Marketing as a Service (MaaS): The next wave of disruption for marketing tech

Marketing technology has seen a remarkable innovation boom over the past 10 years — so much so that the market now boasts over a thousand vendors that IDC organizes into more than 75 categories. IDC believes this structure is unsustainable and over the next three years the forces of consolidation will exert fundamental changes in the way large enterprises provision marketing infrastructure and from whom they provision it. The marketing technology market, like much of the IT industry, will move to a cloud based service model which IDC calls the “third platform.” As the illustration shows, more than 90% of the growth in the IT industry will come from this model.
For marketers, the third platform means the advent of Marketing as a Service (MaaS), which will have transformative affects for IT, IT services, and creative agencies. Key indicators that MaaS is on it way include:
  • Unsustainable complexity: Point solutions have come to market independently leaving it up to marketers to assemble them into rational infrastructures. This is a highly inefficient market model for buyers and sellers.
  • Transition to platforms: The consolidation of point solutions into platforms has already begun. Many noteworthy acquisitions have been made by major vendors such as Adobe, IBM, Oracle, salesforce.com, and SAP. However, this phase of market development will not last long as markets move rapidly from platforms to “… as a Service” models.
  • Digital and creative coming together:AdAge recently named IBM the number one global digital agency in the world. IBM is rapidly hiring from the agency world to build out its creative services. Adobe has deep and long standing technology partnerships with many top agencies. The agency world needs a value proposition that will allow them restore margins and regain strategic relevance.

MaaS includes the fundamental technology, IT services, and creative services that marketing needs in a bundled offering. Bringing these services together delivers significant value to CMOs who have two key sources of pain: On one hand, their agencies cannot effectively execute omnichannel campaigns nor deliver real time attribution reporting. On the other hand, technology has added a great deal of cost and complexity to their operating environments. MaaS enables them to outsource much of the technological complexity, pay for it out of their advertising budgets and get better integrated marketing services from their top agencies. For tech vendors it means gaining access to the advertising budget which dwarfs marketing IT spend by orders of magnitude. As a result, IDC expects this model to be a major route to market for marketing technology in the enterprise segment. It is therefore an urgent action item for tech vendors, system integrators, and agencies — partner now or lose a major channel. 

For more information on this important trend please contact me at gmurray(at)idc(dot)com.


Three Big Ideas from Dreamforce 2014

https://www.salesforce.com/dreamforce/DF13/Dreamforce, Salesforce’s user conference, is always a phenomenon – boatloads of sales and marketing tips and tricks alongside the philanthropic videos and big name entertainment. However, it was these three ideas that impressed me most.

Marketing automation enters the age of the platform: The integration theme threaded through Dreamforce as the company unveiled Salesforce 1, a platform for the Internet of Customers.  Providing a quality digital customer experience requires the integration of applications, data, messaging channels, and delivery mechanisms (including mobile and machines). Like an orchestra playing a piece of music, a brand is more richly experienced by multiple instruments simultaneously. Orchestration is the key. If the oboe plays independently in this corner and the violin over there, you can imagine the discord – even if they all work from the same sheet music. Integration, platforms, and clouds are themes I’ve also heard from Oracle Eloqua, Marketo, Adobe, IBM, Hubspot, and Microsoft. Most of these companies will fill in important platform gaps over the next few years to become winners (I think Salesforce will clearly be in this camp).

Why this matters:  Marketing technology platforms will prod two big changes. Marketing will need to reorganize and become multi-channel and customer experience oriented.  And although vendors playing nice together will be easier to do in the cloud than it was for on-premise software, CMOs will someday find it valuable to standardize on a platform (or “cloud”). Hopefully, they will have differentiated choices that optimize for different business models.

