Honey, My Software Vendor Was Acquired. Now What?

October 2, 2019
Erika Wilmers

The martech tool landscape is no stranger to mergers and acquisitions. C2 Business Development Manager, Erika Wilmers, explains what options are available to organizations when a software vendor in its technology stack is acquired.

Content Management
Digital Marketing

The digital marketing landscape is no stranger to mergers and acquisitions. In the last year we’ve observed Insight Venture Partners acquire Episerver, Adobe pick up Magento, Sitecore absorb its implementation partner, Hedgehog … the list goes on. According to Deloitte’s 2019 Merger and Acquisitions Trends study, 79% of corporate respondents expect the number of deals they close in the next 12 months to increase.

What does it mean to you?

Chances are, something you use will be acquired, and it will be disruptive. As teams watch pieces of their technology stack get acquired, it’s important to understand that there isn’t always a ready-made path for what might be coming next. Whether it be sitting pat, staying in the product family, or moving away entirely, organizations should take these acquisitions as an opportunity to reassess how a given tool or platform is supporting the business and its digital strategy.

With now up to 7,040 tools making up the martech landscape, and the number of acquisitions expected to increase, here’s what to consider in the event a software vendor is acquired.

Stay and sustain

Take the time to read up and understand what an acquisition might mean to your team. You’ll likely be able to continue working with your tool or platform for the near term. As you build an understanding, know that you can still do great work by fully leveraging and optimizing what you currently own. A great example we like to cite is the work done by our partners at the City of Gresham (Oregon) on Ektron. It’s been more than four years since Episerver acquired Ektron, and the Gresham team continues to provide an award-winning experience for its users by incremental improvements and enhancements to its solution.

In an acquisition situation, the acquiring vendor is typically making a move to enhance its existing offering. They’ll often fold the best of what they’ve acquired into what they already own. That means the acquired software will (eventually) stop receiving critical support or updates, so this limbo state won’t work forever. Organizations should be proactive here. Discuss product roadmaps and support options with your vendors and technology partners.

Follow the product

Some organizations will be enthusiastic about an acquisition and may even be early adopters of whatever comes next. Teams that choose to follow the products they love may benefit from new capabilities or sought-after feature enhancements. This may be just the news you were hoping for.

It’s not always as good as advertised, though. Take Magento, for example. The upgrade path from Magento 1 to Magento 2 was already difficult and wrought with risk. While Magento 2 promises significant improvements to functionality and versatility, fundamental differences in architecture between these versions makes what feels like an “upgrade” actually more of a redevelopment effort. Add that Adobe acquired Magento not long after the release of Magento 2, and this further complicates matters, especially if you just launched on Magento 2.

Set up Google Alerts around the vendors and platforms involved. As news breaks that’s relevant to you, this ensures you’ll stay informed. Consult account reps as well as third-party experts to understand the ins and outs of keeping it in the family and what you can expect (especially if your loyalty and investment can be leveraged down the line).

Move to a new solution

It’s as good a time as any to reevaluate how a given tool or platform is supporting your overall business goals and digital strategy. How have your or you users’ needs changed since initial purchase or implementation? What new challenges or business problems might the solution have introduced? Does it still meet your team’s needs? This will inform your proposal for support and funding of a new solution.

The caution here is that moving to a new solution can be a significant undertaking. Be ready to commit yourself to the full effort. Begin to gather and shape requirements from stakeholders, consult analyst or industry reviews, and solicit demos and sandbox environments from potential vendors. Use this to shape a shortlist and focus the selection effort.

Chances are, a tool you use will likely be acquired by a bigger, faster, stronger organization at some point, if it hasn’t already. Before making a rushed decision, complete the due diligence of understanding where you are, where you need to be, and whether what you own supports that vision. It won’t be long until the marketing begins flying, trying to get you to move one way or another. Remember: You have the time, and options, to consider what comes next.