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IBM Company Review

 

IBM Marketing Software Review—An Independent Assessment

Company Viability Review

The IBM Marketing Cloud was born from the acquisition of Silverpop, a relatively small marketing software provider with the vast majority of customers residing in the U.S. but with regional offices in Australia, Germany and the UK.

Silverpop pursued a dual growth strategy of acquisitions and organic growth. Over the decade prior to the IBM acquisition the company made six acquisitions of its own.

  • In December 2002, Silverpop purchased email service provider Epigraphx.
  • In July 2003, Silverpop acquired Avalon Digital Marketing Systems and gained a West coast presence.
  • In March 2005, the company acquired Digital Oxygen in London which then became the European HQ.
  • In May 2007, Silverpop acquired Vtrenz which transitioned the company to both the B2B space and the cloud.
  • In October 2011, the company acquired PlacePunch to gain geo and location aware social services.
  • In March 2012, Silverpop acquired CoreMotives to further penetrate the Microsoft Dynamics CRM market.

Despite reporting profitability since 2004, Silverpop was venture financed over multiple rounds. From its start, the company attracted $7.4 million in late 1999 from Atlanta-based Gray Ventures and well-known West Coast investors Draper Fisher Jurvetson. In summer 2000, Draper Fisher and other investors kicked in another $28 million. In July 2001, the company closed a $5.1 million extension of its Series B funding, bringing this round to more than $30 million. The next big placement came in April 2008, for an additional $15M venture round led by D.E. Shaw with continued participation from Draper Fisher. And with a 2012 infusion from a German venture capital firm that counts Facebook and LinkedIn as portfolio companies, Silverpop has amassed over $70 million in venture capital funding.

However, being a small private company with over $70 million of accumulated venture capital represented significant risk to many enterprise buyers. That business viability risk was diminished with the IBM acquisition of Silverpop.

IBM is a global technology company with around 400,000 employees and over $90 billion in annual revenues. The company brand (sometimes called Big Blue) is one of the most recognized and valuable brands in the world. While long term viability is never certain, IBM's 100 plus year history and track record reduces the business viability of procuring the Silverpop marketing software.

Other factors and accomplishments which suggest the IBM marketing software's longevity will continue at least through the short-term include the following:

  • IBM continues to achieve impressive revenue and customer acquisition growth with this marketing software.
  • IBM's ownership has accelerated marketing software innovation. New marketing software capabilities are continuously introduced and the application shows a possible leadership role in high growth categories such as mobile and social marketing.
  • The Gartner Magic Quadrant has positioned the IBM Marketing Cloud in the leadership quadrant.
  • The company maintains a talented and tenured management team. Silverpop CEO Bill Nussey has been with the company almost from the beginning, has stayed with IBM following the acquisition, surrounds himself with a talented executive team and shows the ability to execute on the vision.

But the marketing automation software industry is more competitive than ever, and the IBM Marketing Cloud faces a number of business risks and competitive challenges which include the following:

  • The company‚Äôs brand, messaging and recognition are not keeping up with the leaders in the marketing software industry. Marketing software such as the Oracle Marketing Cloud and Marketo are achieving top of mind awareness among marketing software buyers, and companies such as HubSpot, Salesforce and Act-On Software appear to be gaining increased mindshare and acquiring more customers than IBM.
  • The marketing automation software industry is highly competitive and frequently incurring new competition that may very well outperform established players who become laggards. For example, Act-On Software and HubSpot have been offering marketing automation software for far less time, yet both are vying for a leadership position. Other start-ups and new marketing software ventures are sure to continue. Further, large established enterprise software companies such as Infor and SAP are readying new products to introduce into the marketing automation software market.
  • For nearly all marketing automation software publishers, including IBM, the most critical risk may come from Salesforce and the CRM software vendors at large as they continue to enter the marketing automation software industry directly. The current industry of small independent marketing software vendors, or put another way marketing software vendors that do not have their own integrated CRM software, will incur continued impact as CRM vendors such as Oracle, Microsoft and Salesforce continue to grow their marketing automation software market share. The CRM software market movement is occurring over two phases in parallel. In phase one, CRM vendors deliver their own social marketing clouds that begin to morph with marketing automation. In phase two, other CRM software vendors build or acquire marketing automation and embed the new capabilities within their flagship CRM solutions. For CRM vendors who choose to create their own marketing automation, the solutions will not initially match the functionality and automation of the existing marketing software products, but many customers will nonetheless accept a "good enough" solution that is tightly integrated with their core CRM application. Over a longer haul, the marketing automation software industry with morph with CRM, and marketing software pure plays will be forced to adapt in innovative ways. Some will pursue new target markets, some will go after vertical markets, some will become acquired by CRM software vendors and many will cease to exist.

Next: IBM Marketing Cloud Strengths & Weaknesses >>

Silverpop ReviewSilverpop Marketing ReviewSilverpop Social MarketingSilverpop CRM IntegrationSilverpop PriceSilverpop Company ViabilitySilverpop Strengths & WeaknessesSilverpop Competitors

 

 

IBM Marketing Software Review

 


IBM Marketing Software Review


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