News
The Gist
- Leadership confirmation. Dave O’Flanagan, formerly the interim CEO of Sitecore, has been officially appointed as the permanent CEO by the board of directors.
- Product development and market positioning. Sitecore is actively enhancing its product suite, notably through the transition to a composable DXP and the introduction of SaaS solutions.
- Challenges with new technologies. Sitecore's shift to a composable DXP and expanded SaaS offerings presents significant challenges, particularly with customer migration to the new platforms.
Sitecore has a new CEO — the same one who served in the capacity of interim CEO since March 4.
Sitecore, in a vote of confidence from its board of directors, gave Dave O’Flanagan the permanent seat as chief executive officer of the Copenhagen-based digital customer experience software provider.
O’Flanagan came to Sitecore via the acquisition of Customer Data Platform company Boxever in 2021; he had served as CEO of that company before transitioning to chief product officer for Sitecore, where he led the transition to composable and the introduction of Sitecore’s Software-as-a-Service (SaaS) DXP solutions.
"For those of us that have been in the Sitecore ecosystem for a while, the focus back to a 'product led roadmap' will be very welcome," said Kamruz Jaman, partner/solution architect and 12-time Sitecore MVP for Konabos Inc. "As Dave said in his keynote (at the SUGCON Europe conference), he was 'the product guy,' and the board obviously selected him as CEO with that vision in mind. There was definitely a renewed buzz within the Sitecore community, partner ecosystem but also with all the Sitecore employees I spoke with. It felt more like the Sitecore of old, when the original founders were at the helm. Dave spent the entire conference with the attendees, speaking with everyone and getting as much feedback as possible."
Internal Promotions, New Board Members
O’Flanagan’s appointment comes with other key internal executive promotions:
- Roger Connolly has been promoted to chief product officer (CPO) to drive all content lifecycle and AI innovation, after five years leading Sitecore’s suite of content management products
- Danny Robinson has been appointed chief technology officer (CTO) having previously led the team behind Sitecore’s AI-enhanced personalization solutions
- Rohinee Mohindroo has been appointed chief digital & information officer (CDIO) after helping recent advancements in security and data privacy across the product portfolio.
Sitecore also made four new board appointments who will work alongside Darren Roos, chair of the Sitecore board:
- Christian Shin Høegh Andersen, partner at private equity firm EQT Partners
- Maggie Buggie, who brings 20 years of experience leveraging technology to transform businesses, with a focus on AI and digital customer experience
- Michael Ouissi, who has spent more than 20 years specializing in enterprise go-to-market strategy
- Saleah Hassen Laher, who has more than 30 years’ experience in enterprise software delivery and customer success.
Related Article: The Sitecore Leadership Shift and the Impact on the Company's Trajectory
What Happens to the Rumored EQT Sale?
What does all this mean for the company’s future? Bloomberg last June reported the idea of a potential sale of Sitecore by private equity majority investor EQT, which became Sitecore’s majority investor in 2016.
Then, in March of this year, CEO Steve Tzikakis stepped down, and O’Flanagan took on the interim CEO role, fueling those chats even more.
“Look, we're just embarking on the next phase of growth,” O’Flanagan said in an interview with CMSWire this week. “I don't comment on private equity ownership and things like that. But, Sitecore is a very robust business with thousands of customers globally and a really compelling new product portfolio. … We've got over 25,000 developers now in the Sitecore ecosystem; this huge capability in terms of all of the partners that work and have built their businesses on Sitecore. And not to mention, a market that grows at 15%. And everybody in the world needs a website with a compelling digital experience, and I think Sitecore is a great choice for it.”
Sitecore's Path Forward: Aligning Leadership and Strategy
These executive moves come at a time when 23-year-old Sitecore wants to keep up with a crowded digital customer experience software market lined with players like Adobe with deep pockets and upstarts from the composability world like Contentstack.
All have similar propositions: Choose us to be the modern software platform for marketers, software developers and customer experience professionals who want to create compelling experiences through a digital maze.
Where does Sitecore fit in in 2024 and beyond?
“We’ve got some great people … in the organization, and it's great to see people step up and grow and take the opportunity,” O’Flanagan told CMSWire. “They know Sitecore. They know the market. They know our customers.”
The decision by the board to appoint a product leader was a significant and unusual step for a private equity company, according to O’Flanagan. It acknowledges, he said, that Sitecore's growth and its reputation in the market heavily depend on Sitecore’s capability to create excellent products, innovate and provide value to customers.
