Adobe Goes In on the Marketing Cloud Wars: Time to Get Your Popcorn Ready
I never, ever (ever) thought I’d be quoting Terrell Owens, but…
So by now you probably already know that Adobe bought Neolane (for about $600M), so that suspense is over. This year when it comes to the action in the enterprise marketing arms race to the cloud, Vin Diesel and the Fast & Furious crew have nothing on the CRM industry. Well technically the madness started towards the end of last year with Microsoft’s purchase of MarketingPilot, followed a few days later by Exact Target buying Pardot (for about $100M), and then really picked up with Oracle buying Eloqua (for about $800M) in December. Then the fun continued a few weeks back with Salesforce.com buying Exact Target (for about $2.5B) …that happened shortly after Marketo’s very successful IPO.
Now that’s quite a bit of activity in a pretty short amount of time. But the Salesforce/ET deal really captured the industry’s attention, as I had never received so many emails from PR firms representing vendors offering up quotes about the deal and what it meant for the industry. And PR firms representing analyst firms offering quotes. I don’t know if it was because Salesforce had finally pulled the trigger on a marketing automation player, or if it was about why they bought that particular player and not another particular player (mentioned earlier), or if it was because how much they paid to buy that particular player, the noise generated by that deal was pretty amazing.
But the one company that was building a marketing cloud that had received little attention from the CRM-focused community was Adobe. But I’ve been kind of intrigued about what Adobe has been putting together for a year or so with their Marketing Cloud (Analytics, Experience Manager, Social, Media Optimizer and Target) – even giving them a mention in my January column in CRM Magazine on why marketing automation was going mainstream in the SMB space this year. Paul Greenberg and I even talked about Adobe’s potential in this space this past Sunday on our latest CRM Playaz episode (yup, before this whole thing went down…):
But what really got me watching them happened when I attended the Adobe Digital Summit this past March.
It was during those two days where I saw Adobe’s overall vision for the digital marketer and how their marketing cloud was being built around three main pillars – data management, content, and cross-channel campaign management. And with their acquisitions of Omniture in 2009, Day Software in 2010, Demdex and Auditude in 2011, and Efficient Frontier in 2012, they had built a nice digital marketing foundation for their cloud. And then seeing how Adobe had integrated their Creative Cloud with Marketing Cloud to make for a much better collaborative experience between creative and analysts really showed off the potential power of their approach.
So with the combination of online analytics (data and functionality) and content creation tied together in the clouds, the missing piece was the more traditional area of marketing automation where online leads get closed offline by sales teams in the B2B space. But with the intended purchase of Neolane (for about $600M), Adobe has continued its strategy of buying industry-leading companies to fill in the missing pieces.
I had a really good conversation yesterday with Matthew Langie, senior director, strategic marketing, at Adobe. You can hear the interview below, but when I asked him why Adobe pulled the trigger on Neolane he said that this enables them to integrate online and offline marketing data across the enterprise, while offering a very strong cross-channel platform for marketing automation and execution. Ironically, but understandably when thinking about it, he says having this offline channel capability added to their portfolio allows them to truly be the digital marketing hub for their customer base, many of which had been asking Adobe to provide them with these capabilities. And as Langie pointed out, Neolane being a leader on Forrester’s 2012 Cross-Channel Management Report and ranked highly on the Gartner Magic Quadrant for Multichannel Campaign Management are very good indicators of the quality of platform it is.
In Neolane, Adobe gets what Paul Greenberg calls “perhaps the best acquisition for the price made this year, perhaps bar none”. And it does definitely fits the Adobe acquisition strategy perfectly. But the fascinating thing to me is that a non-CRM-centric company has the potential to dictate (or at least have a major say) the direction of one of the big three pillars of the industry. With the rise of the CMO, and the impact that rise has on the overall enterprise in the age of the digital economy, is anyone better positioned than Adobe to lead?
Looking at information coming out of their last earnings call, Adobe expects to have over 1.25M paid subscribers to their Creative Cloud offering by the end of 2013 (up from 700K paid subscribers they had at the end of their Q2) – both individual and team subscriptions make up that number. I know there’s a lot of grumbling around how Adobe has moved away from selling software and forcing people to the cloud to cut down on losing revenue to software piracy. But honestly if they don’t put continually put out valuable services people won’t buy subscriptions … or software. So in order to hit these targets they will have to offer cloud solutions at a price where the market will be comfortable buying – so don’t be surprised if they offer different levels of subscriptions at some point.
Along with the CC numbers, Marketing Cloud bookings are up 25% year-over-year (couldn’t find any concrete numbers on subscribers). So it appears that both these clouds are gaining in popularity and we’re still in the early stages with these integrated clouds. And with Neolane coming on board it will be interesting to see how integrated the functionality it brings to the table will be brought into the Marketing Cloud fold. But what will be equally fascinating to see is how the CRM vendors respond to what Adobe is building.
You cannot ignore the potential Adobe now has to be that one-stop shop for digital marketers in the enterprise needing to pull all phases together – online and offline. They own the market for content creation/optimization tools to make content for all devices, they have leading high end analytics tools and data, and now they a leader in the traditional marketing campaign management space. Game on...
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