2015-4-feb-shinking-dollar.jpg

Don't be intimidated by Scott Brinker's latest marketing technology landscape.

Many of the 1,876 vendors will fold, others will merge and be acquired and the landscape will shrink because of it, some industry players told CMSWire.

"Many will fail," said Charles Nicholls, senior vice president of product strategy for hybris and SAP Customer Engagement and Commerce.

"In the Wild West, new vendors are experimenting with new ways of doing things. Not all of these work -- look at Facebook storefronts for example -- and some will flop spectacularly. Caveat emptor, there are many snake oil salesman promising the earth. Look for a solid measurable return-on-investment (ROI) that you can prove before committing."

Going, Going, Gone?

2015-4-February-CharlesNicholls.jpg

Many vendors, Nicholls added, will consolidate via mergers and acquisitions. 

"There have already been many mergers and acquisitions  (M&A) in this space as vendors that ‘find the magic formula’ and are able to unlock spectacular ROI are gobbled up by larger vendors looking to extend their portfolios," Nicholls said. "While the economy continues to head in the right direction, expect more M&A in the space."

Nicholls doesn't see marketers wanting multiple point solutions that scatter data across the cloud unless the point solution provides some piece of value than cannot be delivered by one of their existing vendors.

"Over time," he said, "larger vendors will build ‘good enough’ solutions that capture most of the value of point solutions."

Nicholls doesn't see all doom and gloom. He called the marketing technology space "vibrant" and sees "new opportunities spring up all the time."

"And because of that it’s a place where startups can thrive," he said. "Larger companies cannot react as quickly to build new technologies and tend to be bound by what has worked in the past, making them reluctant to reinvent products that could impact their particular golden goose. We can expect a continually evolving landscape of vendors responding to new opportunities driven by the incredible pace of change."

Landscape Critique

2015-4-February-Gerry Brown.jpg

Some are not convinced by Brinker's marketing tech landscape itself, however. 

Gerry Brown, senior analyst for customer engagement and marketing technology at London-based Ovum Research, waxed philosophical when CMSWire showed him the marketing technology landscape graphic.

"First of all you need to define what marketing is," Brown said. "Is it business intelligence (BI) and big data, for example? Few if any of the BI vendors named would count themselves in the ‘marketing technology’ category. BI tools are more common in a finance department setting, and are used in supply chain, procurement and virtually every functional department. A generously wide definition of 'marketing' has been used. 'Operations' might be more appropriate?"

Brown said he recognizes only about 100 of the vendors in Brinker's landscape.

"This is the long tail of mainly hopeful one-man-bands," he said. "If you were to do a similar graphic for the gaming industry there might be 5X (10,000) on the chart."

Brown said he found some vendors duplicated in the graphic. And while it's right to point out that there are many vendors in many categories, few observers, Brown said, would say there are in practice as many as 42 categories as is claimed by Brinker. 

"Unfortunately these kinds of graphics encourage such vendor concentration and do a disservice to the many small innovative marketing technology vendors out there," Brown said. "The graphic implies 'go with a large vendor as there is too much risk associated with a small vendor which may go out of business or be acquired at any time.' Or alternatively employ an analyst or consultant to guide you through the mire."

Brinker's Response

2015-12-January-Scott Brinker.jpg

Brinker, responding to Brown's thoughts, said he de-duped all the major vendors in the 2015 version by lumping them into a single Platform/Suite category.

Brinker, the author of the Chief Marketing Technology Blog, organizer of MarTech, a marketing technology conference, and the co-founder and chief technology officer for Boston-based ion interactivesaid that Adobe, IBM, Oracle, Salesforce, etc. all appear only once in the graphic.

"My intention for doing that was both to acknowledge that those vendors have a disproportionately large market presence relative to most others; and to show more of the small, innovative marketing technology vendors everywhere else on the landscape," Brinker told CMSWire. "So 1,876 is the de-duped number."

Brinker said he's heard a lot of criticism of his graphic, "most of which I agree with."

