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IBM buys Unica, gets into marketing automation

Big Blue is digging deeper into the CRM market with the acquisition of Unica for $480 million, building on its Coremetrics and Sterling Commerce deals.

IBM said today it will buy marketing management software maker Unica Corp. for approximately $480 million.

The figure represents a price of $21 per share for the Waltham, Mass.-based marketing software company. The deal is subject to Unica shareholder approval and is expected to close in the fourth quarter of 2010.

Unica's 500 employees will be integrated into IBM's Software Solutions Group, a unit that has grown considerably in recent months in the wake of IBM's acquisition of Coremetrics for website analytics and its purchase of Sterling Commerce for cloud-based BPM and its earlier deal for business intelligence capabilities from Cognos and predictive analytics capabilities from SPSS.

Given IBM's recent acquisition history, today's news was no surprise to people who cover the market.

"It was not all that shocking or surprising," said Kim Collins, managing vice president and CRM agenda manager for Stamford, Conn.-based Gartner Inc. "At the time IBM bought SPSS, we debated whether it was a tactical move to get more analytics capabilities or would they get into the applications space. They've avoided it for years."

"It didn’t come completely as a surprise given the number of acquisitions IBM has been making," agreed Suresh Vittal, marketing software analyst with Cambridge, Mass.-based Forrester Research. "It is a big one. Certainly it is their first pure marketing apps acquisition."

Indeed, IBM's earlier acquisitions focused on data integration, analytics and business intelligence where Unica provides a full marketing application platform.

According to the press release announcing the acquisition, IBM will combine Unica's technology with its own to help customers create consistent and relevant cross-channel brand experience to promote customer loyalty and satisfaction.

"IBM understands the demands on today's organizations to transform core business processes in functions such as marketing with intelligence and automation," Craig Hayman, general manager, IBM Industry Solutions, said in a statement. "Unica was a clear choice for IBM based on its power to automate a broad set of marketing capabilities and its established reputation for delivering customer success in marketing to organizations around the world."  

However, marketing software buyers might want to approach Big Blue with caution, thanks in part to some functional redundancy across IBM's acquisitions. For example, Unica has its own web analytics business that competes with Coremetrics and there are recommendation engines available from Unica, Coremetrics and SPSS.

"As a marketing buyer, you should be asking the question, what does this mean to product strategy," Vittal said. "What will my marketing suite look like a year from now, two years from now? Overall it's great for the marketing software space but as an individual buyer, ask yourself, what are the implications on data integration, complexity of use."

IBM has traditionally had a much greater relationship with IT than with those in marketing or the business side, Vittal added. He expects Unica to be sold an operated much as it is today.


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