Yesterday on a Focus roundtable, I asked the panelists to make a prediction about what, if any, Salesforce.com would announce in the area of marketing automation at their big Dreamforce conference in San Francisco next month.
Their consensus: nothing.
I decided to place an outside bet and go on record that Salesforce would acquire HubSpot, a fast-growing marketing automation vendor. I predicted that Salesforce.com would incorporate HubSpot's offering into its marketing cloud and hedged my bet by saying it may not be next month (almost certainly not), but it is possible. Here are some reasons why that just might happen:
1. Marketing automation helps drive CRM adoption success.
From its earliest days as a sales force automation system, Salesforce.com has required sales people to enter account information, enter forecasts, enter deal information, seemingly for the benefit of management. Adding a sophisticated marketing automation system into the mix increases the value of the overall solution to the sales team. Salesforce has already indicated they are interested in making their product a "destination" site for the enterprise with the introduction of their Chatter product last year.
2. HubSpot fills a gap in Salesforce's product offering
Most marketers know that the marketing functionality in Salesforce.com could be more complete. Sure, you can capture web leads, track prospect activity through a campaigns tab in the application, and perform some data manipulation. But the features are way too basic for a sophisticated marketer and way too confusing for a small business marketer. HubSpot's easy-to-use interface, along with recently acquired company Performable's great analytics would make Salesforce an even more attractive option to companies of every size.
3. Salesforce has been dancing around the space for years
From early announcements after buying Kieden, an early search engine marketing AppExchange partner, to recent rumors that Salesforce was in negotiation to buy an email/marketing automation provider in recent years, it's clear Salesforce has been thinking about beefing up its marketing offering for some time. The recent investment in HubSpot could be a signal that they are finally interested in making a move.
4. The one who has the most enterprise data wins
Salesforce has clearly stated in recent years that they want to be the Google for the enterprise, transforming themselves from a set of products into a platform for companies to run their business on. In recent years, they've added Database.com to their offering as well as platform development tools. Marketing automation generates the biggest amount of enterprise data of any back office software, and most of the current marketing automation partners do NOT use the Salesforce database to warehouse that data. There's a risk that a Salesforce.com customer could unhook their CRM system and integrate their marketing automation data with Oracle's CRM on Demand, SugarCRM or Microsoft's solution. By offering their own marketing solution, Salesforce.com brings that important data under its own covers.
5. HubSpot and Salesforce.com could grow the marketing automation market
Industry analyst David Raab tagged the marketing automation industry as experiencing lackluster growth. While it's been around for 10 years, it hasn't seen nearly the growth of the CRM business.
Part of the reason for this is that marketing automation vendors haven't substantially grown their industry penetration beyond technology and business services. Sure, there are early adopters in other industries, but there is still a lot of money out there for the company that can take a good story to the B2B market. HubSpot has a great story and Salesforce has the industry's best platform from which to tell that story.
Sure, there are dozens of reasons why this might not be a good idea. Salesforce makes plenty of money from the existing marketing automation vendors, from event sponsorship to helping to lock customers into an integration between MA and CRM software. And there's an argument that the seat-based licensing model of Salesforce is inconsistent with the transaction or database size pricing of many of the marketing automation vendors. Still, with the recent Salesforce acquisition of Radian 6, the company has shown that it won't hesitate to enter a segment it finds attractive, regardless of the business model.