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Adobe’s Acquisition of Neolane

Global Banking And Finance 1 News

Ovum Comments: Adobe’s acquisition of Neolane sets alight the blue touch paper on a Digital Marketing Mega-Vendor Showdown

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.”
 

 

 

 

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