Martech buyers constantly encounter terms like best-of-breed, point solutions, systems, suites, clouds, hubs, apps, superapps, platforms and ecosystems. Tasked with building an optimal stack, one has to wonder — are these just buzzwords or are there significant differences that might have implications for my buying decision?
Here’s a buyer-friendly exploration of what they mean, whether they matter, and how to put them into perspective in the context of martech investments.
A Brief History of Martech Terms
It all began with martech products — typically stand-alone software designed to meet a specific need such as CRM or email marketing.
Digital marketers, a newly minted breed themselves, often deployed a few best-of-breed point products to execute their somewhat limited and isolated digital marketing programs.
Product companies and their partners also offered varying degrees of solutions and services to help streamline workflows, drive adoption, integrate or customize software to suit legacy systems, or build bespoke software where needed. Some products also expanded into suites, offering multiple integrated products of related functionality, with a-la-carte options.
But no one could anticipate the sheer speed at which digital marketing use-cases would grow!
To meet customers aThe martech industry rose to the challenge, as chronicled in Scott Brinker’s martech landscape graphics, quickly supplying a dizzying spectrum of out-of-the-box SaaS products without the capital expense or long development cycles of yore.
Now, marketers could engage with customers in more ways. Unfortunately, they also ended up adding more silos. This caused brand experiences to fragment, and drained marketing resources with much of it spent on ad-hoc integrations that were neither sustainable nor scalable.
But the solution was not as simple as integrating products. The data was still too dirty to flow across the stack for seamless CX.
This spurred the idea of a data hub with a single source of truth to orchestrate personalized, seamless CX across channels and devices. Products such as CRMs and CDPs stepped up to become those data foundations or hubs, but martech buyers still had the task of choosing multiple additional products to layer around the hub. And they often found post-deployment — SaaS or otherwise, that integration had failed.
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Enter Platforms and Ecosystems
The World Economic Forum (WEF) defines platforms as “technology-enabled business models that create value by facilitating exchanges and interactions.” As Brinker, who also serves as VP of platform ecosystem at HubSpot, tells me, “Marketers want the ability to choose specialized apps for specific purposes, but also want the data, workflow and experience side of things to converge into a common, stable foundation. The best of both worlds. This forms the crux of the platform strategy.”
In a martech platform, the core technology (such as CRM or CDP) anchors the data hub and provides a stable foundation for the surrounding ecosystem of (third-party) products and apps, which then cater to all existing and emerging marketing needs (not all of which the core technology product or suite can fulfill).
“Pretty much all the major public companies in this space — Adobe, Oracle, Salesforce, Microsoft Dynamics and Hubspot — all have suites of multiple products and integrated capabilities,” Brinker says. “But these are no longer the closed suites of 10 years ago. Now, we also have open APIs and marketplaces so an ecosystem of products, apps and solutions can plug in to help meet our customer’s diverse and expanding use-cases.”
Yiannos Theodoridis, enterprise agility lead for Ireland at Accenture, describes the “platform business model” as one which aims to develop positive network effects, increase product stickiness and increase switching costs.
In short, platforms are solving marketing’s ‘”Frankenstack” problem and also creating new value and convenience for martech buyers. They not only offer a more manageable, vetted universe of products, services and apps to choose from; but also one where integration, data flow and expansion in response to new market needs are relatively safe bets for the buyer.
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Dynamic Universe of Product and Services
An ecosystem in this context is best understood from the perspective of the group whose needs it serves. As CX becomes more central to brand strategy, an ever expanding martech ecosystem is serving categories spanning ecommerce to CMS, video to sales enablement, customer service to analytics, lead gen to social media and many more.
While this entire ecosystem may or may not operate around a specific platform or marketplace, it is essentially the dynamic universe of products and services that can potentially integrate with a given platform. When platforms do enable access to a diverse ecosystem, we’re likely seeing a platform ecosystem in action.
Note: it’s easy to confuse a martech platform with a marketplace. In my view, a platform vets and anchors the ecosystem around its foundational technology, but does not get involved directly in deals between customers and vendors. A marketplace, on the other hand, facilitates the ecosystem of buyers and sellers with the primary purpose of playing a direct role in the transaction.
Do the Terms Impact Martech Purchase Decisions?
To an extent, yes. But because so many brands use these terms interchangeably, what really matters is finding the right solution to address business challenges and needs.
“Solutions are more outcome driven, and encompass more than the technology — they include elements of strategy, services, training and on-going support. Technology is one part of the equation,” Brinker says. “The larger questions are how do I use the technology to meet business objectives? Do I have the talent and skill sets to use it? How do I map it into my business ops and strategy?” Finding the right solution, he adds, also means better leveraging consultants, agencies, partners and other players that don’t make the technology, but help choose and use the technology better.
Still, technology lies at the core of that solution. So buyers need to consider the cost-benefit ratio for quick capability ramp-ups; and the convenience of smoother and faster product selection and integration from a huge universe of vendors.
Platforms offer both conveniences, but not all platforms are created equal. Buyers will seek platforms that offer a more seamless and friction-free experience than others.
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Consider Stability, Flexibility, Openness of Martech Platforms
When choosing between platforms, buyers need to ask if they are investing in one that is stable, flexible, open and popular enough so that when new requirements arise, they can use the same platform and not have to swap or add complexity.
Martech buyers should consider the organization and structure of the ecosystem around the platform, and the quality and quantity of credible vendors in the ecosystem that can integrate for seamless data and process flows.
Ultimately, platforms will compete on the overall network advantages they are able to create, while also regularly pruning to keep the ecosystem relevant and manageable.
Buyers will also seek additional value in the form of stronger customer success, facilitating partner selection, and a clear path for growth in response to future market needs and disruptions. For example, Hubspot’s app ecosystem offers ratings and reviews and a certification process to make it easier for customers to choose the right apps for them.
So, What Do Martech Buyers Really Want?
Ultimately, platforms offer the compounded power of a group of complementary firms competing against another group of complementary firms. This is how platform ecosystems offer value which is greater than the sum of its parts.
As marketing and business functions in general become more connected around the CX, buyers want to choose the right platform to build their stack around to meet current needs; as well as be able to scale up easily for use-cases that cannot even be predicted today.
And that is why, in an ideal world, martech buyers would seek the right platform that integrates with a relevant yet manageable ecosystem of products and services, all of which together offer optimal solutions to current and emerging business problems.