Lead-to-revenue management automation player Marketo has certainly been in the news recently. First, in May, it held its annual Marketing Nation Summit in Las Vegas and announced plans to provide a marketing automation system, powered by a new architecture, which will enable marketers to engineer a great customer experience across the entire customer life cycle.
Clearly, this was a financially ambitious plan, reviving age-old speculation about a potential acquisition of the vendor. Candidate Marketo suitors included SAP, which has a glaring marketing automation hole in its portfolio as enterprises increasingly compete on customer experience, not operational excellence; Microsoft, which has a large base of CRM customers ready for the "prequel" of marketing automation; and even Google, which could boost its reach with midmarket business customers and enhance its overall cloud software and infrastructure business.
But Principal Analyst Lori Wizdo provided another point of view, saying: “Executing on that ambitious vision would take some investment. A private equity investment could provide the equity and the sight screen to enable that steep investment.”
Finally, on May 31, 2016, Marketo announced that it had entered into a definitive agreement to be acquired by Vista Equity Partners (Vista) for $1.79 billion in a stock for cash deal. In our brief for Forrester clients, we provide an analysis of what the acquisition means for Marketo, its customers, its competitors, and the overall marketing technology landscape.
We discuss why Marketo is being acquired now; why it’s being acquired by a private equity firm; how it changes the competitive landscape; and why Marketo customers should proceed but with caution. We also state that Marketo’s future remains uncertain, as we are not sure whether Vista is looking for a quick flip or whether a new epoch in marketing software has just begun. That last sentence is an uncomfortable one for a Forrester analyst – we prefer to “make the call” in our reports, not write either-or.
But clearly, we prefer that the glass is half-full. So let’s assume that Marketo is going private so that it can concentrate on its platform's future and its acquisition by a tech-focused private equity firm will give them the flexibility to reinvent its platform for enterprises. Forrester is predicting a transformation of B2B marketing from a top-notch supplier of leads for the load-bearing sales channel to the architect of customer engagement across the entire customer life cycle. That requires a marketing automation infrastructure that we don't have yet: Marketo might just be about to provide us with that platform.
Always keeping you informed! Peter