intent to purchase Marketo. Take that Sam Darnold!
Our first take is that this is a great opportunity for both organizations. For Adobe, Marketo will become an amazing addition to their Marketing Cloud. Marketing Cloud already features the market-leading CMS, Adobe Experience Manager, and the well-regarded personalization engine, Adobe Target. The weak link in Marketing Cloud has always been Adobe Campaign, the Marketing Automation engine they acquired from NeoLane several years ago. Marketo, as the enterprise leader in Marketing Automation, will significantly strengthen their product line-up and fit in perfectly.
For Marketo, I believe this is the best of several possible acquisition options from a customer standpoint. Adobe is very well regarded by clients and employees. They are consistently ranked as a top employer and have a glass door rating of 4.1/5. Unlike the other companies rumoured to be potential Marketo acquisitors (SAP, Microsoft, Oracle), Adobe is almost exclusively focused on Marketers. They know us well and they have a great history of delivering enterprise marketing solutions.
Having been through many technology acquisitions myself (on both sides) there will be some bumps in the road. Familiar faces will undoubtedly leave and there will likely be some chaos for customers and partners. Given the DNA of Adobe, I would think the chaos and disruption will be less than it would with any of the other companies mentioned. Long-term I think Adobe will likely do a great job with Marketo’s product roadmap and will further create distance between it and its closest competitors in the Marketing Automation space.
One of the most important and intriguing things to watch is the relationship between Adobe and Salesforce. Salesforce has emerged as Marketo’s primary competitor. Many IT executives believe Salesforce Marketing Cloud must have strong integration with its CRM platform. We have seen enough organizations struggle in this area and move to Marketo to know otherwise. Marketo was built on the Force.com platform from day one and has a beautiful integration with Salesforce. Continuing to compete with them while maintaining the necessary level of platform support from Salesforce will make for interesting times. The two organizations have become more competitive in other areas recently.
For Demand Spring, this acquisition is seen in a very positive light. We have implemented, optimized, and run Marketo for many high growth and Fortune 500 organizations. We will continue to do so for years to come. We have great relationships with Marketo customers, employees, and technology partners and look forward to continuing these relationships while making some new friends at Adobe.
Our advice to Marketo clients is to not expect much change until the acquisition closes. The organizations are bound to continue working independently and continuing business as usual until it’s approved. Following the close, work closely with your account manager to understand any changes in account coverage and support. Some clients may see some changes to their account management team (just a hunch based on seeing this happen many times) but I would think they won’t see much changes to the product roadmap rollouts Marketo has announced and their support coverage for the first year or so. Overall, I think clients will find this will be a great acquisition in the long-term. Their platform will fit into an organization, that, like Marketo, eats, sleeps, and breathes Marketing. Employee attrition should be lower than it would with any of the other potential acquisitors. And Marketo will be surrounded by great complementary products in Marketing Cloud, while also having access to a robust ecosystem of integration applications that Marketo has built through Launchpoint.
So, first take is two thumbs up to both organizations and to its customers. Now, time to watch the football game. What do you think? Share your thoughts on the acquisition with us.