Can IBM buy success in the online marketing space?

17th Aug 2010

Analysts have warned that, despite IBM’s continued push into the lucrative online marketing space after buying Unica for $480 million in cash, its dominance of the sector is by no means assured.

The acquisition is the vendor’s eighth in the marketing and data-related arena over the last two years, with the latest one being its purchase of web analytics software provider Coremetrics earlier this month.

But so many acquisitions mean that there are "several functional redundancies in targeting, business intelligence, interaction management, web analytics and optimisation", according to Forrester analysts Joe Stanhope and Suresh Vittal in a blog. As a result, they believe that IBM needs to clarify not just Unica’s future product roadmap but also its own enterprise marketing software strategy.

Nonetheless, the analysts said: "The acquisition of Unica absolutely reinforces IBM’s assertion that they are committing to marketing solutions and the chief marketing officer. It’s great to see that IBM’s efforts in the marketing space aren’t an empty tagline."

On the other hand, they continue: "We’ve seen many companies attempt to enter the marketing space and it’s harder than it looks. IBM has traditionally been very IT-centric and turning on a dime to focus on marketing will be challenging and require a long-term mindset."

But Big Blue indicated that its aim was to integrate Unica’s marketing automation and campaign management applications with Coremetrics’ web analytics offerings and its own WebSphere Commerce platform.

Craig Hayman, general manager of IBM’s industry solutions business unit, said: "IBM understands the demands on today’s organisations to transform core business processes in functions such as marketing with intelligence and automation. Unica was a clear choice for IBM based on its power to automate a broad set of marketing capabilities."

By integrating the Unica and Coremetrics’ offerings, the goal was to help customers streamline and integrate key business processes such as relationship and online marketing in order to create a "consistent and relevant cross-channel brand experience to promote customer loyalty and satisfaction," he added.

Moreover, the firm was growing its software portfolio to help companies automate and manage business processes in areas ranging from marketing, demand generation and sales to order processing and fulfilment, Hayman said. The latter activities can be undertaken by Sterling Commerce’s electronic data interchange software, which IBM also bought in May in a bid to add another piece to the puzzle.

Unica’s 500 staff will be transferred to IBM’s Software Solutions Group. The purchase, which is subject to Unica shareholder approval, is expected to close in the fourth quarter of this year.

IBM is not the only vendor trying to get into this space, however. Adobe is making similar moves to create a 'customer experience management' software suite and has recently bought web analytics software vendor Omniture and web content management vendor Day Software to this end.

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