Adobe to acquire Marketo if market speculation is to be believed.
According to Reuter’s sources, Adobe could be in the market for another piece to their digital marketing puzzle. The reports stated that they might be negotiating with Vista Equity Partners to acquire Marketo, a privately held cloud-based marketing automation software company.
This acquisition, if confirmed, can prove to be a potential landmark deal that will shake up the marketing technology space.
Vista Equity Partners had bought Marketo in May 2016 for $1.8 billion and the rumor has it that Adobe is willing to purchase it for much more. This deal makes sense for Adobe, as the company has been trying to build a digital marketing business for a while now.
Earlier this year, they bought Magneto – a platform that services both B2B and B2C enterprises – and by doing so they added e-commerce capabilities into their CX suite of products. With a large developer community, Magneto can facilitate integration with other marketing applications which is aligned with Marketo as they have also focused on building out its integration capabilities.
According to Ray Wang, Constellation Research’s founder and principal analyst, if Adobe’s interest is serious, along with Marketo they would then acquire new capabilities in B2B marketing and account-based marketing.
Started in 2006, Marketo was as an email marketing service based in San Mateo, California. According to credit ratings agency Moody’s Investors Service, last year, Marketo generated revenue of approximately $321 million.
With a market capitalization of $130 billion, Adobe has topped analysts’ profit and revenue estimates for the past eight quarters. They are driven by the strength that resides in their digital media business, which houses their flagship product Creative Cloud.
“Adobe has increasingly become a competitor to Salesforce, especially post its recent acquisition of Magento in the digital commerce market,” according to SunTrust Robinson Humphrey analyst Terry Tillman. So Adobe would potentially fuel its rivalry with Salesforce.com if this Marketo acquisition bears fruit.
Shantanu Narayen, the CEO of Adobe Systems, has downplayed these reports by stating to CNBC that Adobe is currently focused on integrating another multibillion-dollar acquisition.
But this Marketo acquisition isn’t a done deal either as there are other companies interested in purchasing Marketo which is why this rumor could just be an attempt at creating a bidding war.
Industry-leading companies in the CRM and customer experience spaces have wanted to build alliances with other vendors.
Adobe has built a substantial partnership with Microsoft and has even started co-selling applications and co-marketing products, while Salesforce and Google’s integration included the naming of Google Cloud as Salesforce’s latest preferred public cloud for international customers.
As one of the few major marketing technology vendors, Marketo is without an alliance. When Marketo combines its technologies with Adobe’s creative suite and Microsoft’s B2B breadth, it could result in a significant imprint being left on the industry.
Ever since Adobe decommitted itself from its lead management software as part of its Adobe Campaign, it has resulted in it becoming a non-viable vendor for a majority of B2B use cases. They can still sell in B2B companies where their marketing practice is closer to B2C use case which includes more email, less ABM and less complex nurturing. Marketo offers B2B marketing applications that compliment Adobe’s marketing business.
According to Lori Wizdo the analyst for Forrester, “Adobe is definitely a company at the periphery of B2B marketing automation.”
Only time will tell if Adobe and Marketo will clinch the mega-deal.