Is Marketing Automation Next On’s Acquisition Agenda?

Published: August 7, 2012

Benioff has also cited a Gartner prediction that by 2017, CMOs will spend more on technology than CIOs – a reflection of the changes reshaping formerly low-tech marketing organizations and turning them into major IT players.

Protecting The AppExchange Ecosystem representatives declined to comment on the company’s plans to incorporate the marketing cloud concept into its product strategy. Among industry observers, however, the consensus is that a marketing automation purchase is unlikely – although it is possible.

One concern for would be the prominent role that marketing automation vendors already play in its AppExchange cloud marketplace, and the risks inherent in disrupting a lucrative partner ecosystem.

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“The company’s attitude seems to be that marketing automation is something they have a lot of partners in the AppExchange supporting quite well,” said David Raab, Vice President, Optimization at Left Brain DGA. “Some of their biggest partners are marketing automation vendors, so they would have to think long and hard about whether they want to disrupt that. There’s a lot of risk and not a lot of reward.”

According to Steve Gershik, CEO at 28Marketing, won’t necessarily avoid an acquisition simply to maintain good relations with its AppExchange partners. At the same time, he said, the company recognizes the economic benefits of maintaining the status quo.

“The marketing automation ecosystem — all the major players — integrates with first and foremost,” Gershik stated. “You could argue that accrues the benefits of marketing automation without the costs – you keep the partners close, and let them handle the integration process.”

Does The Opportunity Justify The Risk?

According to Ian Michiels, VP of Advisory Services at MarketSphere Marketing, marketing automation technology also creates implementation challenges that might prefer to let its partners handle.

“With something like social media monitoring, you’re not going to get more out of it than what Radian6 offers. It’s a good acquisition, the technology won’t change, and there’s a low education curve,” Michiels explained. “With marketing automation, though, you have to change your organization and align your sales and marketing to make it work. It can give you a huge ROI, but it’s also a huge pain to implement.”

“In some ways, marketing automation is as disruptive as CRM,” added Adam Blitzer, COO and Co-Founder of Pardot. “It involves massive changes both to marketing and sales.”

In addition, Gershik pointed out, marketing automation – in spite of the industry’s rapid growth – is still a relatively small business opportunity for a company like “Is the market big enough yet for The total market for marketing automation is still a few hundred million dollars,” he said. “If they enter the market, they’ll be the 900-pound gorilla, but is that market size enough for them? They still haven’t answered that question affirmatively.”

Three Scenarios For

Given these concerns, what should B2B marketers make of’s embrace of the “marketing cloud” concept? According to industry experts, several scenarios are possible.

One possibility is that will buy a marketing automation vendor in spite of the potential downside. “It’s arguably the last piece of the ‘marketing cloud’ plan they haven’t yet added in,” acknowledged Gershik. “If does get into marketing automation, then HubSpot might be a good candidate,” he said, in part due to’s existing $32 million investment in HubSpot. (A HubSpot representative declined to comment on the possibility of a purchase.)

While Raab discounts the odds of acquiring HubSpot (or any other independent marketing automation vendor), he said a more incremental, in-house approach to adding marketing automation features could yield practical benefits. “They might slowly increase the [marketing automation] capabilities of their core product – it’s something they could easily do,” he said. “I wouldn’t be surprised to see that sort of two-pronged approach, where they still work with partners, but also introduce a certain level of included functionality.”

Blitzer pointed out a third option for Buying an email marketing vendor, rather than venturing into full-scale marketing automation. “They’ve been interested in [email marketing technology] in the past,” he noted. “And the interesting thing is that email requires less consulting and fewer client services than marketing automation – it’s inherently less complex and easier to cross-sell.”

A Tale Of Two Marketing Clouds

Finally, questions remain about’s use of the term “marketing cloud.” Marketo has already trademarked the term and uses it to promote its own consortium of vendors – one of which happens to be, which is owned by

According to Marketo CMO Sanjay Dholakia , the company isn’t troubled by’s use of the term. “’s investment in the ‘marketing cloud’ is a great coup for Marketo and the other members of the Marketing Cloud alliance,” Dholakia said. “We will continue our education and networking efforts with the monthly webinars and events, and the alliance will continue to be associated with the Marketing Cloud name.”

Gershik commented that Marketo’s diplomatic approach to’s appropriation of the term is the best option for everyone involved.

“I wouldn’t want to go up against SFDC on this,” he stated. “It may be true that Marketo has a claim on the term, but doesn’t seem to care. All the vendors in the Marketo [alliance] are partners anyway; they wouldn’t want to jeopardize that relationship.”

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