Teradata's eCircle Acquisition: Portfolio Or Platform Play?

Today Teradata announced plans to acquire of Munich-based eCircle, a digital and email marketing provider. With the acquisition, Teradata continues two trends:

  1. Extending core offerings through marketing technology. eCircle joins Teradata’s two prior investments in marketing technology: Aprimo Marketing Studio (AMS) and Aprimo Relationship Manager (ARM), which were separately acquired in previous years. Teradata confirmed that it will position the eCircle product within its standalone Aprimo division.
  2. Complementing data warehousing with big data analytics. Through the acquisition of Aster Data, Teradata moved to beef up its presence in analytics for large-scale data sets, such as log files, clickstream, and sensor data. eCircle’s platform is built on a similar (Hadoop-based) platform, allowing marketers to co-mingle and analyze customer records, campaign data, online behavioral interactions, and more.

Did Teradata Make A Wise Acquisition?

Both companies gain from the deal. Teradata is the bigger winner, since eCircle fills gaps in the AMS and ARM products: proven email service, integrated digital and social messaging, native software-as-a-service (SaaS) delivery, and a strong presence in Europe. eCircle gains wider access to North America, marketing resource management (MRM) capabilities, and direct access to Teradata and Aster Data’s engineering talent.

Will The Acquisition Benefit CI Pros And Marketers?

Customer intelligence professionals and marketers alike will benefit, but the measure of benefit depends on whether Teradata matches its big budget with a bold strategy. The move could shake up the marketing technology scene or provide another repeat of the acquisition story we’ve seen from players like Adobe, IBM, and Oracle. The outcome hinges on the integration approach Teradata ultimately takes with eCircle:

Scenario No. 1: Teradata treats eCircle as a defensive portfolio play.

In this scenario, Teradata brings eCircle into Aprimo, but other than modest integrations, treats it as a SaaS-focused addition to its portfolio of campaign management applications. Teradata can contend that it understands digital and SaaS, but this approach ultimately continues the status quo of a fractured marketing technology landscape: one toolbox for interactive marketers, another for traditional direct marketers, and a slowly evolving set of tools for CI pros to map between the two. So CI pros benefit, but the gain is modest.

Scenario No. 2: Teradata uses eCircle to make a bold platform play.

Teradata uses the eCircle acquisition to take an offensive stance, launching a unified platform that focuses on customer interactions and decision management — not channels or campaigns — as the future of marketing technology. A platform move requires Teradata to blend capabilities from its acquisitions — digital messaging from eCircle, big data analytics from Aster Data, MRM and interaction management from Aprimo — into a single application, rather than as a loosely related set of products. CI pros and marketers stand to win big from a unified platform: easier access to digital channels, deep analytical strength, and a much-simplified application environment.

The Portfolio Play Is Safer But Not Enough

Teradata has the opportunity to break from the portfolio strategies of Adobe, IBM, and Oracle, but I expect the company to follow. With the Aprimo acquisition, the company chose to retain the ARM and AMS product lines rather than unifying on a single code base. A platform move also requires perseverance: Today, demand for a unified platform comes more, though not exclusively, from the mid-market than from large enterprises. Teradata would likely have to provide financial support for the platform until enough interest grows from large customers.

Even if a portfolio approach is safer, market conditions may force Teradata’s hand. The move would help counter the incursion from interactive campaign specialists, like ExactTarget, Neolane, and Responsys, that focus on ease-of-use and digital execution. And it could fend off pressure from established players, like IBM, Oracle, and SAS, that use large portfolios and enterprise licensing agreements to push into the marketing department.

Teradata has a good hand, but not yet a winning hand. Will it shoot the moon?

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