A little over a year ago I wrote a piece on the consolidation occurring in the EFM market. Just prior to the post being written QuestBack had announced the acquisition of Global Park, Germany's largest EFM player. The subject of the post was the acquisition of Vovici by Verint a large vendor of contact center solutions. The post I wrote can be found here.
Since July of last year SurveyMonkey has made two important transactions. First acquiring a 50% stake in ClickTools, a UK based EFM vendor. And, second the acquisition of the Zoomerang and Panels businesses from MarketTools.
And, yesterday, MarketTools took the additional step of selling it's remaining EFM business -CustomerSat - to ConfirmIt, of Oslo Norway. Consolidation in the EFM space is clearly continuing. I expect more to come.
So what is the rationale behind all this merger activity? I have some thoughts and opinions....
Thought #1. The EFM space is getting crowded at the top end of the market. Gartner, Forrester, Aberdeen and others have been beating the drum for Enterprise Feedback Management for a long time, at least five years by my count. Since most of the EFM vendors focus their efforts on selling to "Enterprise" class customers, as time has passed more of them have adopted solutions, leaving less growth available to the rest of the players. Hence, acquisitions of high-end products.
Thought #2. Serving the small and mid-tier customer segments normally requires that companies have either scale or distribution in order to effectively market. SurveyMonkey has scale, QuestBack has distribution (I'm a QB reseller), Vovici has partnerships (Oracle in particular) and ConfirmIt now has scale at the high end of the market.
Thought #3. Many of the smaller players in the EFM market have neither scale nor distribution. They have to rely on organic growth while competing with larger, better funded and more effectively structured companies. It is amongst this group of companies that I expect to see further consolidations. Some companies on the list: Qualtrics, Medallia, Satmetrix, Allegiance, SNAP surveys and KeySurveys. These firms serve Enterprise customers or mid-tier customers using a direct sales or assisted direct sales model. They could all use more scale, more distribution or both.
All markets undergo consolidation eventually as they mature. EFM is maturing and so is consolidating.
Stewart Nash - stew.nash2010@gmail.com
Since July of last year SurveyMonkey has made two important transactions. First acquiring a 50% stake in ClickTools, a UK based EFM vendor. And, second the acquisition of the Zoomerang and Panels businesses from MarketTools.
And, yesterday, MarketTools took the additional step of selling it's remaining EFM business -CustomerSat - to ConfirmIt, of Oslo Norway. Consolidation in the EFM space is clearly continuing. I expect more to come.
So what is the rationale behind all this merger activity? I have some thoughts and opinions....
Thought #1. The EFM space is getting crowded at the top end of the market. Gartner, Forrester, Aberdeen and others have been beating the drum for Enterprise Feedback Management for a long time, at least five years by my count. Since most of the EFM vendors focus their efforts on selling to "Enterprise" class customers, as time has passed more of them have adopted solutions, leaving less growth available to the rest of the players. Hence, acquisitions of high-end products.
Thought #2. Serving the small and mid-tier customer segments normally requires that companies have either scale or distribution in order to effectively market. SurveyMonkey has scale, QuestBack has distribution (I'm a QB reseller), Vovici has partnerships (Oracle in particular) and ConfirmIt now has scale at the high end of the market.
Thought #3. Many of the smaller players in the EFM market have neither scale nor distribution. They have to rely on organic growth while competing with larger, better funded and more effectively structured companies. It is amongst this group of companies that I expect to see further consolidations. Some companies on the list: Qualtrics, Medallia, Satmetrix, Allegiance, SNAP surveys and KeySurveys. These firms serve Enterprise customers or mid-tier customers using a direct sales or assisted direct sales model. They could all use more scale, more distribution or both.
All markets undergo consolidation eventually as they mature. EFM is maturing and so is consolidating.
Stewart Nash - stew.nash2010@gmail.com
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