IBM is getting out of martech. The IT giant announced on Friday that it is offloading its remaining marketing and commerce solutions to private equity firm, Centerbridge Partners L.P, in order to focus on other strategic technologies, including AI, hybrid cloud, SaaS and, in particular, supply chain.
Just a few short years ago, IBM was a leading contender in the martech world, with a suite built on the back of Unica, but aggressive moves by companies like Adobe, Salesforce, and Oracle left it struggling in the market. In recent years it has all but disappeared from the radar.
The deal includes IBM’s remaining marketing platform and commerce software offerings, which encompasses associated leadership, talent, and technology.
Private equity companies have been more active in the marketing tech sector in recent times. Vista Equity Partners had a huge win recently buying Marketo in 2016 for $US1.8B and flipping it just two years and half years later to Adobe for $4.75B.
Marlin Equity, on the other hand, bought the marketing tech assets of Teradata for a song ($525M) at about the same time as the Marketo/Vista deal, but doesn’t seem to have had the same traction.
Centerbridge Partners will unveil a new brand for the offering once the move receives regulatory approval, according to an IBM blog post, penned by general manager, Inhi C. Suh.
Suh said the move along with last year’s ecommerce divestiture to India based HCL Technologies reflects the company’s strategy to advance martech for its customers, even if that means surrendering control.
“Both of these divestiture decisions were made with our clients’ businesses at the core of the discussions. Each set of offerings was matched with the future owners based on their strengths and the offering’s potential to succeed and flourish through their oversight and backing.
“To our clients and partners – I want to assure you that we will work closely with you, HCL and Centerbridge to ensure a smooth transition for everyone. We are confident that HCL and Centerbridge are the right providers for their respective offerings and we look forward to seeing the products’ market leadership positions continue and expand.”
The move means Big Blue can put even more focus on its now core areas of artificial intelligence (AI), hybrid cloud, SaaS, blockchain and supply chain, according to Suh, who said the latter is especially ripe for disruption from technology.
“Today the company is squarely focused on the emerging, high-value segments of the IT industry and accelerating our leadership in artificial intelligence (AI), hybrid cloud, SaaS, blockchain and supply chain, among other strategic technologies.
“In particular, our focus on supply chain – from order management to operating supply chain networks – has become a priority.”
No one ever got fired for recommending IBM
Technology consultant and founder of Real Story Group, Tony Byrne, says the news of Big Blue’s matech ejection shows big vendors do not always guarantee stability and the adage “no one ever got fired for recommending IBM” is now being questioned.
“… the very biggest vendors can actually carry the highest risks in terms of product continuity,” Byrne wrote in his blog.
“IBM, Microsoft, Oracle, Adobe, Google, and Salesforce aren’t going to fail as companies, but they will kill individual products at the drop of the hat. Remember they are constantly buying other vendors and selling off pieces of their portfolios, while their own product strategies can shift quickly, due to staff turnover, equity market shifts, or simple faddishness, to which the biggest players are equally susceptible.”
Byrne says he expects the new owners of IBM’s marketing assets will predictably promise innovation but could struggle with technical debt.
“My hunch is that the acquisition represents fundamentally a financial exercise, as the new owners play out the string with platforms that, if nothing else, can boast substantial customer lock-in and years of lucrative maintenance revenue streams. For you the customer: I’m sorry.”
A previous version of this article incorrectly named Centerbridge Partners L.P as Cambridge Partners.