January 21st, 2013
Why consolidation isn't a cure for the big picture challenges organizations face with sales and marketing technology.
As evidenced by Gartner’s recent projection that CMOs will overtake CIOs in terms of IT spending by 2017, marketing technology has become big business, attracting the attention of larger enterprise software providers. Analysts expect the consolidation to continue as companies like IBM, Teradata and others rush to acquire some form of marketing automation to augment their existing solutions. With the entry of big business into this niche space, it may be time to assess if these providers routinely develop solutions oriented at all levels of business operations or if their position might influence the shortsightedness with which they consider the needs of small and mid-sized companies.
Consolidation is typical in the software business once an application genre has reached a level of market saturation and feature differentiation is diminished. Marketing automation software has arrived at this destination. Consolidation, which will undoubtedly make lots of money for Fortune 500 software companies, is unlikely to benefit most customers.
Oracle has spun the value of its acquisition to Eloqua’s customer base with a promise of enhancements through the integration of Big Data and business intelligence tools. That’s probably pretty exciting for some of Eloqua’s biggest customers, particularly those who are already using or are interested in buying some of Oracle’s other software solutions. These enterprise organizations are already poised to manage the complexity of large volumes of disparate data that will accompany this level of integration.
For most mid-sized organizations, flooding their marketing automation with more data will create an unwieldy beast. These companies will also be reluctant to invest in more marketing technology when so far, marketing automation has failed to deliver on its promise of a consistent volume of high quality leads and a pipeline of rich opportunities.
Why is that? Mid-sized organizations are discovering that marketing automation is just a piece of the puzzle. To achieve ROI on the technology, organizations must invest 10X its cost to effectively run it. Marketing automation requires resources to support database development, content creation, integrated campaign execution to support demand generation, sales enablement tools to support the opportunity stage and reporting to support effective decision-making.
Larger organizations have the staff, budget and content assets in place to use marketing automation to its full potential. Small and mid-sized companies simply can’t do everything that is required to make use of marketing automation in its current state. They don’t need more add-ons for business intelligence and Big Data. These organizations need talent and resources to run an effective digital marketing program and to make proper use of the technology they already own.
Mid-sized companies can’t afford to get caught up in the drama and excitement of what consolidation might mean for marketing automation technology. Eloqua customers in this space need to steel themselves against the sales pitch to come. They’ll need to save every penny just to squeeze ROI out of the investment they’ve already made. The smart ones may already be looking for a provider that has figured out how to deliver technology and digital marketing services at a price point that fits the budget.