As you probably know by now, Salesforce has announced its intention to acquire marketing automation vendor ExactTarget for $2.5B.  Acquisitions generally bring turbulence to existing customers, and as subscribers to our Digital Marketing Technology research know, ExactTarget licensees have already been on a bit of a roller-coaster ride.  That said, this is one of those cases where I believe the acquisition is on balance a positive thing for the market as a whole.

What's to Like

First, it was good that Salesforce didn't acquire a complex, higher-end system like Eloqua (which went to Oracle instead) or Marketo.  Salesforce did that with social media intelligence platform Radian6 -- shooting too high with a complex, expensive platform -- and that episode has proven a struggle for customers on both sides.  ExactTarget's profile and price-point is more in line with Salesforce's overwhelming majority of mid-market customers.

Secondly, I don't think that this deal bodes poorly for Marketo, SilverPop, and all the other pure-play marketing automation vendors out there.  You'll likely see many premature obituaries for these vendors in the coming days. Don't believe them. Marketo et. al. will all continue to integrate with Salesforce CRM in a kind of coopetition that characterizes many marketplaces today (e.g., the SharePoint ecosystem).

Downsides for Customers

As always, some cautions are in order.  Customers should not assume that just because Salesforce offers a variety of different offerings under their "marketing cloud" brand that those offerings are well integrated.  This is going to take years to play out. In the meantime, never underestimate migration effort if you plan to switch vendors -- perhaps one reason why Salesforce itself still uses Oracle's Eloqua for its own digital marketing efforts.

Moreover, customers should not assume that ExactTarget will become dramatically better in its own right under a new, bigger owner.  Salesforce will learn that marketing professionals should, can, and will be more finicky about their toolsets than the vendor's traditional customer base of sales and support people.  Salesforce struggles with engineering quality and user experience in general, and consumer-facing applications in particular.  For many enterprises, poor usability in the short term will outweigh long-term data integration potential.

So, Salesforce has become a bigger giant, but it's still a very clumsy one.  Enterprises who want to empower their marketing teams need to consider carefully if they want such a broad embrace with one supplier.

For more details, consult our Digital Marketing Technology evaluations.  If you are an existing subscriber, feel free to schedule a briefing with one of our analysts to see whether today's news impacts your vistas.