People standing in front of a sign that says "IBM Green Responsibility"
PHOTO: Johannes Freund

Adobe buys Marketo for $4.75 billion. Gartner names its digital experience platform leaders, citing IBM as a leader for the second straight year. Weeks later, IBM sells off its marketing and commerce software offerings to an investment firm. A wild eight months in marketing technology (martech) with a lot of twists and turns, for sure.

So what's the martech buyer to do? Does IBM's exit speak to a larger buyout trend? Not quite. The martech landscape has grown each year since Scott Brinker, of the Chief Marketing Technologist blog, began tracking it in 2011 (150 tools in 2011; 7,040 tools in 2019). However, it's still very challenging for marketers fulfilling their marketing tech stacks and realizing their campaign and customer acquisition and retention dreams. It’s still a demanding world full of integrations and mixed messages like the one IBM provided last month when they sold out of the martech space. Is it risky getting into the proverbial martech bed with a big vendor like IBM? What’s the ultimate message for marketers?

En Route to the Martech Ecosystem

Brinker, who also serves as vice president of platform ecosystem at martech provider HubSpot, maintains his belief from his martech 2019 supergraphic assessment that the martech industry is headed toward a platform ecosystem model. “There will be several large platforms and then a ton of specialist products and solutions that plug into those platforms,” Brinker said. “A gigantic landscape's worth, I'd dare say.”

Openness will be a key competitive axis among platforms in that model, according to Brinker. “All-in-one, where one company attempts to build or buy all the things itself,” he said, “seems untenable. But all-on-one — where a platform orchestrates many apps and data sources across the organization — seems eminently achievable.” Brinker calls this “The Second Golden Age of Martech.”

Related Article: Is IBM the Canary in the Martech Mega-Vendor Coal Mine?

The Message is Simplicity

IBM backing out of marketing software doesn’t send a huge message for the space, according to Sitecore CMO Paige O’Neill, whose company offers martech software. However, she said, it does remind us that “we as marketers have just got to get more simple to be able to put our tech stacks together because it's way too complicated.” 

The companies that will disrupt the marketing technology stacks are those that will blow past all of the complexity and legacy systems that have been around for such a long time, she added. They will help marketers, O'Neill added, tie things together and provide a “simpler way to do it.”

Related Article: Centerbridge Acquires IBM Marketing

All About Marketing Automation

Regardless of the moves big vendors make, and regardless of which vendor you partner with, those selecting marketing technology need to start with a marketing automation system that integrates well with their sales cloud, according to Masha Finkelstein, martech evangelist and marketer for Google Cloud. Finkelstein calls this a “good backbone.” Whether you choose Marketo, Pardot, HubSpot or another marketing automation system, make sure you implement it in a scalable way. Investing in a Marketo or Salesforce certified expert could go a long way as well as investing in an external consultant at least for the implementation portion of the project. 

“A lot can be achieved with a good marketing automation system on a lean budget,” said Finkelstein. “It's important to have it in place as early as possible to make sure you start tracking all of your marketing efforts as soon as you launch any campaigns, organic or paid, and start collecting data.”

Don’t Read Too Much Into IBM’s Martech Sellout

It’s entirely possible IBM’s shocking martech move may be about, well, IBM and IBM only. IBM has been restructuring and refocusing its business since last year, according to David Jorgenson, CEO of Equiteq. Buying Red Hat was its biggest acquisition to date and was driven by its strategic shift to higher margin cloud products and services. The deal was notably followed by the sale of a software portfolio to HCL Technologies. This portfolio included IBM Notes, Domino, Connections, Appscan, BigFix and notably Unica. “Unica offered an on-premises marketing automation solution and has shifted IBM away from the martech space,” Jorgensen said. “The recent sale of IBM’s marketing and commerce software solutions business to Centerbridge has reinforced that shift.”

Related Article: What Does Martech's Ecosystem Evolution Mean for Marketers?

Salesforce, Adobe Pressured IBM

IBM’s move away from martech is also being driven by rising competitive pressure in the space, which is presenting more growth opportunities for IBM from core business technologies, according to Jorgenson. “Marketing cloud players like Salesforce and Adobe are growing rapidly through large investments and rapid innovation,” Jorgenson said. “These players compete with diversified technology businesses like IBM and Oracle, as well as smaller martech businesses predominantly serving the growing SMB market.”