Crownpeak gets a stronger European partner and customer presence and better access to AI-powered personalization, search capabilities and ecommerce integrations with its acquisition of fellow digital experience platform (DXP) provider e-Spirit.
Ravi Kumaraswami, CEO of Denver-based Crownpeak, shared those thoughts with CMSWire in an interview following his company’s March 19 acquisition of Dortmund, Germany-based e-Spirit. Crownpeak has been criticized by analysts for a lack of presence in Europe, making e-Spirit, with its strong partner presence and technical chops in the region, the perfect fit he said. E-spirit was owned by German IT services group Adesso Group, which will still serve as a Crownpeak Premier Partner.
Why Another CMS Veteran Made Sense for Crownpeak
The merger also brings together veterans of the web content management software space with a combined 42 years on the books. Crownpeak, built on .NET technology, was founded in 2001; e-spirit, built on Java tech, came to life in 1999. They’ll now have 250 to 300 combined employees.
“Any technologies that we are going to buy needs to be really fast to implement, easy to use and focused on solving business problems and interconnecting it with other things,” Kumaraswami said. “And with e-Spirit, we basically got that, plus we fixed our partner and geography issues. We are North America-centric. We've got a good customer base here. We've got good partners here. e-Spirit started in Europe, and they've got a big customer base there. And they have a big partner ecosystem."
The "icing on the cake" for Crownpeak was in the e-Spirit technology: AI-powered personalization, search and integrations into ecommerce platforms. "Not only does it double our customer base and add a substantial amount of revenue and scale to our business, but, also, it brings a new ecosystem of partners to us, which is good for our customers," the CEO added.
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Woah, Wait. DXP Acquires DXP?
Why would a DXP acquire a DXP with all the overlapping technology? This acquisition is way out in left field in terms of recent acquisitions in the space, which have featured DXPs acquiring customer data platforms (CDPs) and other complementary products. But certainly not other DXPs:
- Acquia-AgilOne (December 2019)
- Bloomreach-Exponea (January 2021)
- Sitecore-Boxever (March 2021)
Those were DXP-CDP combinations. Other big vendors that offer digital customer experience software like Adobe and Salesforce strayed far from the DXP box with acquisitions of Workfront and Slack, respectively.
The last notable DXP-DXP — or WCM-WCM, however you want to call it — would be Episerver-Ektron in 2015. Since then, DXP providers have been building out their stacks to the tune of billions of dollars in acquisitions but in areas including marketing automation, content curation, consultancies, DX testing and commerce.
So why DXP meets DXP with Crownpeak and e-Spirit? And why now? Crownpeak and e-Spirit sit in the “niche players” quadrant in the Gartner Magic Quadrant for Digital Experience Platforms. Crownpeak’s a contender in Forrester’s Agile CMS Wave; e-Spirit didn’t make Forrester’s cut.
“I would have never guessed this combination,” said Tony White of Ars Logica, an advisory services firm focusing on digital customer experience. “The two angles that I can think of that make sense are (1) customer acquisition and (2) that this makes it a better DXP story for Crownpeak. Because the vendors that have the best DXP story — not that they're very good at telling it — are best-of-breed, mostly technical customers where the name of the game has always been customization. And that's not Crownpeak’s customer set. That is e-Spirit’s customer set.”
Pulling Best of CMS Worlds Together
So what’s the plan? How will the two overlapping technologies converge, if at all? We're not sure yet, and no one expects that answer any time soon when the acquisition isn't even a month old.
Al Mays, chief technology officer for Crownpeak, said the companies will spend the coming weeks working on a product roadmap and a plan that, "brings together the best of both worlds" and does not "disrupt our existing customer base."
One of the first focuses will be ensuring the software pieces around each company's CMS (e-Spirit's CMS is called FirstSpirit; Crownpeak is just Crownpeak) become available to customers regardless of which core CMS they use, according to Mays. "And then over time, we'll be working on pulling the best of both worlds of those CMS together," Mays said.
Related Article: 14 Rules for Selecting the Right Content Management System (CMS)
Decoupled Architecture Boosts Integration Process
The type of infrastructure at play matters in these acquisitions, too. Asked about the architectures, Mays said Crownpeak offers multi-tenant Software-as-a-Service (SaaS) applications across its base (Gartner praises it in its DXP Magic Quadrant) while e-Spirit has a SaaS version of its CMS and also a traditional on-premise CMS. Gartner says e-Spirit is available as a Cloud Platform-as-a-Service (PaaS) and on-premises but its cloud-strategy execution has been slower than other DXP providers in the Magic Quadrant. Most of e-Spirit's customers are on-premises or in a private cloud, according to Gartner.
