Predictions for 2020

Two analyst firms have put out some predictions for the future of WCM earlier this year;

I’m going to outline my 2020 predictions for the market – a little early as I want to get a head start. I reference both firms above because in a lot of cases, I agree with the thinking. In fact, much of the “agile CMS” manifesto from Mark Grannan was very similar to some of the underlying strategy behind the Stylelabs acquisition and some of the CMP integration roadmap. That said, I don’t want to repeat what’s been said already, so here are my (hopefully distinct) observations.

Vendor and category blur intensifies

All sorts of weird and wonderful things are happening to martech, but the biggest one of consequence is the overall level of market confusion that businesses will have to contend with. WCM is getting both bigger (continually adding chunks of CDP, adtech, marketing automation, etc.) and smaller (headless, SaaS solutions such as HubSpot CMS and Questions around cloud (IaaS, PaaS, single-tenant SaaS, multi-tenant SaaS, static-site generation, front-end JavaScript, CDNs, Netlify, Gatsby.js, etc. etc. etc.), subscription vs. perpetual and pretty much every combination add to the level of confusion.

CDP as a standalone category first struggled to differentiate itself from DMP (good article from Martin Kihn, formerly of Gartner, now at Salesforce), and now has to contend with being absorbed by marketing cloud platforms, WCM and CRM vendors (did I mention Martin Kihn was now at Salesforce? What a co-incidence…). For various reasons (mostly to do with some big-data buzzwords) the CDP category has massively exploded well beyond the ability for the market to carry it (expect a blog post on that one).

Similarly, WCM will start to get absorbed into larger marketing clouds. Salesforce has a CMS beta in Community Cloud where many of the other functions (CDP, personalization, user management, marketing automation, etc.) will already live in those clouds, similarly SAP is also making a concerted effort around CX – their current offering (formerly Hybris) plus Gigya give them a solid base. I am far less sure of the value the Qualtrics acquisition brings to the play (especially at a 20x valuation) – unless it’s akin to the Microsoft acquisition of Groove networks (buying people and culture – namely folks like Ray Ozzie who became the CTO and ultimately laid the groundwork for cultural transformation and cloud).

CMP consolidating or being subsumed into adjacent technologies

The core functions of a Content Marketing Platform; collaboration, curation, campaign planning and content strategy/funnel mapping are functions that should have been WCM for quite some time. I wrote a longer post here, but in summary, the need for CMP will accelerate, but the sector itself will face some revenue/growth challenges and consolidation.

Adtech vs. martech replacing the old IT vs. Marketing battleground

The main source of “creative tension” in WCM has always been characterized by the relationship between IT and the marketing organization. WCM used to be almost solely the domain of IT; it was a lot of infrastructure to get up and running and IT would treat the deployment of content much like handling support tickets, which of course was not tenable. While there are still many IT-centric WCM systems – and IT still has a veto over technology choices – it could be argued that marketing is now firmly in the driver’s seat as customer experience drives more budget and purchasing decisions.

The new battleground for budget and attention will be adtech vs. martech. Recently, Jason Fried of Basecamp tweeted a well-known but interesting point about the fact that competitors can buy up keywords of your company/product name. This and the more obvious point about the fact that buying keywords is easy – there are fewer and fewer opportunities for differentiation. Combine this with the general trend for consumers opting out of advertising means that lazy brand-building is no longer acceptable and that advertising as a model is at risk.

This of course means that the slack needs to be picked up by better customer experience, which is enabled by better customer journeys, and far better content marketing. Some example vendors doing a great job of this;

SaaS takes over the WCM mid-market, but not the enterprise

This has actually been happening for quite some time – WordPress is basically a SaaS offering in most contexts (PHP is easy to deploy and customize in real-time, either on their own or your hosting platform) and you need only look at it’s prevalence in the Stackie Awards year-over-year to see that WordPress is pretty prevalent here, even among customers with greater marketing needs (the business logic is offloaded to other integrated systems).

What is new in 2019 is that in some stacks, there is no specific callout for WCM at all. Often you will simply see a reference to HubSpot or Salesforce Marketing cloud. Similarly, in Commerce you are often seeing Shopify own a large segment of the market where lower Gross Merchandise Value (GMV) makes it simpler to use this as an option.

(PS – as per Shopify’s 40-F – they rely solely on Stripe as a payment provider. How long before these two shack up and own both online and PoS channels?)

