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Exclusive: These Two Companies Join Forces to Take on Software Giants

Mar 13, 2017

Infor and Marketo have agreed to tie together their core products and jointly sell them to businesses looking for sales and marketing software. The goal is to compete better with software giants like Oracle and Salesforce that have spent billions over the past few years to build their own sales and marketing software lineups. Executives from both companies confirmed the news, which will be announced later Monday.

Initially the two companies will focus on integrating or tying together Infor's customer relationship management (CRM) software with Marketo's marketing automation product but integration of other products will follow, Infor CEO Charles Phillips told Fortune.

In a separate interview, Steve Lucas, CEO of Marketo, said the alliance will serve businesses well by providing a consistent way for them to interact with their customers whether it's through email or mobile app or some other channel. Marketo claims major customers including GE Healthcare, Panasonic, and Microsoft, which runs its digital marketing operations on Marketo.

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"We have a strong cloud-based CRM and product configurator product. What we didn't have was the lead maturation piece," Phillips said in an interview. For non-techies, CRM software is used by companies to interact with customers; a product configurator lets buyers specify exactly what features and services they want; and "lead maturation" software lets the seller track a would-be customer's progress through the process.

The goal of this deal is to arm both companies with a better way to do all of those things, and to compete better with the aforementioned software giants that have only gotten bigger in sales and marketing via acquisition.

For example, over the past five or so years, Salesforce (crm)bought ExactTarget for $2.5 billion. ExactTarget had already bought Pardot, a respected marketing automation specialist, so Salesforce got that too. And Salesforce, by that time had already bought Buddy Media and Radian6 to boost its ability to deal with social media marketing.

In roughly the same timeframe, Oracle snapped up Eloqua, Responsys, and Maxymiser while SAP (sap) bought Hybris; IBM (ibm) has bought Unica and Silverpop; and Adobe (adbe) bought Omniture and Neolane. You get the picture.

This frenzy was sparked by the notion that chief marketing officers and other marketing professionals at Fortune 500 companies have the budget and willingness to spend lots of money on technology to help their companies build better relationships with potential or existing buyers. And where tech budget flows, big software companies follow by snapping up smaller companies with relevant expertise—and customers.

"The market has evolved," Phillips said in something of an understatement. "There were probably 20 marketing automation companies then SAP bought hybris, Oracle bought Eloqua etc. Everyone else is scrambling to find a home before there are no chairs left."

Phillips said the CRM integration should be done in APril, in time for Marketo's sales conference where it will be discussed.

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Some history: Infor which itself has bought myriad smaller products in financial and manuacturing areans, brought Phillips, formerly president of Oracle (orcl), aboard in 2010 and since that time the company has rewritten its software and moved its data center operations to Amazon Web Services and off its own data centers. Last year, the investment arm of Koch Industries invested $2.5 billion in Infor fuel growth and combat bigger competitors. Marketo, which went public in 2011 and remained one of a dwindling handful of independent marketing software companies, was acquired by Vista Equity Partners for about $1.8 billion last year. Lucas, who'd done stints at Salesforce and SAP, joined Marketo as CEO last October.

Marketo claims some big accounts including Panasonic, Microsoft (msft), GE Healthcare (ge), and Triumph Motorcycle. Infor, which offers a wider variety of software for running financial, supply chain and manufacturing processes lists customers including Bank of America (bac), Georgia Pacific, and Mitsubishi.

Clearly this is a competitive market. The success of this—or any— alliance will depend on how well both companies execute both on the product integration and joint sales efforts. Some big customers may prefer to buy all their sales and marketing software from a single mega-vendor although, to be honest, it's unclear how well these industry megaliths actually are integrating their own acquisitions into a cohesive suite.

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