MarketingPilot – Why did Microsoft buy them?

So there is a lot of ‘stuff’ floating around on why did Microsoft acquire MarketingPilot vs building it themselves. Some even are questioning why do anything at all and continue to rely on the ISV channel for extending Marketing functionality.

In my opinion, it was driven essentially 100% by Marketing Pilot’s status in the Gartner Magic Quadrant. (How did I come to this conclusion: MarketingPilot proudly touts their Visionary status by Gartner on their home paget)

When you are a big boy software company like Microsoft I believe there is a lot a weight placed on your product’s ranking by analysts like Gartner. Other big buyers (Fortune 1000 companies) place a lot of emphasis on this status as part of making the initial short list. If you want instant respect then buy vs build is a very good growth model.

What the CRM Team gets with the acquisiton is the immediate credibility of a visionary ranking by Gartner for MarketingPilot.

“MarketingPilot Software is a visionary for its broad MRM vision and capabilities, but its predominate geographical focus is North America. North American clients looking for a broad MRM solution with good functionality at a lower price point should consider MarketingPilot.

Strengths
Continued growth and geographical expansion: MarketingPilot reports that new license revenue was up approximately 33%, and new subscription revenue (cloud) was up 89% during 2011. MarketingPilot has over 175 customers, adding 25 net-new clients in 2011. MarketingPilot, a private company, does not report revenue, but Gartner estimates its revenue is between $8 million and $10 million. Although many of its clients remain in the midmarket, larger enterprise clients are increasingly considering MarketingPilot, bringing the vendor into more-direct competition with Teradata (Aprimo) and IBM (Unica).
R&D investment: The vendor provides a broad set of MRM capabilities for planning, budgeting, procurement, project management, content/asset management, media buying and performance management. However, its capabilities are not as deep or complex as some of the market leaders. New capabilities include improvements to workflow/project management (e.g., task reassignment, program management, Silverlight-based routing and approvals, enhanced approval scheduling, brand management/cost allocation, enhancements to timekeeping and event management), DAM (e.g., major refresh using Silverlight technology, enhancements to file markup, routing and approvals), media buying (e.g., enhanced digital media support, advanced media planning, Strata integration and broadcast verification) and financial management (e.g., improvements to core transaction usability and productivity via a new editable grid for financial transaction items; updates to Journal Entries leveraging Silverlight technology). The 2012 road map calls for product enhancements in project management with a Silverlight calendar update; DAM with enhancements for archiving, video, thumbnailing and Flash markup; new social operations capabilities with third-party integration to Facebook, Twitter and other social networking sites; advertising integration with Google Adwords, Yahoo-Bing, Strata and SmartPlus; and broadcast and digital media planning.

Deployment options and customization: MarketingPilot supports on-premises and hosted versions of its application. It does the hosting for its solutions. It supports a multitenant SaaS option with Akela Marketing Cloud.
Fast Start implementation: MarketingPilot has introduced Fast Start services to enable customers to implement faster than they had, and cut implementation costs.

Cautions

Marketing fulfillment: Although MarketingPilot offers some capabilities in this area, it does not provide print, procurement and localization capabilities. R&D investment in this area has not been as high as it has in areas of planning, financial management and creative production management. Clients with robust fulfillment requirements will need to consider alternatives or plan to integrate a third-party application with MarketingPilot.
Global clients: Although approximately 25% of its sales are outside the U.S., MarketingPilot predominately sells into the North American market, with few personnel located outside the U.S. market. Global prospects should carefully assess the capabilities of the vendor to support multiple regions. Local support in regions outside the U.S. are not established. While consulting services are available globally, technical support is provided from a single U.S. facility.

Increased competition: MarketingPilot faces increasing competition in its key geography from vendors such as BrandMaker and Orbis Global entering the North American market.

Potential acquisition candidate: As MarketingPilot gains increased visibility and traction, improves its marketing functionality, expands internationally and moves up market, it will be an attractive acquisition target for a larger company looking to enter the MRM or marketing automation market.” (blogger note: this was written in January 2012, interesting predictor)

Source: http://www.gartner.com/technology/reprints.do?id=1-19253G5&ct=120131&st=sb