Wow! Earlier today Salesforce.com announced it was buying ExactTarget (which includes Pardot) for $2.5 billion in cash (yes, cash). This is a great acquisition for Salesforce.com as they have a strong sales and service cloud but a weak marketing cloud (Buddy Media and Radian6 are social media marketing but not core marketing). Way back in 2009, I was pitching VCs to invest in Pardot (we didn’t raise money) and one of the most common questions was “What’s the exit strategy for Pardot?” My immediate response was that Salesforce.com was the most logical acquirer and that every CRM customer should also be a marketing automation customer. Well, the idea will finally come true.
Here are a few thoughts on Salesforce.com acquiring ExactTarget/Pardot:
- ExactTarget has an amazing culture (called “Orange”) with strong mid-western values whereas as Salesforce.com is typical Silicon Valley
- Email marketing has been the #1 most requested feature for Salesforce.com on their idea exchange for as long as I can remember (ExactTarget is more for the mid-market and enterprise, but will finally allow Salesforce.com to check off that feature)
- Marketing automation vendors like Marketo and others have real challenges ahead of them since over 80% of their customers use Salesforce.com (Salesforce.com will keep integrating with all the marketing automation vendors but now Pardot becomes the default standard)
- Cloud marketing software as a fast-growing opportunity has really been validated lately with all the large acquisitions
- Pardot has an opportunity to be a billion dollar a year business for Salesforce.com within 5 – 7 years due to how complimentary it is to their core sales offering
Overall, it’s been amazing to be part of the marketing automation industry and I’m excited that Pardot ended up with the cloud leader.
What else? What are some other thoughts on Salesforce.com acquiring ExactTarget/Pardot?
David Cummings on Startups 
Congrats to all of you at Pardot/ExactTarget. Exciting times ahead!
Congrats to the Pardot/ExactTarget teams. Exciting times ahead!
David, congrats! That’s like second exit for you within last year.
What do you think happens to Hubspot given that SFDC invested in them but now will be competing with them with Pardot’s marketing automation platform? Unlike InfusionSoft which targets VSBs, Hubspot also operates mid-market as Pardot so definitely it will be interesting to watch.
Where does that leave Marketo? Is Marketo more likely to be acquired by Oracle given their unprofitable history?
Customer information is central to the ability of any email marketer, marketing automation provider or lead nurturing company so it was only a matter of time before Salesforce bought someone to fill the gap. Oracle bought Eloqua, IBM owns Unica and now Salesforce has ExactTarget with Pardot. It’s a natural and as data centers fill up with “big data” it will all be leveraged by digital marketing platforms like ExactTarget.
Hi David,
What else do you see in your crystal ball? Just kidding – glad the market proved you right!
Do you foresee more acquisitions, acquihires, or other market consolidations? If so, do you see this trend from fragmentation to aggregation a challenge for Kevy’s business model?
David, that’s incredible and makes a ton of sense. Thanks for breaking it down for us.