Mark Lancaster, CEO of SDL, says he loves culture, and whenever a company like SDL buys up another, smaller company, the cultural integration is the real key to a successful acquisition.
It takes 2-3 Years to Integrate Acquisitions
Lancaster met up with CMSWire at the SDL Summit in June, and the honesty he displayed about the company he co founded and has been running for two decades was almost refreshing. He showed off this side of his character during the summit's keynote, and afterward, talked with us about the Tridion integration back in 2007, and the company's most recent buy of Bemoko, a mobile content optimization provider.
During the Tridion integration, SDL found out just how important culture is in big company buyouts. Tridion is a CMS, and here was SDL, a translation company buying it out. Furthermore, as Tridion was based in Amsterdam, there were actual social culture barriers that had to be broken down, Lancaster said. Not that there was anything major the two teams had to overcome when the deal went down, it simply takes time for the teams to really acclimate themselves. As a matter of fact, it takes 2-3 years, Lancaster said.
Specifically, Lancaster noted the difference between enterprise selling and Sass distribution, when reminiscing about the Tridion deal. Tridion was a bound to be global company, Lancaster said, the kind of company that fits in well with the multilingual heritage of SDL. It turns out the Tridion integration was as taxing culturally as it was technologically.
As to the Bemoko buy, SDL's latest acquisition, Lancaster said its integration would be completed by mid 2014, and he anointed an end of 2013 date for the integration of Alterian and Tridion, as well.
SDL's Troubling 2013 1st Half
SDL revealed some of its first half numbers just a week or so after the Innovate Summit, and the results weren't good. SDL profits are projected to be about 50% to 60% off of what analysts had been expecting. The company would still be profitable Lancaster noted in a statement about the numbers, continuing on by saying part of the problem was the company hadn't invested in sales and marketing the last two years.
Lancaster said as much during our interview, before news broke of the poor first half showing.
"We don't do marketing well, and we don't do sales well," he said plainly.
SDL might just have the man to help out in that area, considering it hired Grant Johnson as CMO in April. Johnson came over from Pegasystems, a business process management vendor, where he had been CMO for the last three years. Pegasystems had seen impressive growth during Johnson's tenure, but the company had been growing at a similar rate before 2009, when he was hired.
Over that same time frame, SDL has also grown steadily, with most of that coming in increased revenues from the company's Language Services and Campaign Management, Analytics and Social Intelligence segments. Of course, the campaign management and analytics capabilities are part of the Alterion buy, a system that, as noted above is not yet fully integrated into Tridion.
"The data integration is there, but it's not really nice and tight," Lancaster said.
"We're architecting and developing a ground-level up kind of integration, and not just plugging the two APIs together. So we're pretty excited."
SDL as a CXM Platform
Now that SDL has its campaign management and social bases covered with Alterian, and its mobile bases covered with Bemoko, what else does the company need? How about CXM or marketing automation tools?
"CXM is kind of a strategy, and we span quite a lot of that customer journey, but you can't have all the pieces; there's loads of pieces there," Lancaster said.
We want to make it so if one of our customers is in one of our products, and they want to access the functionality of another product, it's seamless to them. So all our products will have the same navigation, the same frames, the same look and feel and more or less single log in."
As to any marketing automation tools, Lancaster again balked, saying the marketing world simply moves too fast for SDL to invest in right now.
"We won't have a marketing gap, but how feel about it -- it's a very broad topic," he said.
"We have a relationship with Engaged Sciences, and that's for posting ads to Facebook and things like that. That was really hot, even less than a year ago. But in the future, is it going to be Facebook or something else?"
It's very fast moving, and the small companies are doing things really well, he noted.
"If we were to get into it, we would spend all our money, time and research keeping up with them. If we partner, we can then establish which of these channels is going to be the most important, and then we can invest in those channels if we choose to."
The idea of partnering was prominent in Lancaster's Innovate Summit keynote, so it seems he is certainly serious about investigating more social and marketing tools, but for now he seemed content with what the company was doing, despite the poor first half 2013 financial showing.
So, where is the company growing?
"We're seeing more licenses in Europe, but for smaller dollar amounts," Lancaster said.
"We're also seeing some traction in Japan. People are buying our stuff in niches, and most are buying based on Web content management issues, not the much newer customer experience management idea."