Yesterday Adobe announced its intention to acquire cross-channel campaign management vendor Neolane for $600m. According to Gerry Brown, senior analyst at Ovum, “An
acquisition of this type has been a long time coming for Adobe – its
lack of a campaign management platform has been a glaring hole in its
digital marketing platform proposition.”
In analysing the deal, Brown says, “This
was an expensive acquisition at over 10X Neolane’s previous year’s
revenues, but it should be worth it. The deal has the potential to
propel Adobe into the market leadership with both its existing digital
(web site centric) offer, plus Neolane’s enterprise campaign management
offer. These are the two driving forces of strategic enterprise
purchasing of digital marketing platforms today, and so puts Adobe in a
strong market position.”
Brown continues:
“Clearly a catalyst for this acquisition was Salesforce.com’s recent
$2.5Bn purchase of Exact Target. Industry talk suggests that both Exact
Target and Eloqua (which was acquired by Oracle in December 2012) were
acquisition targets for Adobe, and Adobe was likely compelled to act
before all the their campaign management best-of-breed vendor
acquisition options evaporated.”
So what have they bought?
“Neolane is a French company with a strong and dominant footprint in
its home country. It has around 400 customers world-wide. It grew
revenues strongly at over 40% to $58m in 2012, and recently announced
the set-up of new offices in Munich, Sydney, and Singapore in order to
provide stronger global market coverage. Its VC backers include Battery
Ventures, Auriga Partners, XAnge and Gilles Queru will no doubt be over
the moon at cashing in on their investment in Neolane.”
What is Neolane’s offer?
“Neolane’s tag line is “marketing that delivers” and it has
differentiated its offer through its “conversational marketing”
positioning. The main piece of their offer is campaign management but
Neolane also offers social marketing, email marketing, mobile and
multi-channel marketing, sales lead management, marketing resource
management (MRM), and marketing analytics. They offer their products in
both SaaS and on-premise varieties. Neolane’s largest markets are
retail, leisure and tourism and the media industry. Recent contract wins
include Interflora, L’Occitane, Royal Bank of Scotland, Transitions
Optical, Vorwek, Waters Corporation and Wells Fargo Center. Universal
Records is a long-standing global customer.”
The ‘so what?’ “Neolane
has long been a thorn in IBM Unica’s side, winning deals off IBM with
their lower cost ‘me-too’ proposition. The acquisition will enable Adobe
to compete with IBM and their genre, SAS and Teradata in particular for
large deals ($250,000+) in the enterprise campaign management market.
The acquisition will also greatly improve Adobe’s position in France
(Neolane's home country) and in retail (Neolane's strongest market).”
Concerns:
“there maybe company integration challenges - Neolane is very ‘French’
with some strong and forceful personalities at the top of their
organisation. When SAP acquired BusinessObjects (the French champion in
the Business Intelligence market) there was an exodus of BusinessObjects
executives, resulting in stagnating innovation and a loss of key
product knowledge and skills. SAP BusinessObjects was never quite the
force of its previous incarnation. The message is clear: Adobe must manage this acquisition with sensitivity.
“Adobe's
has many channel partners that play in Neolane’s market. For example,
just yesterday, Adobe was the Gold sponsor at Responsys’ Interact
conference in London. Responsys, Silverpop and other Adobe campaign
management partners will be considering their partnership positions. On
Neolane’s side, they work closely with data management partners like
Experian and CACI, marketing agencies like Wunderman, and systems
integrators like Accenture. For the most part these relationships should
be complementary with Adobe’s large partner eco-system.”