"But saying it's a disservice to the many small, innovative marketing technology vendors out there is a new one," he told CMSWire. "On the contrary, I think the key point of the graphic is to demonstrate how many companies are innovating in the space."

Brinker said he does agree with the criticism that the categories are arguably arbitrary and fuzzy.

"This is a space that's very hard to categorize," Brinker added. "As I mentioned in my post when I published it, I'd be tempted to do away with categories entirely, but at this scale, no categorization actually seems worse than imperfect categorization."

Growing Middleware

2015-4-February-Dan Gilmartin.jpg

Brinker in his research discovered big players "co-opting many smaller companies as ISVs," making it easier for integration. A cluster of "marketing middleware" technologies have emerged, he found, "to make best-of-breed marketing stacks more manageable."

Dan Gilmartin, chief marketing officer of Boston-based BlueConic, which is included in the Brinker graphic, said he was not surprised to see the growth in middleware that Brinker highlights.

"As a marketer, I am keenly aware of and attuned to the importance of keeping the user at the center of marketing," Gilmartin told CMSWire. "I see this category development as an evolution of traditional CRM where inputs are as important as the prescripted outputs."

Marketers making connections between a user profile and the actions users take will drive the decisions marketers focus on in increasing/improving user engagement, Gilmartin added.

"In-context and in-time response to customer inputs are necessary to deliver a great user experience," Gilmartin told CMSWire. "We think that if a marketer has the tools to create a centralized and progressive profile store, their outcomes will be vastly improved when connected to multiple ISVs."

Bring on the Suites?

Is the middleware category -- coupled with more powerful point solutions -- a threat to the larger suites?

"I suspect we will see some more strategic M&A from the suites, as well as some activity from the want-to-be suites," Gilmartin said. "The ISVs will have to not only prove value in what they deliver, but also interoperate across the CPD/DMP category to distinguish themselves from the crowd. In the end, the marketer needs to know their customer, understand their behaviors across channels, sessions and devices, and be able to engage on the customers terms. This requires a harmonized technology effort, which is a promise of the cloud, and is not restricted to suites."

2015-4-February-Lori Wizdo.jpg

Lori Wizdo, principal analyst for Forrester Research who covers marketing technology, said the middleware category Brinker reveals "has more implication for the future than impact on the present."

"I think the present proliferation was in part fueled," Wizdo told CMSWire, "by the open architectures of a few dominant 'process management' engines for CRM (Salesforce and Microsoft Dynamics) Marketing Automation (both on the B2B and B2C sides of the market). The marketing tech vendors have all been pretty savvy about making sure it was easy to plug into these core systems for sales and/or marketing. So, it’s much easier for a marketing director to grab, implement and operationalize a new tech solution."

Market Slowdown

Wizdo sees the consolidation of "point solution" into the portfolios of the marketing suite vendors slowing the market down over time.

"As the portfolio footprints get bigger," the Forrester analysts said, "the percentage of need that is covered by one vendor rises and most buyers prefer to deal with fewer larger vendors, so the opportunity space for new start-ups will shrink. It won’t ever go away, of course. A company as big as SAP has over 3,500 partners, for example."

Who Wins?

How will these vendors survive?

Wizdo says the tech start-ups that deliver new tech and new solutions slightly ahead of known needs will make it. "There will always be new channels, new devices, new sources of data and new tech advances to leverage," she said.

Mid-range tech solutions -- the companies in the partner ecosystems of the bigger players -- must serve a big enough niche with a best of breed solution.

And for the larger, consolidated players -- which Forrester calls the “enterprise marketing management suite EMMS vendors" -- the source of competitive differentiation will be at the architectural level, Wizdo said.

"The winners," she said, "will be those companies who make it easier for an enterprise to build a customer engagement infrastructure by delivering a platform that handles a few core functions -- process automation, real-time, multi-channel interaction management and, perhaps, customer data platform -- and is open to and extensible with a smaller set of the point solutions than currently exist in the market."

Creative Commons Creative Commons Attribution 2.0 Generic License Title image by  frankieleon.