Growing importance of design: I was super impressed with the fireside chat between Marissa Mayer, CEO of Yahoo and Marc Benioff, Salesforce’s CEO. I found Marissa’s ideas on design most intriguing. It’s a topic you don’t hear much about in business circles, yet it was clear that her views on design informed her strategy for Yahoo and her leadership style.  One of Marissa’s points – don’t design for the expert.  Create a “big green button” for the thing people most want to do. Expert users can afford to work a little harder to get their bells and whistles.  Simple things, if they are the right things, make a huge difference. Think about the impact of Amazon’s iconic Add-to Cart one-click shopping.
Why this matters: Change-agents (managers, marketing ops pro’s, communicators, etc.) would benefit from getting grounding in design. You might start with a little podcast I recently found called 99% Invisible.

Marketing in the moment:  Marketing is speeding up. Few marketers remain unconvinced about the value of personalization. Messages are more effective when they leverage the viewer’s attributes. Now it seems that time is also becoming an impact point. Your message is more relevant if it pops up within the context of a real-time conversation. Some moments are daily habits – such as exercising, or conducting a task at work. Other moments are occasional, shared, and public – such as a sports event or an event like Dreamforce. Some moments can be planned for but others will pop up opportunistically and you need to be ready.

Why this matters: Marketers pay lip service to the concept of “agile” but marketing in the moment requires a truly different approach than planning a launch. Agility is what enabled the Oreo marketing team to steal the moment at the Superbowl. Read this Wired story to learn how they did it.

These are three ideas that I’m going to pay more attention to.

Next Gen Marketing Teams: From Silos to Systems

Automation has revolutionized marketing. It has brought new insights, capabilities, and methods of engagement. It has demanded new skills, thrust us into the omni-channel universe, and opened new levels of visibility and accountability. But these are all ripples in the pond, so to speak, only the most immediate after effects of a rather large splash down. The most profound change is just beginning to be felt. Automation has introduced the notion of an enterprise customer creation process, a horizontal function that cuts across all marketing activities. Effectively implementing and managing this process requires next generation marketing teams to be much more integrated and coordinated. 
Despite its mystique as a freewheeling, creative and dynamic function, corporate marketing is in reality a deeply fragmented hierarchical organization. Specialists typically function in separate domains moving from project to project with great urgency, rarely having time to consider the big picture. The need to be highly responsive to changes in direction has created a culture adverse to structured workflows. However, as marketing automation solutions consolidate into an enterprise system, a diverse set of marketing roles, process definitions, and data structures are brought together. In response, marketers are beginning to redesign their organizations around workflows instead of activities. Rather than having social, web, advertising, content, partner, analytics, systems admin, etc. in separate organizational buckets, these roles are being reformed into cross functional teams responsible for executing entire campaigns. 
Marketing solutions are starting to be designed around a multi-disciplinary community model. Adobe’s marketing cloud offers a collective view of the campaign workflow for each member of the team and unique workspaces for the various roles in content production, campaign management, analytics, etc. Each member can see what contributions have been made and why. They can communicate in real time on key issues and how they affect the overall process. IDC expects this trend to become pervasive. Providers such as Salesforce.com, Oracle, IBM, SAP, and others are driving their solutions around a vision of the “customer facing ERP” which integrates all customer facing functions in what will most likely be a hybrid cloud for managing customer experience. The implications for organizational design will be significant and CMOs should start instilling the culture of workflow based communities as soon as possible. 

Dreamforce ’10 – the don’t Miss Event of the Year … for CIOs

Salesforce.com held its annual user conference December 6th to 9th in San Francisco. It was unusual in that very little of the messaging from Salesforce.com itself was aimed at sales people. The company has clearly and emphatically hammered its stake in the ground as the cloud platform provider for the enterprise. Marc Benioff and other top SFDC execs spent all of the general session keynotes on four key ideas:

  • Platform
  • Cloud
  • Social
  • Mobile

If that were a word cloud of the transcripts of the keynotes “platform” would be the biggest and boldest of the four. The company made several significant announcements about how it is enhancing and building out the enterprise cloud computing platform of the future – much of it aimed at CIOs and developers. First however, there were a couple of items that will be of interest to sales and marketing people:

Full integration of Jigsaw. Jigsaw, the “crowdsourced” contact database will now provide dynamic updates to records, greatly reducing blank or incomplete record status and making it easier for sales and marketing people to contact the right individuals within their target accounts – to the extent that Jigsaw can provide clean data.

