Last week, Diginomica caught our eye with an article called Marketo can't catch a break as it beats Q1 2015 expectations but offers soft outlook. As Europe’s Largest Marketing Automation (MA) consultancy, it’s safe to say that there is no reason to feel sorry for Marketo.

The “woe is me” message alongside the comparison of the apparently “white hot large enterprise space” fuelled by Salesforce and Adobe (have you forgotten Oracle - the global market leaders by users?) just isn’t based on enough market insight.

The article claims that Marketo will always be “outspent” when it comes to mobile, and that the deep pockets of the MA giants will prevent Marketo from making an “enterprise breakthrough”.

The reality is that the reference to mobile in the MA space is pretty irrelevant; Marketo are doing pretty well because of their single minded focus on their target segment.

When it comes to the enterprise space, the four incumbants that make 90% of the consideration set are SFDC, Adobe, Eloqua & Marketo.

MA is still the fastest growing segment in the CRM space, and will likely be for the next few years, so suggesting an early demise of Marketo is just not right as they are a mid-market play and above.

Where the MA space is most definitely over-crowded and where there will be fall out in the next few years is in the low-end space, where too many vendors play and where the traditional ESPs (email service providers) are adding new functionality and calling themselves MA. In this segment of the space, the consideration set tends to be dominated by Hubspot, Act-on or Pardot.

Marketo IS Enterprise

The fact that Marketo doesn’t have the same relationships with systems integrators as Salesforce, Adobe and Oracle is irrelevant today. Marketing automation is a marketing purchase where IT involved, not an IT purchase where Marketing is involved.

The larger systems integrators have courted the marketing automation space for years but have never really understood it. For them, MA is still niche and will remain that way until they invest in the specialist skills required to do it MA properly. The reason being, agility is a big barrier to entry for them, whereas IT projects can run for 3,5, even 10 years. MA projects rarely have the same complexity or length of commitment. It’s the very reason that niche companies like Clevertouch, and our competitors DemandGen and MarketOne exist.

Beyond that, Marketo does have strong partnerships with Microsoft and SAP. Enterprise enough for you?

Where we would agree is that Marketo does need to review its partner strategy. As Marketo scales, they will need a partner ecosystem. Something that Oracle prides itself on as a differentiator.

At the end of the day

Q1 is always likely to be strong as it is the first quarter of the marketing budget and in many instances Marketing Automation is still seen as an OPEX, not a CAPEX decision.  But Marketo needing a break? Not for a few good years yet. The whole space in the mid-market and enterprise is alive and well.