Eloqua’s IPO Filing Stirs Dialogue Among Analysts, Competitors On Industry Impact
- Written by Demand Gen Report Team
- Published in Feature Articles
The recent news of Eloqua’s IPO filing brought renewed attention to the marketing automation and revenue performance management. The majority of competitors and industry analysts applauded the move as a milestone event for the category. At the same time, the revealing look inside Eloqua’s business and financial performance, drew industry commentary from competitors.
Experts suggested the move further validates the growing impact of automation solutions, and overall vendor positioning. "Eloqua's recent IPO filing highlights not only the continual growth the marketing automation market is experiencing, but also the commitment of vendors to expand the functionality and services offered,” said Jonathan Block, VP and Service Director of Reputation Management Strategies advisory services at SiriusDecisions, Inc. “The IPO also hopefully signals a new era of greater financial reporting transparency, which can only benefit customers through their due diligence in choosing a marketing automation vendor."
Competitive vendors also agreed that the prospect of having a publicly backed company in marketing automation could raise the bar on spending and investments. "This is one more indication that the marketing technology market — and specifically marketing automation — remains intensely competitive,” said Lisa Arthur, CMO of Aprimo. “It's also an indication that marketing automation companies continually demand financial resources to strengthen their respective positioning in the market.”
“A public Eloqua would have additional financial resources available if it wants to spend them internally or on acquisitions,” said David Raab, Principal of Raab Associates. “A public company also has an easier time selling to large enterprises that like the transparency and stability of public vendors.” Raab added that this will strengthen Eloqua’s competitive positioning, but could also potentially deter some investment in smaller competitors, but not in those that are already well established.
Transparency Changes The Game
Eloqua’s filing provided the first public view into the financial performance of a marketing automation vendor, which drew a mix of commentary from analysts and competitors. “Revenue increased roughly $10 million per year from 2006 through 2010, which is nothing to sneeze at although the higher base meant the percentage rate slumped significantly in 2009 and 2010, to about 25%,” Raab noted additional financial implications of Eloqua on his Customer Experience Matrix Blog. “Year to date in 2011, growth is back up to nearly 40%, which would translate to $70 million for full year 2011 if maintained.”
The glimpse into Eloqua’s financial data also gave competitors the opportunity to offer their commentary on what the filing means to current and future market dynamics. “The filing bodes well for all the players in the market in that it puts an important spotlight on the exciting growth of the Revenue Performance Management (RPM) market,” said Lori Bush Shepard, VP of Corporate Marketing at Marketo. “That said, we think that Eloqua’s filing also lays bare the stark leadership shift that has happened in RPM space, as for the first time we at Marketo can confidently assert that we have more customers, are adding customers and revenue at a faster rate, and are growing more than three times faster than Eloqua…It also illustrates how much larger the ‘big guys’ have become in this market versus the entry level niche players, so this can’t be good for them.”
Mike Volpe, CMO of HubSpot, added that the public filing now puts Eloqua’s performance up against other SaaS companies outside of marketing automation. “Unfortunately, compared to the top SaaS companies, Eloqua seems to be growing slower — they only grew 25% from 2009 to 2010, whereas Jive Software (which also recently filed for an IPO) grew 54% in the same time period,” he noted.
While the automation market will now be magnified, experts point out that the industry still has plenty of room for future growth and a wide competitive set.
“The market is still so nascent (only several thousand companies using marketing automation) that we are very far from any one player having an outsized impact on the competitive landscape,” noted Adam Blitzer, Co-Founder and COO of Pardot. “I think, if anything, this may help other vendors in terms of fundraising or M&A activity, given the attention it will draw to the space.”
Ian Michiels, Principal Analyst of Gleanster Research, agrees that there’s still room for maturation in the market. “I don't think this really changes the market that much; we still need to see some consolidation and natural selection (which started to happen — i.e. Marketbright, Market2Lead, etc.). I see the RPM market moving in much the same trajectory as Web Analytics did when Omniture IPO'd. There's still room for at least 1-2 short list competitors and lots of growth opportunities as companies realize they can't compete without more personalized interactions.”