With the release of the 2019 Gartner Magic Quadrant for Digital Experience Platforms, our Chief Strategy Officer Andrew Henning gives his thoughts on the report’s findings and what they mean for the industry moving forward.
Digital Experience Platforms
The Gartner Magic Quadrant series is a popular way to compare digital software and vendors. The report on Digital Experience Platforms (DXP), part of the series, is a useful resource for marketing technologists.
So, what is a DXP? In brief, it’s a software platform that influences all touchpoints between a customer and an organisation. These touchpoints could be interactions with webpages, emails, push notifications, apps, social media, adverts, call centres or other offline encounters. DXP software aims to enhance the relationship with the customer through improved relevancy and context of the proposition or content. It monitors every aspect of transaction and behaviour. It then makes real-time decisions to guide the user seamlessly along the customer journey. This hopefully results in increased revenue, improved customer advocacy, better service provision and organisational efficiency.
DXPs are evolving fast
Underlying such platforms is the ability to store all interactions using big data, and then process that information into meaningful actions via computation in the cloud. It’s a process that could benefit from machine learning / AI. And if combined with augmented reality, robotics and virtual assistants, future opportunities become even more interesting.
Yet, the above vision remains a work in progress. The Gartner report highlights that DXPs are still in their infancy and that no vendor can claim to have truly achieved this vision. The DXP market is still evolving and capitalising on these new opportunities will bring great rewards.
Who’s made it into the report?
The report contains 17 vendors, and all are established names. They all have some claim to be there, through their original product being a part of the overall DXP proposition. Each vendor now seeks to gain more of the centre ground and broader ownership of the whole lifecycle. To this end, all players are committing significant time and investment and collectively increasing the momentum in this space.
Will the giants dominate?
The main players on the list are the large Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM) companies, having enhanced their DXP offering through acquiring other companies. Each has bought digital marketing solutions that their back-office systems didn’t offer. Typically, these acquisitions have been in email marketing, journey-building automation and web page integration. Examples include Salesforce acquiring Exact Target, Oracle acquiring Eloqua and Maxymiser, SAP and its purchase of Hybris and IBM with SilverPop.
In addition, there is Microsoft, who has been transforming its Dynamics platform at pace with Portals/Adxstudio, surveys, event management and now the launch of Dynamics for Marketing.
Adobe is also present on the list, capitalising on its heritage of creative professional products and dominance in the marketing world. However, in line with the above vendors, it has also been spending big, having recently acquired Marketo. Adding this platform alongside its web publishing and CRM tools, it also hopes to find the middle ground and sit at the heart of the “Single customer view”.
Is there room for new entrants?
The dominance of the established heavyweight technology players is no coincidence. These global businesses already have a significant footprint in most client organisations. Their focus on DXP moves their products into new areas by connecting back-office to User Interface (UI) and information delivery. This is necessary for them to remain relevant and gain a purpose to exploit automation, big data, AI and the cloud. Whether they are vulnerable to emerging suppliers looking to disrupt, remains to be seen. However, some might say they have acquired any obvious candidates to-date.
Competing with the above are the smaller vendors, whose origins are based in web content management (WCM). Sitecore, Episerver, Kentico, CoreMedia, Squiz, Bloomreach (Hippo) and Acquia (based on Drupal) all feature on the list. OpenText, Crownpeak, Liferay and SDL also made the cut. They have backgrounds across digital asset management, ecommerce and WCM.
Whether these vendors can compete with the investment of the giants in areas such as AI and diverging touchpoints will be interesting to see. Maybe, like their digital marketing and email contemporaries, they too will be acquired and merged into the respective stacks of the big players.
No DXP provides all the features yet
Gartner believes most of the short and medium term spend over the next few years will be on DXP integration with other systems. This recognises that there is currently no universal product. DXP still needs to be dropped in over existing data pools, legacy systems and, most importantly, people. While businesses will consolidate as best they can around a core supplier, a reliance on existing applications will persist for the foreseeable future.
These integration barriers echo our own experience in the market. We’ve encountered hesitancy to start the DXP process because of concerns over getting it wrong. And we’ve found slow progress due to siloed solutions that aren’t connected through strategy or physical integration. Organisations must realise that digital transformation is an ongoing and broad process – and while technology is an enabler, providing true User Experience (UX) takes time, planning and stages.
So, given most organisations already have Microsoft, Oracle and Salesforce for CRM/ERP, it’s likely that these established vendors will be able to retain their existing client base. However, they may not be as successful in dislodging each other. Hence, as they evolve their products, albeit in line with each other, the opportunity for growth will be upselling the peripheral marketing services. For instance, a Salesforce user with Marketo will be eventually compelled to switch to Salesforce Marketing Cloud. However, that same user is unlikely to switch their core CRM from Salesforce to Adobe.
The transition for WCM vendors
So, with the large investment of established players, where do the traditional WCM vendors fit in for prospective buyers? They could be considered quick-wins for an organisation embarking on the DXP process, particularly for web personalisation. Quicker implementation will jump-start the learning curve, provide valuable internal experience, help strategic planning and deliver first-hand an understanding of what customers respond to. The principle threat of this approach is lost data when you wish to upgrade, but foresight can lessen the impact.
For mid-size organisations, solutions such as Sitecore, Episerver and Kentico may be suitable and offer a cost-effective package. This is particularly true if the organisation’s focus is website and/or commerce delivery. Also, acknowledging that the WCM-derived DXP packages have weaknesses in some areas may make their introduction easier.
Companies can consider swapping out functions and being more flexible in introducing best-of-breed alternatives when needed. For example, to integrate WCM with email marketing, additional budget and scoping beyond Out of the Box connectors is required. The focus should be on the results, not on procuring the one perfect vendor software in such an emerging space.
Another consideration is that the previous WCM vendors were successful and therefore are best-of-breed in this area compared to the likes of Microsoft and IBM. They know this in their own boardrooms, and will act to ensure they still have a role to play in the future. Maybe the strategic alliance between Salesforce and Sitecore is a precursor to this. Is their future to slot into the emerging stack rather than become one?
Finally, the report emphasises the importance of system integrators, agencies and channel partners to design, build and implement an organisation’s digital experience strategy. It’s unlikely that successful deployment will come from in-house teams, who already have a backlog of tasks and a shortage of skills. Instead, it is agencies and consultancies that can provide the drive and direction to align technology with an understanding of the customer needs and expectations.
The Gartner report is released under licence. To find a copy via a vendor, search “Gartner Magic Quadrant for Digital Experience Platforms 2019”.