“The key part of the architecture that's the big advantage here is really the decoupled nature of both of them,” Mays said. “The delivery of the actual experience, whether that be a website, mobile application, or you're pumping content into IoT or voice applications, all those delivery pieces are decoupled from both CMS platforms. Meaning they can actually be delivered from anywhere in any model that a customer would prefer, without it being dictated by their CMS. And that was a really important architecture thing — to have the same type of architecture — and gives us a great advantage for the future.”
Having that decoupled architecture makes fitting components into a Crownpeak or an e-Spirit user’s technology stack doable without customers having to replace their current CMS, according to Kumaraswami. It will allow users, for instance, to leverage technologies Crownpeak acquired in 2016 and 2017 — ActiveStandards Digital Quality Management (DQM) and Evidon, which provides digital governance, risk and compliance.
Kumaraswami noted Crownpeak's agile method of features-building and platform upgrades will support integrations with e-Spirit without customers having to do a "major upgrade."
“If a customer wants to immediately improve digital quality and accessibility or digital governance,” he added, “you could take ours and actually put it in without (e-Spirit users) having to do any upgrades.” Integrating ecommerce, he added, would not take a “massive upgrade or replatform.” “We want to make sure the customer gets their business results fast,” Kumaraswami said, “with the least amount of disruption.”
Related Article: Why Cloud & Governance Matter When Scaling Digital Experience Platforms
Are CMS Combination Platters Doomed?
Tony Byrne, CEO and founder of Real Story Group, which provides WCM technology assessments and strategies for buyers, is skeptical of a successful CMS “combination platter approach.” He told CMSWire there is no “combination play” in this market.
Byrne cited what he deemed as failed examples, some going back decades:
Mediasurface: The original combination platter was Mediasurface, which had three different CMS tools, Byrne noted. That failed, he said, and they all died via Alterian and then SDL.
Divine: Roll-up tech company divine had three different CMS tools, also on purpose. All died except for Content Server, which went to Oracle via FatWire. FatWire killed its own homegrown CMS when they bought Content Server from divine, another failed combination, according to Byrne.
Episerver-Ektron: We did find Ektron still with a heartbeat as recently as last June. But there is no denying Episerver's lobbying efforts to get Ektron users to abandon ship and get on Episerver (which is now Optimizely).
OpenText: OpenText at one time sold and managed five different WCM tools:
“In the examples of killed-by-roll-up systems, I cannot recall a single time where the vendor did not say, ‘We are going to support the new system...things will work out well...synergies…’” Byrne said. “They have to say that. And they are always, always lying.”
As for Crownpeak-Episerver, Byrne guesses Crownpeak will string along the e-Spirit licensees and keep providing lucrative support while trying, and failing, to convince them to switch platforms.
A Roll-Up Strategy Was in the Works
Crownpeak has months to prove an e-Spirit combination platter can work. What we do know now is the Crownpeak-e-Spirit acquisition is definitely an outlier from a martech trend.
Perhaps, though, it's one of many of these kinds of deals to come, according to Robert Rose The Content Advisory, a strategy group for the Content Marketing Institute. Rose also served in marketing and strategy executive roles at Crownpeak between 2002 and 2009. Rose cited the January $1.2 billion Sitecore investment of perhaps a sign of more things to come.
As for Crownpeak, investments by K1 in 2016 and 2017 signaled they were going after a roll-up strategy in the digital experience space, Rose said. The announcements, in short order, were meaningful investments of $50 million and $100 million, and they acquired ActiveStandards and Evidon along with those investments.
“E-Spirit has always been known as this plucky little CMS with a mostly European presence,” Rose said. “So, here comes Crownpeak, and the e-Spirit acquisition is just another creamy layer in the Swiss Roll digital experience cake that is the K1 portfolio.”
As Crownpeak’s executives noted in an interview with CMSWire, Rose said the e-Spirit acquisition gives the company an instant European presence with a support team, and a great client roster. “And we’ll see if they can actually keep all those clients and shift them, over time, to a singular technology,” Rose added. “From a product offering standpoint, I can’t see that this does anything but fill a few holes; e.g. personalization, European presence, ecommerce, etc.”
Related Article: Curiouser and Curiouser — Drawing the Line Between DXP and CDP
Legacy WCM Feeling 'Pressure'
The demands of shifting from legacy WCM to the newer requirements of content experience is putting pressure on most of the traditional WCM providers, according to Jim Lundy, CEO and principal analyst at Aragon Research. The demands for R&D, which for some vendors means re-engineering, is significant.
“Consolidation has been happening rapidly in the ECM market. It is no surprise that it is happening here,” said Lundy. “A larger install base means more revenue to invest in the product. On top of that, consolidation is the most popular private equity playbook; i.e. extract cash from the combined entity.”
This represents a changing of the guard, according to Lundy. Newer Content Experience Platform (CXP) providers (Aragon is pushing the rise of CXPs) are winning deals in demanding markets such as retail and as requirements increase for more customized customer journeys.
“We expect to see even more consolidation,” Lundy added, “in the next 36 months.”