Chatter Free. Announced earlier this year, Chatter is the SFDC collaboration app. SFDC cited user numbers in the 10,000s at NBC, Qualcomm, and Nikon, and 100,000s at Dell. With Chatter Free, limited Chatter functionality will now be available to people that don’t have SFDC licenses. Users can add SFDC features for $15/user/month w/o the need for a SFDC license. Salesforce.com clearly expects Chatter to make SFDC adoption a viral phenomenon. What Chatter adds to the picture beyond being “Facebook for the enterprise” is the ability to follow not only people, but groups, accounts, and contacts – potentially any record in the SFDC.com database. Chatter will help companies share tribal knowledge as well as better coordinate the outreach multiple business units may have with key contacts and accounts – both very good things that go way beyond being Facebook Friends with all of your customers and employees. Regardless of whether it drives more licenses, it sets the stage for the platform sell that’s coming next.

Platform as a Service (the CIO part)
Database.com. Significantly, SFDC claims database.com is open to any environment, any programming language, and any device. It provides relational data services, full text search, user management, row level security, triggered and stored procedures, authentication, support for APIs (db to db calls), as well as a myriad of other features such as the ability for each record to have a profile that supports followers and feeds (see http://wiki.database.com/page/FAQ for more info.) Touting the power of the cloud, SFDC presented statistics showing that in the last year the number of transactions grew 50%, the number of records doubled from 10 billion to 20 billion, and average response time decreased.

Open Apex. Salesforce.com has launched an open programming language for the cloud that supports multi-tenancy. Now developers can work in the cloud to customize and enhance Salesforce.com apps as well as develop a host of other independent enterprise applications for any function – marketing, accounting, services, provisioning, HR, etc. This should fundamentally change the perspective of the IT department about cloud computing – it’s open, has its own IDE and database, supports web and mobile development. You no longer have to have code on premises to manage and customize your enterprise functionality.

Ruby on Rails. Web development is native to the salesforce.com cloud platform. Java support is provided by vmForce and acquisition of Heroku provides both a hosting platform and an IDE for native Ruby on Rails development in the cloud. This greatly eases the process of making enterprise apps web and mobile ready.

“Now we’re finally a real platform company”

SFDC now comprises: salesforce, serviceforce, chatter, jigsaw, database.com, appforce, siteforce, vmforce, Ruby, Apex, Eclipse IDE, ISV force, and more. The mantra heard repeatedly from senior SFDC execs was that Salesforce.com is now a real platfom company.

The big picture for Salesforce.com is to provide all the layers of the IT computing environment as a shared service that is managed, tuned, updated, and upgraded automatically. This greatly reduces the administrative overhead for IT while providing all the application and data control they need to rapidly respond to business requirements (and not having hundreds of rogue DIY projects all over the place.) All good things, but the risk is whether the platform can be trusted to provide all that without failure or outage or providing a conveniently centralized target for cyber attack.

While SFDC sets its sights on becoming all things to all people in the cloud, it is not intending to be the single source for automating the response to revenue process. Recent IDC research shows that 75% of SFDC customers also use up to five other sales and marketing automation solutions (see Marketing Automation: The Rise of Revenue, IDC #225860, Dec 2010.) The Expo floor featured representatives from the entire sales and marketing ecosystem – marketing automation, customer intelligence, list and database management, sales enablement, forecasting tools, proposal tools, and many others. As a result, customers will continue to be in the position of cobbling together “best of breed” solutions, and having to integrate the data, systems, and workflows required to manage and measure the performance of the customer creation process.