Alterian is once again an independent entity.
SDL acquired the marketing automation and campaign management software vendor in 2012, but released it under a management buyout in early November.
As a former executive at both SDL and Alterian, people have been asking me what I think of the move (A caveat: these conversations were with people who formerly knew the business or concerned observers, rather than anyone currently linked with the company).
These conversations surfaced a common concern: how will this new/old entity fare floating back into waters infested by a new breed of marketing cloud shark?
A Time for Alterian's Reinvention
The SDL acquisition happened four years ago. The market has changed in the interim. And for anyone who previously watched Alterian, you know it was troubled when SDL scooped it up: The company had products in need of investment and a broken sales channel.
So the solution can’t be about turning back the clock to that happy time. This requires a forward-looking reinvention, focused on finding relevancy in the marketplace.
The key will be what happened to Alterian in the intervening years under SDL’s stewardship.
In my view, SDL made some good choices: It retained much of the Alterian product leadership, combined it with its own strong product management process and SDL's former CEO Mark Lancaster took a personal interest in the details of the software delivery as a former software engineering guy.
However, with SDL’s recent travails, you might conclude that there was little money in the pot for product investment — but its current product announcements suggest otherwise, with the introduction of capabilities like its real-time interaction engine.
It would therefore seem that the software products that form the new Alterian have not been left to wither on the vine, unlike a lot of rollup software acquisitions we may have observed.
An Unsuccessful Pivot
The challenge for SDL was not product, but pivoting itself into selling the customer experience proposition and defining itself in Adobe’s taillights — a strategy which its executive chairman admitted was wrong.
In pivoting itself as a marketing cloud, SDL needed not just the ability to tell that story, but an audience to listen to it.
For a company whose client base and culture are language- and content-centric, the story was a conflict. The story lacked conviction and failed to resonate with the market or the channel.
As a software vendor with a broad portfolio, you telling a customer experience or marketing cloud story — even if you get it right — isn't enough. You also need an ecosystem of digital agencies, systems integrators and partners to bring the credibility, the integration story and the clients. SDL didn’t manage that.
So Alterian spins out of a company with a sales problem, not so much a product problem, into a changed market.
Alterian's Chances in the Marketing Ecosystem
What about those sharks in the marketing waters?
In my opinion, the market shows every sign of maturity. Buying behavior is coalescing around branded suites of products, a.k.a. the marketing clouds. The old saying that no one got fired for buying IBM has since been applied to SAP and more recently, Adobe. It’s an indication of this maturity. When a market gets established, a vendor gets dominant.
When up against this thinking, smaller vendors, even with much better products, fail.
However, judging by the behavior of our clients, some big brands are not choosing the one-size-fits-all path that the marketing clouds demand. These brands are building marketing architectures based on integrating components, in part as a result of baulking at the price of the big guys, but also in recognition that no one solution has quite managed to solve their problems.
The vibrant ecosystem of vendors large and small will find companies receptive to hearing the ideas of a new name in the market — providing you reach them through the noise.
Alterian has some factors in its favor. Loyal partners remained in its channel, which is promising.
So has Alterian been cast adrift or is it ready to set sail? Unfortunately, the answer is as always, it depends. We need a deeper analysis into what the years under SDL have done to its product and the competition it is up against.
But a prevailing wind is blowing if Alterian can maneuver through the marketing clouds.