However, at the enterprise space, most customers still have strong integration/customization requirements. In some cases, legislation may mandate an on-prem solution, or they are tied to legacy back-end systems. And even where these requirements don’t exist, the vendors servicing those markets are tied to some legacy stacks and the sheer amount of functionality makes it hard to migrate. Adobe and others are making managed services far easier, but this is still not quite a true SaaS play yet. Only one vendor (to my knowledge) has successfully undergone this transformation; Oracle led the trend in converting a “leading (but legacy) enterprise” stack with the old ATG commerce and spent a number of years in the wilderness dropping out of Forrester leader position and only recently returning to market leadership with a full refactoring of Oracle Commerce Cloud (but notably also retaining IaaS/PaaS/on-prem flexibility with Oracle Commerce and much shared codebase). But even that required a number of years and considerable “market confusion” (as per Gartner) about the various offerings.

Wildcard bonus prediction: Adobe to (maybe) acquire some overlapping products

I’ve never quite got my head around the Adobe acquisition of Magento. AEM is a very enterprise-heavy, java-based WCM system. While I had predicted that Adobe would still buy a Commerce solution (despite having their long-standing and solid Hybris partnership stymied by SAP), I would not have guessed Magento. While Adobe had some open-source roots from Day, including elements like the Jackrabbit JCR and Sling being Apache projects, it is largely now a proprietary play with an emphasis on enterprise development and integration and not an open-source community or model.

In turn, Magento is a PHP-based system, with a mid-market and a still active open-source model. Some analysts have argued that Adobe wasn’t really acquiring the technology, they were acquiring the community, which I don’t disagree with. (It could have also been a spoiler to prevent Acquia from further deepening their partnership with Magento, all their other competitors at that level – namely Sitecore and Episerver – having eCommerce offerings themselves).

That said, they now have two very different products, markets and models to anchor their main Customer Experience entry points – so here’s my wildcard prediction: I think Adobe will still look to acquire a java-based Commerce system (my guess would be Elastic Path) to fit snugly with AEM and also look to either buy or build a WCM that is more appropriate to Magento and that mid-market/community-based audience.

There is certainly some precedent for acquiring and maintaining overlapping vendors; Adobe acquiring both Neolane and Marketo, Salesforce acquiring Demandware and Cloudcraze (not to mention owning Pardot, which they got by virtue of it being acquired by ExactTarget) – but at this point in the vendor musical chairs, there are fewer options that may make sense at the price (versus building), so I am actively hedging on this one. It may not happen, but I would be completely unsurprised if it did. But I do think that Adobe will have more trouble trying to push AEM down to mid-market (the architecture alone makes this difficult), so they need to do something drastic if they want to succeed in both markets.

Good product, bad business?

Following my post on CMP, Shafqat Islam, the CEO of NewsCred, one of the notable vendors in the space wrote the following comments:

In a couple months there will only be one pure play CMP vendor left standing. Everyone else will be acquired, out of business, or a zombie company. Sad truth about the category.

Shafqat Islam

I wrote a longer reply, but here is the short version relevant to this post: …this is one of those interesting cases where there is a need for the product – but […] the businesses are struggling“. He then replied with this absolute gem, which kept me up last night (emphasis mine):

Yup, agreed. The need is there but it’s been a lot more challenging to scale a business in this category (for a variety or reasons). I think companies were over funded in the early days pre-product market fit. We retrenched for a couple years, chose to obsess over customers (gross retention, NPS) and now scaling and enjoying growth again. But we managed our cash through this whole process. And a category, given the huge amounts of funding, cash wasn’t managed well. I tell my team that outlasting everyone is a winning strategy since there is still a need and $$$ out there.

Shafqat Islam

That one really made me think, because many of the underlying issues in a business can often be traced to the capitalization structure and how that money was spent – rather than the need or quality of the product. What kept me up at night was the realization that the WCM market has some of the same dynamics, but on a slightly larger scale.

So, that said, let’s dig into the WCM market and look at a few example vendors, the demands put upon them, and how this affects you, the buyer.

Publicly-traded companies such as Adobe are beholden to the street (and often a compintel dream) because they outline not only past performance “Adobe Experience Cloud revenue of $2.44 billion increased by $413.4 million, or 20% (down from 24%), during fiscal 2018” (Adobe 10-K, FY18, Page 41) often down to a geography and product segment, but also indicate some expectation of where growth will come from in the future.

In addition, when used in this report, the words “will,” “expects,” “could,” “would,” “may,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “targets,” “estimates,” “looks for,” “looks to,” “continues” and similar expressions, as well as statements regarding our focus for the future, are generally intended to identify forward-looking statements.

