Your martech stack is probably 2X as big as you think it is

Size of Tech Stacks (Estimated vs. Actual)

The editorial staff here at chiefmartec.com (looking in the mirror) are rather obsessed with martech stacks. What’s in them? How much is controlled by IT or marketing operations? How do marketers think of them? How many apps in them support self-service users?

How big are they?

Blissfully recently published their SaaS Trends: IT & Compliance Edition 2019 report, and it was chock full of interesting insights into the current state of tech stacks. Not just marketing, but SaaS apps across the entire organization. Their research combined direct observation of app usage — via their SaaS management product that I like to think of as TripIt-for-SaaS — and a survey of IT personnel.

Their first finding is a phenomenon that I run across anecdotally all the time — but now we have data to confirm it. Businesses completely underestimate the number of apps in their stack stacks, often by 1/2 or more.

To quote Blissfully’s report directly (emphasis added is mine):

We asked survey respondents to guess how many apps their companies use, then compared this with actual data regarding SaaS app usage. While we expected that many businesses would underestimate this number, it was surprising to discover just how big the delta is between reality and belief. In fact, businesses use nearly two times as many apps as they think they do.

“Wait, we have how many apps?” an executive will frequently exclaim. (And then whip out their smartphone to send an urgent message about that discovery, swiping past the dozens of apps in the palm of their hand without a pause for irony.)

Hey, if martech is a $121 billion market, all that software is going somewhere. And increasingly, apps are being adopted in an “agile” fashion, thanks to freemium and free trial go-to-market martech models.

Yeah, there’s a lot of marketing technology out there.

But I’d argue, as many colloquially have, that size doesn’t matter — at least not as a primary measure of martech stack success. For that matter, even utilization of individual tools can be a misguided metric. What matters is overall effectiveness — how well your stack performs in delivering great business outcomes.

Depth of stack integration and stage of martech maturity are more relevant to that mission than app counting.

Okay, compliance with the law is also pretty important too.

Which brings us back to the Blissfully report. They also analyzed over 1,000 of the most popular apps that they found in people’s stacks for their compliance with GDPR, SOC2, ISO 27001, and EU Privacy Shield regulations.

71% of the apps they studied are now GDPR compliant. In contrast, only 13% have achieved both SOC2 and ISO 27001 compliance. “Given GDPR’s high fines and mandatory compliance, it makes sense that companies would prioritize it over SOC2,” the report notes.

There is some variance in compliance by the type of app:

Tech Stack Apps with GDPR Compliance

It’s good to see marketing apps near the top of the ranking for GDPR compliance — around 75% of them are compliant. It kind of goes with the territory, as “the more customer-facing an app is, the more likely it is to be GDPR compliant.”

SOC2 compliance, not so much:

Tech Stack Apps with SOC2 Compliance

Indeed, marketing apps are at the very bottom of this pile.

But part of this could be attributed to the relatively smaller scale of many martech vendors, especially newer start-ups.

Another finding from the research highlights the reality that companies are more likely to take on compliance efforts as they grow and scale. For example, companies with less than $1 million in funding have about 7% compliance with SOC2, while companies with $100 million or more in funding have about 45% compliance. The more funding a company has raised, and the longer it has been in existence, the more compliance regulations it is likely to be in adherence with. This is not entirely surprising, but heartening in many ways for the world of data security.

Pick up a copy of Blissfully’s report for more details — it’s a good read.

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