Related Article: From Generative AI to Accelerator: Unpacking Sitecore's Latest Product Announcements
Sitecore’s Recent Product, Company Trajectory
O’Flanagan knows as well as anybody that progression in this market takes more than some executive appointments. This comes down to the product. Sitecore builds a SaaS Digital Experience Platform (DXP) product portfolio on three clouds: content, engagement and commerce. And it's got a Platform DXP, a content suite built on customers' own services.
Sitecore has had some product momentum in the past several months:
- It was named a leader in the B2C Digital Commerce Platforms report by IDC Marketscape.
- It unveiled XM Cloud Plus and Sitecore Accelerate, to help move customers to the cloud via SaaS.
- It released new generative AI capabilities to expand Sitecore's existing AI features within its DXP portfolio, which include AI-powered recommendations for website search, intelligent decisioning and advanced A/B testing in personalization and image recognition in digital asset management.
Sitecore also announced 247 MVPs for 2024, its 18th year of naming Sitecore Most Value Professionals. And it named a new chief marketing officer, Kathie Johnson, last fall.
Related Article: Sitecore Incorporates OpenAI Generative AI Into Software Solutions
Expanding SaaS Portfolio and DXP Capabilities
O’Flanagan boasted that over the past three years, the company has experienced significant growth and has introduced its new composable DXP, establishing itself as a top vendor with a comprehensive end-to-end SaaS portfolio. The company's unique composable DXP propositions and a suite of composable products have been well-received, according to O’Flanagan. Feedback from partners and customers indicates a desire for clarity on where and how to best utilize Sitecore.
The company emphasizes its strengths in DXP and its advanced content tool product that supports the entire content lifecycle, which is beneficial for back-office marketing functions. The focus is now on enhancing content products and integrating artificial intelligence capabilities.
Additional investment will continue in supporting capabilities like CDP, personalization, search and commerce within the composable stack. A major focus is also on promoting the XM Cloud or SaaS CMS, which was launched over a year ago and has seen significant adoption.
The company aims to offer customers flexibility in choosing between cloud-based solutions or continuing with the existing XP product, which has been popular for many years. This strategy includes providing options for self-hosting, private hosting, or managed cloud services, catering to different customer preferences for technological infrastructure.
Wins for Cloud-Nativity, Losses for Cost, Support
With software comes challenges, however. Sitecore recently fell out of the leaders conversation in the Gartner Digital Experience Platforms Magic Quadrant published Feb. 21. Gartner analysts moved Sitecore out of the leaders category (consisting of Adobe, Optimizely and Acquia) and into its visionaries category alongside Bloomreach and Magnolia.
Gartner still had praise for Sitecore, including:
- Its more than 1,000 integrations to external applications, with visual, no-code integration tools to help the migration to its SaaS-based DXP product suite.
- Its fully cloud-native XM Cloud, Discover and Personalize products that pave the way for greater stability and scalability.
- Its new XM Cloud product capabilities, including an integrated form builder and a new decoupled experience studio and XM Cloud Plus, which binds together CMS, personalization, search and analytics.
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Gartner found these challenges for Sitecore:
- Customers, most of whom are on-premises, in managed cloud or self-hosting, cited reservations about adopting the new XM Cloud SaaS offering, citing higher costs and significant effort required for migrating existing implementations.
- The product lineup acquired in the past few years includes various products that may seem similar, causing some uncertainty about how they differ. Prospective customers face the challenging task of conducting a detailed analysis of costs, benefits and features across several user interfaces and products that function as a content management system (CMS). This complexity makes it hard for clients to determine the appropriate product for specific needs.
Related Article: Navigating the Evolution: From CMS to DXP in the Digital Age
O’Flanagan on Sitecore’s Gartner Demotion
As the leader of product, and now the company, O’Flanagan admitted that the Gartner DXP report each year induces a fair amount of stress: “I used to have more hair,” he joked.
Responding to the move from “leader” to “visionary,” O’Flanagan said Sitecore took a bet and led with its composable DXP, which he called “probably less proven in market” but at the same time compelling.
“And we've got a huge amount of enterprise customers who are getting a lot of value from it, but in terms of the widely deployed maturity of our XP products, we're still on that journey," he said. “We did move significantly right on the visionary side (of Gartner’s Magic Quadrant), which was great for Sitecore. It’s disappointing that we dropped (out of the leaders). It's clear that we understand how to get back up if we address some of these issues.”