Adobe (and pretty much any other annual report)

Do a search on any of those terms in an annual report and you get a decent sense of corporate priorities and concerns going forward. For example, in the case of Adobe, page 9 of the annual report is a particularly interesting read to understand where Adobe fears competition “Google, IBM, Oracle,, SAP, SAS, Teradata, Shopify” and “Creative and digital agencies, as well as SIs, are increasingly investing in acquiring their own digital experience technology to complement their creative services offerings.” (which also echos a conversation I had with Scott Liewehr recently).

In general, these larger platform vendors can be extremely clever with their strategy. Because they are looking at overall growth, they get to allocate resources and capital effectively to deal with specific market conditions. What does that mean in practice? They can do things that standalone vendors cannot, like aggressive discounting or bundling less competitive offerings in order to gain market share. Often, they have a significant “moat” they can take advantage of; in Adobe’s case, this is the relationship with the CMO and creative agencies due to near monopoly dominance in creative tools. Salesforce has a similar dominance in CRM and back-office processes of companies. Of course, this also means that if a vendor achieves dominance in this field, do they then throttle back investment in the product or start messing with the terms of the renewal?

Next, you’ve got the category of those that have raised capital. Now, in most cases, taking VC/PE money is a great idea – and often even nessesary in a red-ocean market where you need scale to compete. But a critical factor is making sure the VC/PE team adds underlying value. Examples of this include; Accel-KKR acquiring both Episerver and Ektron – they managed actually achieve that elusive business concept – synergy – in that Episerver had a good product, but primarily a presence in Europe. Similarly, Ektron had a mostly North American partner and customer base, and they combined both product and business aspects from both and managed to succeed in migrating the Ektron customers they wanted to keep and continue growing the business.

Similarly, Contentful has also chosen wisely. Their Series C and D rounds added experienced and relevant talent to the board and importantly includes investment from potential suitors SAP and Salesforce.

Dave Kellogg has a great article on “Career Decisions: What To Look For In a Software Startup” that has some excellent wisdom that also serves to help understand the incentives and pitfalls of money and corporate structure that apply equally to a client/vendor relationship.

At this point, the market has grown to the point that any vendor of scale needed to take the capital to buy/grow that market share (one need only look at the market and mindshare comparison of Contentful and Contentstack to see the difference external funding makes in growth) – which is, of course, an arms race where those businesses with VC/PE money need to be chasing 40% growth in an industry that is only providing 17% (as per Melissa Webster, IDC). Note that Adobe, the market leader only achieved 20% growth in this segment (down from 24% on year previous). This means in practice there is a risk factor in that those vendors will either try to steal market share (risky, expensive) or have to deploy capital into new markets – hosting, services, adjacent businesses, etc. which typically lie outside their core competencies.

This is related to Shafqat’s point: “outlasting everyone is a winning strategy” and even Contentful CEO Sascha Konietzke said “We had just raised our last round about a year ago. We still had plenty of cash in our bank account and we didn’t need to raise as of now. But we saw a lot of economic uncertainty, so we thought it might be a good moment in time to recharge.” echoing the need to potentially have investment and access to non-equity capital (i.e. debt) with lower return expectations simply to ride out some of the coming marketplace battles.

Analyst firms do a varying job of outlining these vendor (as opposed to product) structural risks; Gartner and Forrester write specific vendor cautions, Real Story Group tends to articulate risk around the age and relevance of tech stack.

So what can you do as a client? It means that in addition to looking at a simple technology purchase decision, you also need to consider overall company strategy and plan appropriately. Vendors in different financial positions have varying pressures which may or may not align with your software purchase strategy. Some vendors may prioritize growth and new features over supporting existing clients. Others (such as OpenText), do literally the exact opposite. However, often the financial internals and even overall strategy of a company can be pretty opaque. You can keep up to date with industry press releases of yearly financials or fundraising rounds which often will make CMSWire or similar trade publications. Sometimes a client call to your analyst firm can provide some background and a level of detail that you won’t necessarily get in your MQ or Wave. But the main bits of advice I would give would be to keep your vendor on a short leash and ensure you’ve got a good contingency plan in place. This means the following;

