Two acquisitions over the last three months signal the meshing of the customer experience/marketing software worlds with those that offer collaboration, project management and workflow operations.
Adobe acquired Workfront in November. Salesforce acquired Slack in December. The acquirers sit at the top of the digital customer experience software worlds battling for attention — and dollars — from chief marketing officers, marketing departments and those charged with crafting digital customer experience programs.
And now they've added workplace project management and collaboration. Enough to really signify an actual trend of the merging of front-end customer experience with back-end digital workplace/work operations where vendors offer all experiences under one roof?
“My take is that, yes, these acquisitions are two data points that suggest a trend, but I think there's actually sort of different motivations behind them,” said Nicole France, principal analyst and VP of Constellation Research. “So we may end up getting to a similar point, even though that wasn't necessarily what was behind each of those different deals.”
Not Breaking New Ground
Adobe and Salesforce aren’t breaking new ground. Customer-facing apps have met employee-facing apps under one vendor roof before. SAP rolled out major customer experience initiatives in 2018 with its announcement of SAP C/4HANA and SAP HANA Data Management Suite. Oracle is now accepted as a CX contender in addition to its back-end, ERP suite.
Some have offered mixed messages in this arena. HP sold off its CX suite to OpenText in 2016. IBM sold some marketing suites to HCL in late 2018 then had other marketing assets acquired by a private equity firm four months later.
Tale of Two Acquisitions
But this is Adobe and Salesforce, two fierce competitors on top of the marketing and CX software space, acquiring two workplace components within a few months.
Still, France said she isn’t quite buying a major trend — yet — when analyzing the Adobe-Workfront and Salesforce-Slack acquisitions alone. Adobe’s acquisition of Workfront pulls marketing efforts into a more extensive workflow within the organization, joining customer experience forces with even the IT organization. “Who would have thunk it?” France asked.
Adobe needed to beef up the ability to support operations and effective collaboration within marketing, she added. "Because if you look at big companies with big marketing organizations, that's already pretty difficult to do,” she said. Adobe also needed better coordination with other customer-facing departments or divisions within the organization.
Salesforce, meanwhile, didn’t fill any major gaps because it already had collaboration capabilities with Quip and Chatter apps. Slack gives Salesforce a “really big step into non-customer-facing, decision-making business units within the enterprise,” France said. “And that is a very big place that Salesforce absolutely wants to grow and honestly needs to grow if it's going to hit these lofty revenue targets that it set for itself.”
Striking Chords With ‘Work of Marketing’
Despite all the automation tools, we haven't effectively talked about the work of marketing beyond a surface-level application of marketing resource management (MRM), according to France’s colleague, Liz Miller, vice president and principal analyst at Constellation Research.
“And there hasn't really been a big shake-up in the MRM space in quite some time,” Miller said. "You have your Aprimos out there, but let’s be real: Aprimo now thinks it’s a DAM.” Very few tools out there have managed to last the test of time from a marketing operations perspective. Further, there is a lot of confusion, Miller added, around what resource management should be.
Workfront, which already has really deep integrations on the Creative Cloud side of the business, can now extend to the Experience Cloud side giving Adobe the potential to “have the connective tissue in that long-standing Adobe dream of the right side and the left side of the brain together.”
“But,” Miller added, “as much as we love to talk about that as being kind of the new brain pattern of the modern marketer, we haven't necessarily had the workflows that make that real. We've had points of collaboration that make it possible, but not really making it real. So I think that the Adobe-Workfront stuff becomes really interesting, as a resurgence of the practice of marketing operations.”
Is This an Evolution for Systems of Record Companies?
These acquisitions may just be a simple natural next step for systems of records companies acquiring systems of engagement companies and products, according to Nitesh Dudhia, co-founder and CBO at Aikon Labs.
The goal? Embedded collaboration experience. “In a modern digital workplace, users demand a seamless experience, switching screens and keeping track of what was shared when,” Dudhia said. “No one wants to go into a system of record after a whole conversation and decision has happened over a chat session in a group channel to update records. We now expect the systems to be intelligent enough to capture those conversations, decisions and notes to fill in the forms in CRMs, marketing systems or ERPs.”
HR’s Entry Into Digital Transformation
Industry moves like these speak to a digital ascension for employee experience and HR, according to James Norwood, chief marketing and strategy officer at isolved. Work collaboration systems began life in the Agile development world, Norwood added, helping product teams to collaborate around projects using “boards.”
“However,” he added, “as the modern workforce has become increasingly distributed, other teams, like digital marketing groups, saw the same value of such tools, and that brought them into the sphere of CRM/CX. At the same time, human capital management (HCM) vendors saw its value for a virtual and increasingly remote workforce, to maintain or foster employee engagement.”
How much can a company really own, transform or optimize the digital experience if the employee’s day-in, day-out experience is broken? “HR has been one of the last bastions to benefit from digital transformation initiatives, but the pandemic has rightfully changed that,” Norwood said. “Organizations now realize that the employee experience (EX) is as important as CX and that by aligning the two you can outperform the competition.”
Workplace and marketing apps alike still live in silos, and that’s what acquisitions like “DXP plus work collaboration” are helping to solve, according to Norwood. “They’re breaking down departmental silos so that the employee experience can positively influence the customer’s experience,” he added.
Taming Digital Chaos
Organizations needed strong internal digital experiences and collaboration prior to the COVID-19 pandemic, but they could skate by with less than seamless internal experiences because they could still force the function in-person, according to Scott Webb, CEO of Avionos.
“Now in a distributed, remote environment, we’ve seen the chaos that results from the organizations that failed to create strong internal digital experiences,” Webb said. “This is one of the driving forces behind Salesforce and Adobe’s recent acquisitions. In both cases, their customers were feeling the burden on their internal abilities to maintain fluid customer experiences during the challenges of the new work environment, and they were increasingly relying on tools like Slack and Workfront to complete their day-to-day work. Delivering great digital customer experiences hinges on organizations also having cohesive internal experiences across cross-team collaboration, communication, operations and data-sharing.”
App Fatigue Means More Acquisitions
Mergers and acquisitions like these will continue because of a few driving factors related to eyeball time, platform engagement, fatigue switching between app and employee demands for a simple and seamless user experience, according to Mike Hicks, CMO of Beezy.
“The age of cloud computing is all about consumption,” Hicks added. “The major players in this space who were once content for their backend system to be accessed once or twice per day to perform a simple task are looking for ways to increase consumption and stay relevant in this new world. They add new functionality that tries to bridge the gap between the tasks performed in their app and collaborative and knowledge sharing workflows tied to other apps. Their intent is to keep people in their app for longer periods of time while ensuring time is spent productively."
Intuitive consolidation that makes work easier and more connected is a welcome change, Hicks added, but, in reality, it’s still a very fragmented environment and a lot of the acquisition activity just becomes noise without a tangible benefit.
“I think that’s why we’re seeing leading organizations continue to leverage their digital workplace as the destination,” Hicks said, “that can consolidate this disjointed app ecosystem and provide a single source of truth, simplify collaboration, and support workflows for the most common tasks."
Morten Brøgger, CEO of Wire, said we’ll see similar acquisitions/mergers like Adobe-Workfront and Salesforce-Slack happen in the future. "I think acquisitions like Salesforce/Slack are evidence that we’ll see software companies competing to be the top all-in-one workplace tool suite," Brøgger added. "The tools in these suites will cut across multiple workplace functions — marketing, digital experience, collaboration, etc."