Adobe, IBM and the big business of marketing software

My friends, marketing software has officially become Big Business.

Last Friday, IBM announced its acquisition of enterprise marketing software company Unica for $480 million. Combined with their August 2 acquisition of web analytics leader Coremetrics (for an undisclosed metric ton) and their May 24 announcement to acquire Sterling Commerce (for $1.4 billion) — along with its own WebSphere web application software — IBM has quite quickly assembled a premier enterprise marketing management (EMM) software portfolio.

According to Altimeter Group analyst Ray Wang (quoted in Computerworld), IBM’s move to buy Unica will help round out a portfolio of software that captures the “digital transformation” chief marketing officers and service providers face. “You start with key assets such as Coremetrics that provide insight, you leverage Unica for marketing automation, and you conduct commerce through Sterling Commerce.”

Wham, bam, slap it on a ding dong, CMO. Almost.

Of course, in its press releases, IBM is quick to point out that these acquisitions will have terrific synergy with their Business Analytics and Optimization Consulting group of 5,000 consultants (read: huge services billings). As I wrote in a post a couple of years ago, the vastness of online marketing may prove to be quite a challenge to orchestrate under a single enterprise marketing management system. But as the history of ERP shows, there’s sure a lot of money to be made in trying.

According to ReadWriteEnterprise, IBM says that the enterprise marketing management software market is worth $2.5 billion and doubling in size on an annual basis. That growth symbolizes how fast companies are moving [their] marketing operations online.

Adobe vs. IBM — what, really?!?

And who is rising to challenge Big Blue for the domination of enterprise marketing software? None other than Adobe. They’ve come a long way from Photoshop and Illustrator, tools for the graphic designer buried many layers below marketing’s executive suite. Now they want the love of the CMO.

With their $1.8 billion acquisition of Omniture late last year and their July 28 announcement to acquire web content management provider Day Software for $240 million, they’re aiming to be the marketing department’s digital command center.

Although the IBM portfolio may be better geared towards cross-channel and multi-channel marketing — i.e., a lot of traditional marketing that still lives on in the real world — Adobe’s combination has its strength in the native digital domain. Instead of talking up enterprise marketing management, Adobe is more focused on web experience management (WEM).

But it’s not hard to see that Omniture’s web analytics and optimization technologies are an either/or choice with Coremetrics. And Day Software’s CQ5 platform is a direct competitor to WebSphere integrated with Unica’s interactive marketing software.

The blog Enterprise Irregulars has a nice write-up on the Adobe and Day combination: Adobe + Day Software Coming Together: Cautious Optimism.

Who’s next?

Having read Fooled by Randomness, I’m not usually one for predictions, but these big moves lead to some natural questions:

• Will Adobe add email marketing (such as Exact Target) to its portfolio?
• Will Oracle or SAP update their portfolio of enterprise marketing software?
• Will Microsoft assemble a competitive offering, perhaps for the mid-market?
• Will HP move in, especially with such big service revenue opportunities?
• Will Salesforce.com get more aggressive about moving into marketing?

And IBM CEO Sam Palmisano said this year he is planning to spend about $20 billion on acqusitions in the next five years. So who’s next for them?