  • Understand your long-term priorities and those of your chosen vendor(s). Are they focusing on innovation, growth and new customers – or are they focusing on keeping existing customers happy and successful. It’s very difficult to do both. Which approach suits your organizational style? Does their market approach take into account larger trends within the industry?
  • Consider your bundles very carefully. Just because your large marketing cloud vendor has a WCM they will “throw in, cheap” don’t skimp on the requirements-gathering phase. WCM is complex enough and many features often go unused (even in those platforms you actively select!) so be sure to choose wisely. “Free, as in puppy” is great if you wanted – and got – a Doberman because you needed a guard dog, probably a lot less fine if you got a Pug. Software cost is usually the smallest fraction of overall TCO, so if your implementation costs skyrocket from poor product fit, this could very easily cost more than you would save in licensing. Best-of-breed is more and more common, and accepts the reality that more often you are beholden to the skillset of the people you have or can get (and what they are agile and comfortable with) rather than buying on features or price.
  • De-link software from services. Just because a vendor offers hosting, or implementation/consulting services, it doesn’t necessarily mean they are the best fit to deliver that for your organization. If you do one-stop-shop (and often there is good reason to seriously evaluate this option, for example tools like Acquia Cloud Site Factory make management far easier), work to keep these contracts separate and continually evaluate best fit. As an example, as an open-source vendor, Acquia is somewhat “forced” to do this by nature given that the product can be deployed by anyone – including those with no partnership with the company – and as a result they need to compete hard for hosting and services and have to regularly say so. (I will take a moment here to plug – I expect this type of cloud middleware/devops to take off, especially as multi-cloud becomes more of a strategy within larger organizations… which is related to the next point).
  • Always be thinking about migration strategy. This isn’t just to potentially change vendors (in case of technology or licensing changes) – but even vendor upgrades often require a lot of planning and consideration. This means adhering to some best practices like not putting mission-critical business logic in the WCM, properly separating content from presentation, etc. Also, a good migration strategy is also closely related to a good content strategy – if you can understand and abstract your content and processes outside of the CMS, you are forced to do a level of planning and understanding that is portable and will also make any WCM implementation smoother.

CMP is ready for something big to happen…

About three months ago, Ryan Skinner – the Forrester analyst for B2C marketing professions – wrote a long (25 tweet!) thread about Content Marketing Platforms (CMP):

I won’t repeat the entire thread, because you can read it for yourself directly from Ryan, but it does do a good job breaking down the current state of the industry and the overall need.

When I was at Sitecore, CMP was a big focus of mine and we worked very hard to get that functionality into the overall portfolio as quickly as possible (to the point that Sitecore debuted in Ryan’s report: “The Forrester Wave™: Content Marketing Platforms For B2C Marketers, Q2 2019” with a new offering as a Strong Performer).

However, I think that CMP adoption will accelerate and start to get over that “slow, grinding, unpredictable” growth for the following reasons:

WCM vendors will finally “catch up”

WCM has its roots in a very IT-focused side of the business. Concerns such as tech stack, latency, permissions, etc. were of paramount importance. You need look no further than the fact that Interwoven Teamsite was basically source control for content (complete with branching and merging) – because that was the prime metaphor that most IT people understood. However, the role of WCM has evolved a great deal from an IT-lead enabler of marketing functions to a core part of marketing and customer experience activities. However, this history still causes a split among internal teams and even within vendors – and as a result technical and architectural features still usually dominate the conversation. In light of this, CMP sprung up as a category, largely because WCM vendors were not serving that marketer-led, content strategy function. Two WCM vendors (Sitecore and Bloomreach) have recognized this need directly and appear in the B2C CMP Forrester Wave, and others (Episerver, Adobe, Acquia) have been adding project management functionality. But the need for better collaboration, curation and content performance analytics is becoming more clear (and making this gap in WCM more apparent).

Based on Ryan’s comments about burn rate, it seems very plausible that a number of standalone CMP vendors are ripe for acquisition by WCM vendors where this functionality will simply become table-stakes. Of course, consolidation may go elsewhere; Sprinklr (the only Leader in the CMP wave) is primarily a Social Management platform, and other CMP vendors such as Percolate have been adding Digital Asset Management (DAM) and other capabilities, so this consolidation trend could go in multiple directions.

Multi-channel becomes more important

When WCM “ruled” Customer Experience (CX), it was because web was the primary channel. While it still lays claim to a good part of any martech CX stack, it is clear that more brands are starting to pursue a multi-channel approach to marketing. This does just mean replicating the same content from web and mobile, but also ensuring a consistent voice across social and offline channels (i.e. CRM/support or enablement channels such as Showpad) where content is not created near the web channel. A CMP sitting in front of those channels and teams is key to ensuring alignment of that strategy across the organization.

