IBM purchased Unica Corporation late last week at a very significant premium – more than double Unica's closing price the previous day. IBM has been a partner and client of Unica and this purchase has long been rumored, so it was not entirely a surprise. The premium was eye catching in this market, particularly in light of Unica's financial performance this past year, but it was a small deal for IBM and, if they can leverage this asset through their bigger reach, it will have been well worth it.
Quaero is one of Unica's biggest and best known professional services partners, we continue to host Unica's suite of marketing products and serve many clients' onsite installations through our QuaeroCare service.
So what does the acquisition mean for Unica's clients, many of whom are Quaero clients as well? In the short term, it will have little or no impact. It will take some time before IBM makes decisions on how best to absorb this acquisition on top of other recent acquisitions in related areas, e.g. Coremetrics, SPSS, etc. Elephants may be able to dance, but they do have a hard time sprinting. So clients will have time to wait, watch and make decisions.
In the long term, it appears to be a good thing. The enterprise marketing management space has always been relatively small. The entry of a company like IBM, with its formidable sales force and large corporate relationships, promises to make it larger and more respectable, perhaps attracting newer players and more innovation.
In the medium term, the impact is uncertain. IBM will have to make some key decisions on how the different pieces of their marketing puzzle fit together and even whether they retain all of the different modules in Unica's product suite. This does strengthen their hand against large competitors like Oracle and Teradata, who have had a stronger vision and products in this space. The core campaign management application, which is where most of Unica's revenues come from, is probably secure. The email delivery capabilities that Unica acquired through its recent acquisition of Pivotal Veracity are also valuable. The rest, including the on-demand and web analytics products, face uncertain fates.
Given the recent activity in this space, it is probably a safe bet that secondary players such as Aprimo are in conversations with potential acquirers, including SAP, Oracle, Microsoft or Adobe. SAS, being large and privately held, will continue to be a major independent player. This acquisition may prompt Oracle to sit up and take notice. They have not really focused heavily in the marketing end of their Siebel suite. IBM's entry may prompt a rethink.
All of these players will be going after large, enterprise deals, leveraging their existing IT relationships. This could impact marketing buyers, who have been Unica's traditional focus – they may have less leverage in this environment. Emerging players in the marketing automation space, which tend to have stronger capabilities in some of the newer channels and are more agile, may find their position strengthened in the marketplace, as they compete for focused marketing opportunities against the giants who go after the bigger deals.
Marketing continues to evolve rapidly. Unica was one of the first players to bring serious automation to different aspects of marketing. As digital becomes dominant it is no surprise that the large technology players are starting to pay attention. As folks who have been actors in this movie from the beginning, we embrace and look forward to this exciting new era. Let us know what you think. We would love to hear from you and will be delighted to help you with this transition.