Sitecore has appointed longtime technology executive Mark Frost as its new CEO.
Frost replaces Michael Seifert, who founded the company in 2001 in Copenhagen, Denmark as a web content management provider primarily serving the Danish market.
Frost joins Sitecore after serving as CEO of MarkMonitor, an enterprise brand protection provider sold to Thomson Reuters for $3.55 billion last year. Seifert will join the Sitecore Board of Directors.
One in a Series of Leadership Changes
Industry observers said the change doesn't come as a great shock considering last year's private takeover and subsequent leadership changes.
Frost's appointment as CEO marks the sixth executive leadership change since EQT acquired Sitecore. The changes include:
- Dan Griggs took over as CFO last November, five months after the EQT acquisition. He began at Sitecore in 2014 as VP of financial planning and analysis
- Claus Hagen Nielsen joined Sitecore as CIO in February
- Denise Parker joined Sitecore as executive vice president of operations in March
- Mark Zablan, a former Adobe executive, joined Sitecore as chief revenue officer in January
- Jonas Persson joined Sitecore as chairman of the board soon after the EQT acquisition.
Still remaining in their Sitecore leadership roles through the EQT takeover are:
- CMO Scott Anderson, who has held that role since 2015
- Rich Foehr, head of human resources and chief legal officer, with Sitecore since 2014
- Lars Fløe Nielsen has been chief development officer since 2015
"Bringing in a new CEO is part of the private equity playbook and actually I’m a bit surprised they waited this long," Tony Byrne, CEO and founder of Olney, Md.-based vendor analyst Real Story Group, told CMSWire. "I don’t think Seifert failed. It’s just that the new owners of the team want a new GM and possibly some new coaches too, so this is perfectly normal."
A Need for Speed
The string of leadership changes over the past year could also be the result of a company that has "outgrown itself," according to Andy van de Sande, CMS strategist and three-year Sitecore MVP.
"Seifert has done a great job the last decade, creating a great outstanding product," van de Sande told CMSWire. "It seems as if the company now also outgrows itself, demanding specific chiefs in the strategic and operational areas."
It's necessary for Sitecore to develop faster "given the speed and the level of detail (at which) the digital world is growing."
Then there's the digital experience elephant in the room that Sitecore must address no matter who's on the leadership team — Adobe, Sitecore's main competitor. The Adobe Marketing Cloud accounted for $1.63 billion in revenue alone in 2016.
"I would say that Sitecore is mainly challenged by and challenging Adobe," van de Sande added. "But there are many many specialized tools that can do what Sitecore does, but on a single specialized field. Sitecore will want to keep us as an integrated platform and they will have to keep delivering."
The move may also have to do with Sitecore's desire to make big bets on cloud technologies. In its Web Content Management Wave released in January, Forrester gave top ratings to Adobe, Acquia and Episerver and emphasized the cloud and headless deployments, as well as integrations with best-of-breed products.
The heavy weighting on headless, modularization, APIs and micro-services strategy pushed Acquia and Episerver into the leaderboard for the first time, where they joined perennial leader Adobe, the top ranked platform.
However, Forrester's view of the market hurt Sitecore, which slipped from its 2016 leader position to a strong performer. Sitecore was also rated a strong performer in 2013 and 2011. Forrester gave Sitecore low marks for its cloud offerings in the January report.
"My deeper hunch is that EQT is doubling down on cloud and wants someone who will get them there faster with more of a SaaS model, rather than PaaS," Byrne said. "We think this will be tough for Sitecore and potentially problematic for their channel — which has been a significant part of Sitecore’s success to date. Seifert did a great job of supporting implementation partners at a time when some competitors (Ektron) would sometimes cannibalize those channels. Cloud and specifically multitenant SaaS brings a whole new business model."
A Sitecore official in February told CMSWire Forrester did not consider Sitecore’s most recently available capabilities in its evaluation. Sitecore has made cloud innovations such as Microsoft Azure Web Apps compatibility.
Last year, Sitecore announced its intentions to develop Platform-as-a-Service (PaaS) optimizations native and specific to Microsoft Azure, as well as adopt the Azure Resource Manager and Azure Marketplace as primary resource management and provisioning vehicles. Sitecore also is investing in AI and microservices, officials told CMSWire.
'Ready for Change'
However, Sitecore may have waited too long accelerating its cloud game, according to Scott Liewehr, CEO of New York City-based Digital Clarity Group. Cloud, he said, was not a Sitecore priority for "far too long in the product roadmap, yet (new CEO) Mark seems to have deep roots there."
"Seifert did an amazing job building the company to date," Liewehr added, "and a product that has led the industry from a vision standpoint. I think, however, that the company has been ready for this change. They’ve been limited a bit in their view of what’s important, focusing more on what got them here versus what will get the company to the next level."
Frost's appointment will satisfy analysts and help Sitecore catch up with some of its competitors on the cloud front.
"To go along with the technology shift, the business model shift needs to be fully embraced as well," Liewehr said. "Mark’s new eyes and his background in SaaS should make him well-prepared for some of the rather significant changes Sitecore needs to make."
Liewehr cited significant changes the company should make:
- A renewed focus on Sitecore’s core customer and target market. "In the quest for market share and category dominance, the company lost its way on this a bit. We’ve heard good things on this front moving forward."
- Focus on CLTV and customer churn as primary KPIs of the business
- Shift the partner program to place a heavier emphasis on customer retention and service versus customer acquisition, which means deeper relationships with partners that are well-suited to serve Sitecore’s clientele
- A pricing model which better reflects a cloud-first approach, product-mix and the long-term nature of the customer relationships they’re trying to cultivate.
'Driving the Next Phase of Growth'
Frost's hiring will help Sitecore "drive the next phase of growth," Board Chairman Jonas Persson said in a statement.
"Frost’s proven track record in scaling large software organizations and his vast experience in the Software-as-a-Service (SaaS) market are perfectly suited to help drive Sitecore through its next high-growth phase," Persson added. "Additionally, with Mark Frost taking over the CEO agenda, Michael will be able to focus on what he loves to do most — helping drive strategy that leads to revolutionary software.”
Seifert cited Frost's strategy, leadership and experience in scaling software businesses as qualities that make him "the ideal fit for Sitecore."
Before his time as CEO of MarkMonitor, Frost served as general manager for the SaaS Business Unit of CA Technologies. He also served as EVP and general manager for the SaaS Business Unit of MarketTools.
Frost has held 12 positions according to his LinkedIn profile, starting in 1981 as a software engineer for General Electric. He held engineering roles through 1998 when he took a post as vice president of products and technology at NeoVista Software.
Frost's longest post was a six-year stint as director of engineering and general manager at EDS Corporation in Palo Alto.
“Sitecore is at an exciting stage, and I see tremendous opportunity ahead with our leading technology offerings in the highly attractive web content management, commerce and digital marketing spaces,” Frost said. “The company has had explosive growth, and Michael and the team should be incredibly proud of what they have built. I look forward to working with the leadership team to continue that momentum and build on the foundation of world-class technology, fanatical customers and strong partners to propel us to the next level.”