Marketers will finally start to realize the power of Content Marketing for Customer Experience

According to everybody and their dog, Customer Experience is the next big battleground, and most brands have been investing heavily in technology as their silver bullet. This has gone in waves; WCM, personalization, customer journey, etc. but they are starting to come to the realization there are some diminishing returns to a primarily technology and data-driven approach. This is also combined with the fact that adtech is largely an arms race – both you and your competitors can equally throw money into the machine of Google, Facebook (and lately Amazon) so you are losing any source of differentiation of brand or strategy. This has lead to a bit of a re-think to acknowledge that you still must to have a brand and content strategy to execute successfully, but also that any outreach to customers must be far closer tied to the product than any “ephemeral” brand associations. CMP is an interesting category in that it explicitly acknowledges the role that people and strategy play up-front – but unlike other forms of martech it does not promise quick wins. Which is of course why adoption has been slow, because it takes heavy organizational effort to make that happen. But when it does happen, you get these results; buyers “love their CMPs”, and their NPS score are “really good for enterprise software”

Similarly, one thing smart marketing organizations are starting to realize is that more content is not necessarily better. They need to have clear visibility into what was created and why. Part of “governance” is ensuring that you’ve got a clear audience and demand for what you’re creating – because otherwise you are not just wasting resources, but also adding to the noise that your customers need to wade through to get what they need.

The essence of strategy is choosing what not to do. There’s a fundamental distinction between strategy and operational effectiveness. Strategy is about making choices, trade-offs; it’s about deliberately choosing to be different.

Michael Porter

Skyword, a CMP vendor, has a great article from Liz Alton, entitled: “Good Strategy Is Knowing What Not to Do: The Art of Rejecting Content Ideas” and to me, this really gives a clear example of how tightly related a CMP is to organizational behavior and how it can help focus and drive those hard content marketing decisions.

CMP will start to marry the quantitative and qualitative

Marketing has been very “data-led” lately with adtech eating attention and budgets, but good Customer Experience is much more about ensuring that qualitative concepts like “empathy” and “top-tasks” lead a CX strategy, and CMP platforms are the bridge for aligning these worlds to ensure that you have the metrics in place to proactively help set and monitor that strategy.

To conclude, there are a lot of trends in martech and customer experience, and organizations should get ready for some vendor re-alignment into the spaces you already play in (CMP pulled into WCM or other channels such as Social). But more importantly, doing the hard work around content strategy is key to drive a superior and differentiated customer experience and a proper implementation of a CMP will help to enable this. Hint: The best brands and marketing organizations already are already doing this.

So CMP vendors in a standalone category may still have struggles (the same could be argued for WCM) but the overall need is great and will play a strong role in Customer Experience one way or another in the future.

Post-script. Ryan Skinner linked to my post on LinkedIn and Shafqat Islam the co-founder and CEO of NewsCred made this comment:

In a couple months there will only be one pure play CMP vendor left standing. Everyone else will be acquired, out of business, or a zombie company. Sad truth about the category.

Shafqat Islam

Can’t say I disagree – this is one of those interesting cases where there is a need for the product – but for the issues in uptake I mention above, the standalone vendors are “struggling” (in my words). There is such a thing as being too early for the market (Apple Newton, etc.), but I stand by my statement that the need is there (and will grow) but other segments (WCM, Social) with more heft will take advantage of the functionality in CMP to fill their gaps. Ultimately this is good for marketers, but not so great for those vendors (unless acquisition was Plan A).

Returning to blogging

I ended my 8-year tenure at Sitecore last week. One of the best parts of the job was doing a lot of market analysis, hardcore strategy work and getting to regularly chat and work with some of the best implementation partners in the industry. One of the worst parts of this was the fact that the majority of what I produced was for internal audiences only. So I intend to have some fun opining publicly about the general trends I am seeing in the industry (and worked hard to get into the portfolio).

It is clear from any regular commenter in the CMS or martech industry that things are changing extremely rapidly;

Late additions:

I respect these folks a great deal, and hope to be able to keep up with the quality and regularity of their output. My first blog post will be on CMP (Content Marketing Platforms). One of my big successes at Sitecore was working on the acquisition of Stylelabs and the CMP offering we prioritized and built very quickly. It’s an interesting new space which should become more foundational within large and brand-focused organizations, and change will be fairly rapid for various reasons I will articulate.

Post-script: I think Scott Galloway is one of the most entertaining thinkers in business today (the Vox Pivot Podcast with Kara Swisher is particularly great), and he had a tweet which felt custom-made for the occasion of my departure.