As Marketo’s International Partner of the Year 2018, we’ve followed Marketo’s success over the years. Marketo’s growth has been impressive, and the company is operating in an attractive and fast-growing space. According to Forrester Research, the industry will grow from $11.4bn in 2017 to $25.1bn in 2023. This total addressable market and the fact it is now an essential adjunct to the CRM market (the CRM space is about three times the Marketing Automation size) makes Marketo very attractive.
Furthermore, Marketo is now seen as operating in the enterprise space and has filled a category leadership role left by the inertia and lack of execution surrounding Oracle’s acquisition of Eloqua. Put these two variables together, and it means that Marketo is now large enough and important enough to be attractive to a prospective enterprise buyer.
So, who should acquire Marketo to accelerate it to the next level?
In my opinion, it would make sense for SAP to step up to the challenge.
Here’s three reasons why...
1. SAP’s intent around CRM
SAP has been very overt in recent years and has stated its ambition to double its CRM related revenue within two years; their intent is clearly there with the acquisition of Callidus Cloud recently for $2.4bn. In the meantime, (as mentioned above) Marketo has been filling the Marketing Automation enterprise space—made vacant by Oracle—and has some big clients including Fujitsu, Microsoft, Google and Facebook in itself an impressive line-up. Being 100% born as a SaaS player makes them equally attractive to a more tradition system vendor (such as SAP), as reporting on these SaaS-Cloud metrics is something the Financial Analysts are now looking at very closely.
2. The SAP/Marketo relationship
Steve Lucas, the CEO of Marketo, blossomed and built his career at SAP, albeit with a brief stint at SFDC. With a pre-existing relationship already on the table, Marketo’s CEO will understand the SAP DNA and how the company works, and being very personable he might still have a bit of a soft spot for SAP.
Alongside this, Bill McDermott, the CEO of SAP, recognises that the best acquisitions come from common values between himself and acquired CEOs; in his fabulous autobiography ‘Winners Dream- a journey from the Corner Store to Corner Office’, Bill emphasises common values and shared vision as being key to making SAP’s acquisitions successful, he details the thinking behind the acquisitions of companies such as Hybris and SuccessFactors. Bill even headlined at the Marketo customer conference this year, so the connection and interest is very much already there.
3. Marketo ownership
Marketo is owned by Vista, a private equity firm with a vast portfolio of software firms including Tibco, Cvent, Lithium and Returnpath. Vista has a philosophy of buying, building, and selling, typically over a five-year period. After owning Marketo for two years, Vista would undoubtedly get a good return on its $1.3bn investment.
We can only speculate what might or might not happen with Marketo and SAP, but Marketo is clearly an attractive option with some smart people.
Who knows what will happen, if SAP doesn’t buy Marketo, maybe Microsoft will.
