With the digital front office primed for a lot of action during 2014 (see 2014 ESAS Predictions here), one of the companies we expect to be hearing much more from is San Mateo-based marketing automation platform specialist Marketo. One of the new generation of cloud-based software providers, it launched in 2006 and IPO’d on the NASDAQ in May 2013 for $78m.
It is demonstrating the high growth trajectory typical of front office cloud providers, with Q3 revenue (to Sept 30 2013) up 65% yoy to $25m - and the customary loss profile with a net loss of $10m (vs. $9.8m). The net loss may increase following recent acquisitions as it invests for growth and to play its part in the market land grab. It came to UK shores in 2011 and this is a key market for the company but it has a lot of rich competition including Oracle/Eloqua, Salesforce.com/ExactTarget, and Adobe with its digital marketing cloud, which includes the Neolane and Omniture acquisitions.
Marketing automation has a long and not particularly fine history so it’s easy to be skeptical about its prospects but it is undergoing a revival as sales and marketing adapts in the light of constantly modifying buyer behavior. Talking to Fergus Gloster, MD for EMEA (a 30 year IT veteran whose background includes being a founding director for Salesforce.com in EMEA) it was clear that he has a grasp on the nuances of the market and Europe and UK specific issues such as privacy and data residency considerations. There was also a recognition of longer sales cycles due to the need for a lot of education (e.g. best practice work), and slow adoption by large enterprises. The marketing automation proposition is essentially being rewritten with a host of new players jostling for position. With chief marketing officers increasingly wielding their own budgets, watch out for a lot of movement in this market.