Sitecore’s Efforts to Improve Support, Costs
What are those exact steps? Sitecore wants customers to feel comfortable where they are, and that means moving to the SaaS XM Cloud when they're ready, the CEO said.
How is Sitecore reinforcing that message? It’s offering dual licensing for customers who want to transition slowly. And it’s extended support terms for customers who are on older versions of XP.
“When we think about the support element, we've been doing a ton of work in terms of migration, and migration tooling to help them go from heavily customized older versions of our CMS products to the next generation of our products, which I think is going to make it a lot easier and more cost effective to do that,” O’Flanagan said.
Sitecore's deployed AI-based tooling that allows customers to translate installations into the next code base and the next configuration. It’s also released partner education and partner enablement to help them better inform how customers can go on that journey, “and we're offering them different permutations of that journey.”
Cost-wise, O’Flanagan says Sitecore has a “very compelling proposition from a cost perspective” for customers that want to go all in on SaaS.
“For customers coming off a much smaller or an older licensed version, you might be paying us perpetual or maintenance,” O’Flanagan said. “I think it's on us to explain to them what the total cost of ownership is. Because as they come off that product, they might be on the face of things, paying a small amount in terms of maintenance, but there's also hosting, there may be upgrades, there's security patching, there's the IT support around it; and so we've been doing a huge amount of work building out business cases to help customers understand what the total cost of ownership is.”
Sitecore still has some big challenges to overcome, according to Jaman. While its ability to integrate its products while maintaining distinctiveness has been notable in today's modular environment, Jaman noted a lack of transparency over pricing. "The consumption based license model does make costs a continued issue," he said. "And convincing customers that 'total cost of ownership' will be more beneficial in the long run has been a difficult sell, especially when coupled with effort required to migrate existing implementations."
The longer-term issue for the platform will be modernization of the core CMS, according to Jaman. It's currently running 20-year-old technology, "and I'm hearing rumors this is causing scaling issues for a truly shared SaaS offering in the background, which in turn means the lack of instances for trial purposes; both for customers and partners."
Refocused Roadmap, Customer Flexibility
Jaman has seen a refocus on the roadmap, with a heavy emphasis of the continued support and development of the traditional all-in-one Sitecore DXP platform.
"In my opinion, Sitecore has noted the customer caution in migrating to XM Cloud, heard the feedback that this is not an insignificant effort, and the related discussions about replatforming that they've had to recenter themselves and take a more realistic look at their current customer base and where (and when) XM Cloud would be a better product fit," Jaman said. "This is of course welcome news to the many existing Sitecore DXP customers, and allows them to plan their own roadmaps to meet their own timelines."
Robbert Hock, senior Sitecore architect and 15-time Sitecore MVP who owns Kayee, said Sitecore won't abandon clients that use its XP offering and will continue to increase its XM Cloud offering with new features like AI integration for content creation, content tagging, image generation.
"A challenge will be to be completely front-end framework agnostic, but Sitecore is already making efforts in doing so," Hock told CMSWire. "One of the successes from a technical point of view is that XM Cloud is offering a great integration with Vercel; they are releasing new features at an incredible pace next to the already existing visual interface Pages, such as the addition of Components Builder, XM Cloud Forms, Bring Your Own Components (BYOC), all integrated with XM Cloud."
The Practitioner Reality: Technical Debt, Unmatching Timelines
Kelly Rusk, enterprise architect and Sitecore subject matter expert at Glotech, Inc., told CMSWire that having O’Flanagan, who is product-focused, at the helm “is great for the users of Sitecore and will lead to better long term adoption via a stronger platform.”
The largest challenge Sitecore has in adopting a new platform, such as SaaS, is that most organizations have a lot of technical debt in their current platform, according to Rusk. They either try to reduce that debt in their current platform or have reduced that debt and are hesitant to move platforms after achieving their current operational stability.
“In essence, there is Sitecore’s timeline and organizations with their timelines,” Rusk said. “These seldom match so Sitecore may need to provide more professional services or incentives to adopt the newer platform. It’s a ‘what’s in it for me’ discussion when organizations consider a platform change.”
SaaS, with headless, offers a great opportunity but requires many shops to re-tool their DevOps and practices to leverage the newer offering, Rusk added.
“Thus,” he said, “the cost of moving to SaaS includes some significant implicit costs beyond Sitecore licensing, and that is where more professional services and/or incentives may need to be invested upfront by Sitecore.”
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