The purchase of Silverpop will give IBM a best-of-breed email marketing offering and give Silverpop financial stability and resources. Customers of both will benefit, but the deal won't much change their competitive position.
On 10 April 2014, IBM announced a definitive agreement to acquire privately-held Silverpop, which provides cloud-based marketing management tools. IBM expects to close the deal in 2Q14. IBM did not disclose the deal's financial terms.
Silverpop will benefit most from this deal. It should ease any questions about Silverpop’s viability as a stand-alone marketing automation and email software provider in a commoditized market. Silverpop has recently beefed up its ability to bring more data into targeting and to improve connections with the commerce process. But as a small vendor (with an estimated $85 million in annual revenue), Silverpop was limited in its ability to expand. Silverpop will benefit from the support of IBM’s infrastructure and sales force as it faces increasing competition from large marketing cloud providers with more resources and touchpoints into organizations. IBM will fund development for Silverpop and will increase Silverpop's integration with IBM's other marketing technologies. We believe that IBM will also continue to support integration with Silverpop's partners such as Adobe, Microsoft and salesforce.com.
IBM will benefit primarily from Silverpop's enterprise-class email marketing offering, used by over 5,000, mostly B2C organizations worldwide. The solution will bolster IBM's own eMessage offering, which has not gained much traction in the market. Like many large software vendors that want to expand into cloud-based marketing offerings, IBM has been acquiring new digital marketing functions, such as Xtify for mobile marketing (2013) and Tealeaf Technology for Web behavioral analytics (2012). Silverpop’s easy-to-use cloud offering will give IBM stronger marketing automation functions and perhaps more opportunities to sell into the mid-market. Email is the No. 1 channel in most multichannel marketing projects, and Silverpop’s email capabilities are well-tested. Silverpop remained one of the stand-alone providers of enterprise-level email marketing left after acquisitions such as E-circle (by Teradata), ExactTarget (by salesforce.com), and Responsys and Eloqua (by Oracle).
Gaps remain in IBM's digital marketing portfolio. Silverpop offers B2B lead management although we estimate it accounts for only about 30% of the company's revenue. Gartner believes Silverpop won’t help IBM much in this area, where it has lagged behind. Silverpop also does not possess the horsepower in social marketing management that IBM lacks — an area increasingly important to digital marketing solutions.
If you use Silverpop Engage for B2B lead management, ask IBM for a product road map and integration plans before additional investment.
If you want support for multichannel marketing and a cloud-based integrated marketing strategy, consider IBM’s broad functions: predictive analytics (SPSS), mobile push (Xtify), Web analytics (Coremetrics), Web behavioral analytics (Tealeaf) and e-commerce offerings.
Consider Silverpop as a viable integrated email marketing choice.
If you use eMessage, ask IBM for a migration path as the vendor will likely transition customers to Silverpop's solution.
IBM and Silverpop prospects:
If you're considering IBM or Silverpop for email or multichannel marketing solutions, proceed as planned. This deal will not greatly change the competitive position of IBM/Silverpop and should not alter their placement on your shortlist.
If you had excluded Silverpop from consideration due to questions about its long-term viability, reconsider it for email marketing or marketing automation.