The last big analytics deal of 2010 -- Teradata's late-December acquisition of Aprimo for $525 million -- may well be the prologue for 2011.
Indeed analytics have drawn increasing attention from enterprises for the last few years. And at the center of interest has been improving marketing capabilities.
Aprimo specializes in so-called integrated marketing management, a fast-growing, $5 billion business, according to industry estimates.
"Integrated" means management and analysis capabilities cut across channels -- Web sites, call centers, direct mail and, increasingly, social networks -- as well as across the full life cycle of customer interactions -- from outbound e-mail and direct mail campaigns to long-term analysis of satisfaction with product quality and support.
In Aprimo's case the capabilities are delivered software-as-a-service (SaaS) style through the vendor's Business to Consumer and Business to Business applications. Aprimo's customer base is said to include more than 150,000 individual users and 36% of the Fortune 100, with Bank of America, U.K. utility E-ON, and Warner Brothers as notable examples.
"The opportunity with Aprimo is to have a best-in-class, end-to-end marketing solution that cuts across analytics, campaign management and lots of things Teradata is doing today," said Teradata CEO Mike Koehler in a conference call.
Marketing is a frequent entry point for Teradata, Koehler noted, whether it be in telecommunications, banking or retail. Teradata's data warehousing technology helps marketing departments get a grip on their data -- the raw analytics -- but what it has lacked (outside of one-off and partner-dependent solutions) has been management and analysis capabilities akin to what Aprimo offers.
Once the acquisition is completed, as expected in the first quarter, Teradata will be able to cross-sell and up-sell Aprimo services that might have otherwise gone to competitors. In fact, the acquisition follows closely in the footsteps of IBM's August purchase of Unica. Acquired for $480 million, Unica also specializes in cross-channel campaign management and measurement software, offered both on-premises and SaaS style.
And just as IBM retained Unica's name for marketing purposes, calling it "Unica, an IBM Company," Teradata plans to continue to use the Aprimo name for the marketing services.
If the consolidation trend is to continue in integrated marketing management, which vendors are left to buy in 2011? Marketo and Eloqua come to mind. Both firms offer SaaS-based marketing capabilities and both have hundreds of customers. Oracle and SAP should take a look.
Marketo's client base is dominated by technology-focused companies, and its services are integrated and frequently paired with Salesforce.com. Eloqua's customer base is diverse, including media and sports entertainment companies such as Comcast, the TD (Boston) Garden and the Miami Heat.
"What’s driving this heightened interest and momentum in marketing automation platforms is that it is not just about marketing, but about rethinking every aspect of how corporations drive growth and improve revenue performance," said a Marketo statement regarding the Aprimo and Unica deals.
In other words, when companies use analytics to better understand their customers, the insight can change everything from product, manufacturing and supply chain strategies to distribution, retailing and customer communications approaches.
Consolidation has redrawn lines of competition within the analytics community. SAS, for instance, is a leading provider of marketing analytics software, so the recent acquisitions by long-time partners IBM and Teradata can't be sitting too well down in Cary, NC.
IBM had already crossed several lines with its purchases of Cognos, SPSS and Coremetrics. But the Aprimo deal marks Teradata's first real move into data-warehouse-independent analytic offerings.
SAS, too, crossed lines when it announced last year that it would introduce SAS-powered analytic appliances based on HP hardware -- a clear shot across the bows of Oracle, IBM and Teradata.
So the forecast for 2011 in marketing analytics -- as in most IT categories -- is for continued consolidation and stepped-up competition as the big vendors reach into each others' pockets.