Subscribe by Email

Your email:

Posts by Month

Browse by Tag

Driving Sales and Marketing Alignment

Current Articles | RSS Feed RSS Feed

IBM to Acquire Unica

Posted by Jonathan Block on Fri, Aug 13, 2010 @ 08:13 AM
  
  
  
  
  
Add to delicious  delicious  
  

IBM has announced that it has entered an agreement to purchase Unica in a cash transaction worth approximately $480 million. As followers of SiriusDecisions are aware, we've been predicting the consolidation of the marketing automation platform (MAP) space for some time. While other acquisitions have occurred, albeit it on a smaller scale (even taking into account Oracle's purchase of Market2Lead's IP), this could be the tipping point we've been predicting. It's easy to overstate the potential for consolidation, given the relatively small size of the MAP market, but other vendors have certainly been shopping themselves and have most likely been pricing themselves out of consideration.

So what of this acquisition? IBM has been using Unica internally, and standardized on it as their MAP worldwide in 2009. While the timeline to complete such an enterprise implementation is long, IBM clearly saw the value of Unica's capabilities and the opportunity to enter the marketing automation game. In addition to its marketing automation solution, Unica is one of the leaders of what we call Marketing Operations Management (others call it MRM), which handles planning, budgeting, scheduling, asset management, and a host of other operations capabilities. Unica also has a Web analytics product, but IBM already has solutions in this area. According to IBM, it's the operations and MAP functionality they were after to bolster its own ability to offer an automated, cross-channel marketing solution along with key marketing process and operations capabilities.

This acquisition is positive and gives MAP customers a strong choice; it remains to be seen whether this is an enterprise choice only or if it will be palatable to smaller customers as well. The implementation portion of adopting a MAP (whether on-demand or not) is something few marketing organizations have the stomach for. Given that the MAP market consists of relatively small vendors, who have had to rely increasingly on their emerging partner networks as the pace of clients they need to install has outpaced their internal resources capabilities, the combination of Unica/IBM technology along with IBM's vast services groups could help accelerate MAP adoption, certainly for larger organizations. So will this acquisition start a domino effect? Most likely, but the row of dominoes is fairly short. The real question is will those seeking to acquire a similar vendor buy one that offers the full complement of operations, analytics and MAP capabilities (such as Aprimo or Neolane) or one that focuses on the MAP side (such as Eloqua, Marketo, Silverpop or Manticore Technology)?

Tags: , , , ,

Comments

I don't think IBM is after the application or the related services. Those are gravy revenue sources. The real tipping point is that even the elephants like IBM now recognize the gap between user concentration on the web and media spend (still weighted too much to traditional) and that the web is not a mere channel but the go-forward operating platform. For IBM the web is the core IT platform. They also recognize that data - audience segmentation, performance analysis, customer data integration, etc. - is the real gold in the web, and that the only way to control the data is to own the transaction sources like MAP. Look hard at Adobe's strategy with Omniture. SAP and Oracle will be the next buyers, especially since the marketing suites for both of these large companies lags the market significantly.
Posted @ Friday, August 13, 2010 9:19 AM by John Shomaker
John, Thanks for your comment. I agree that IBM bought something they don't have. My services comment was more to the potential benefit to MAP customers in general. While Oracle already bought Market2Lead's functionality to bolster Siebel Marketing they could still purchase more. I agree with your other potential acquirers.
Posted @ Friday, August 13, 2010 9:29 AM by Jonathan Block
As a former IBMer, Unica expert and marketer, I think your take is missing a number of points and does not remotely consider the acquisition's depth and breadth. 
 
1. Your conjecture is made on translating the internal capability outward. While IBM has done that in cases, the business model for sending marketers into the field to do campaign building, user adoption and knowledge transfer is not proven. And not likely. 
2. You need to examine where in the software portfolio this ends up. While you are considering it on the BAO side of the house, it is equally likely to go to the commerce stack or the ilog stack... 
3. Unica's largest implementer of EMM globally? Accenture. Enough said. 
4. This changes the ability to get into Managed Business Process Services - for both small and mid tier clients through the cloud. Given the initial Red Pill acquisition, which was a MBPS acquisition, this functionality could expand outsourcing capabilities. 
4. Unica has not managed to offer deep functionality in a cloud based service yet. IBM can make that a reality. 
5. IBM has a creative agency team with global reach and deployment to supplement complete program efforts 
6. IBM also has a full complement of social software, with more in the pipeline.  
 
Thus, I think the ripple effect on this is bigger than who's next... 
 
 
Posted @ Friday, August 13, 2010 9:48 AM by Cristene Gonzalez-Wertz
Cristene, thanks for your comments. I'm not suggesting that IBM is getting into the demand creation agency business. The kernel of the acquisition is that IBM saw a hole in a addressable buying center (which applies to any acquisition, I know). From the perspective our our B2B customers this deal can be beneficial in a number of ways, which my post addresses rather than cover every potential aspect. Both IBM and Unica are clients of ours so we do have some insight into what this all means.
Posted @ Friday, August 13, 2010 10:04 AM by Jonathan Block
Jonathan, 
 
Certainly interesting times, and certainly one of the first of many to come consolidations. Do you have any deeper thought to why Unica for IBM or Omniture for Adobe? Is there a shared strategic vision here? Looking for the core driver that may lend insight to the next acquisition. 
 
Surprised no one has mentioned Mincrosoft. They've been quiet, relatively, since the Aquantive acquisition, but certainly they will be part of the landscape. I know Alterian is on a microsoft stack, who else?
Posted @ Tuesday, August 17, 2010 2:10 PM by Tewks
John, I'm interested to know as a current client of Eloqua if you think acquisition is in the near future for them. More importantly we use their implementation and managed partners extensively...what affect would such a merger have on the parters who service the MAP clients on going (or ability for them to source new implementations). Would it open up the market to even more demand for them...or would it lessen as the acquiring company may take services in house?
Posted @ Wednesday, August 25, 2010 9:43 AM by Brenda
Comments have been closed for this article.