This post is the first of three installments discussing the “Suite vs. Open Platform” debate. As the title implies, this first post reviews the most recent arguments for open platforms succeeding in the face of the more traditional, all-in-one marketing solutions. The second post will present arguments for the big marketing suites, and the third installment will discuss my own views on the topic.
In recent months — and especially since Marketo’s Marketing Nation Summit last month — there have been a number of blog posts and articles written on the marketing tech “consolidation or proliferation” debate. This dialogue has essentially drawn a line in the sand between the big marketing suite vendors (IBM, Adobe, Oracle, and Salesforce) and smaller, open-platform vendors, who’ve recently gained a notable champion in Marketo.
This debate has resulted in the best industry articles I’ve read in the past year (maybe longer) — real thought leadership supported by authoritative knowledge, sound logic, creative insight and good writing (a very uncommon combination these days). Moreover, they shed much light on events as they continue to unfold, such as Oracle’s unveiling of its unified marketing cloud last week.
In a comprehensive article originally published on February 8, one of marketing tech’s most influential commentators, Scott Brinker, raises an intriguing idea: there has historically been a consolidation of business software as most vendors are either “acquired or killed,” but the marketing technology landscape is in a new, very different situation primarily due to:
- MarTech being “the first major business market of the cloud computing era,” which benefits tech startups with nearly zero capital requirements, greater scalability, easier tech development, and far more accessible talent and customer pools.
- While the smaller start-ups benefit from the cloud computing era, large MarTech vendors will struggle with diseconomies of scale typical of enterprises, such as slower reaction to change, more management layers, coordination difficulties, and delayed initiatives due to larger legal departments. They’ll also suffer from marketing-specific issues such as engineering and marketing complexity.
As a result, he concludes that consolidation of solutions into a few big clouds or suites is unlikely, and “the number of marketing technology vendors in the world will never again drop below 1,000 in my lifetime.”
Exactly two months after Brinker’s post, Jon Miller, Marketo co-founder and VP of marketing, declared Marketo’s intention to shun the marketing automation herd that has gradually been migrating toward marketing suites via acquisitions. Citing Brinker’s February post, Miller discusses how the rapid change in marketing (specifically, coordinated experiences, personalized channels, continuous conversations, behavioral context, and data-driven decisions) “means that there will always be new companies and new innovations.”
Miller goes on to divide marketing software companies into two groups — marketing experiences and marketing platforms:
The platforms will provide open ecosystems that the other companies can build on and plug into. The “marketing experience” companies are the horns, strings, percussion, and wind instruments; the platform is the orchestra conductor making sure everything is in harmony.
Of course, a world-class “customer engagement platform” (as Miller terms it) must comprise a “core set of capabilities, and then be open to third-party solutions that build on the common foundation.” Marketo clearly intends to be the “Perfect Customer Engagement Platform,” but the breadth of this trajectory is less clear.
Published the same day as Jon Millers article, Gartner research director Martin Kihn’s AdExchanger contribution cast further doubt on the idea of consolidation and big suite monopolies, providing three compelling reasons:
- Marketing tech proliferation is moving too quickly for big suite acquisitions to keep pace, which means there will always be opportunity for start-ups.
- Big companies can’t innovate like start-ups: “Big companies have little incentive to invest in speculation….So big boys can be late to innovate and shift the risk of new ideas onto the startup ecosystem and VC complex.”
- Marketers gain more from open connectivity, data portability and flexible tools — meaning they are less inclined to be constrained by marketing suite vendor requirements, limitations or specifications as marketer-controlled data gains importance.
One day later, April 9, Brinker published another great blog post, in which he writes:
To pretend that a single software vendor will master all of that — and be able to keep up with all the innovations blossoming in a thousand directions across the industry — and somehow make that all stable and useable is, in my humble opinion, a fantasy.
His post, which praised Marketo’s new stance, ends with a couple predictions:
- Marketing software developers will embrace Marketo’s open platform.
- Competing marketing clouds, hubs and suites will lean toward open platform strategies as well; some will face political and cultural barriers to change, but the big players will overcome these hurdles and win independent software vendor (ISV) share lest they “become Blackberry while their competitors become iOS and Android.”
Brinker’s predictions are astute to say the least. Considering Oracle’s recent announcement, however, they don’t appear to be coming to fruition just yet. My next installment ("Platform Wars: Episode 2") will review a few perspectives on why this may be the case.