Real Story on MarTech: Does this vendor look like a zombie?

In the wake of the first dot-com bubble bursting twenty years ago, Forbes published an excellent piece called “The Undead.” It profiled some struggling enterprise software vendors sitting on large piles of cash because they IPO’d at pumped-up valuations just before the 2001 crash. Most of them did end up burning through the rest of…

In the aftermath of the dot-com bubble burst twenty years ago, Forbes published an excellent article called “The Undead .”. It featured struggling software vendors who had large cash piles because they IPO’d at high valuations just before the 2001 collapse. While most of them ended up spending the rest of the cash and were eventually sold, some did not leave the market for long.

A new generation of zombies

I won’t opine here about whether we’re living through another tech bubble, but as a marketing technology evaluation firm, at Real Story Group, we do see quite a few “zombie” vendors: not quite dead, but not fully alive either. You’ll need to be vigilant for potential zombies in your portfolio as a martech leader and tech customer.

Two decades later, things have changed. There is a new generation in undead vendors and tools. This is not because they are rich with IPO cash but because they have accumulated enough money to sustain themselves on profitable maintenance streams. They often support legacy systems in environments that customers can’t switch out, while keeping R&D low. Cloud-based delivery models can help younger zombies as they are able to more easily reduce their expenses relative the revenues.

This is an important consideration as major industry analysts often lag in vendor assessments and can give an impression of vitality to a declining player. Take the example of Interwoven’s content management suite – one of Forbes’s “undead”. Forrester and Gartner were proud of the company for more than a decade even though licensees struggled under mountains of technical debt HTML1. The majority of Interwoven’s portfolio is still at OpenText. This is its fourth home in ten years.

Senior living options

OpenText itself is a kind of multi-tiered senior community for aging software platforms. It purchases older solutions, sets them up with independent apartments, then transitions them through assisted living, hospice care, and on to what the tech community quaintly calls “sunsetting.”

OpenText is not alone. Verint and Upland, both in the marketing technology/customer experience sector, have also taken to this business model. These roll-up vendors typically have one or two platforms at home, but they mainly buy older toolsets cheaply, bundle them together into “solution packages”, limit future development to bugs fixes, and centralize back office functions.

This model is great for investors and, in certain cases, you as the licensee. Every community that is successful must deal with its aging members. It is important to understand that, despite the claims of sales representatives, their platform will not innovate significantly and will struggle to integrate with other parts of your stack. You will receive very good support.

Other models

Some zombies carry on solo. The former IBM marketing technology portfolio is now trying to survive at Acoustic or HCL. Sitecore’s flagship web content management system “Experience Platform”, , has been given a three year prognosis . These platforms are ones you can leave and not license again.

Meanwhile, some open source projects subsist on an “age-in-place” strategy, where their communities keep them alive, albeit not very active in the world.

And what about the younger zombies? These zombies are out there, often with structural issues hidden behind venture-funded coffers. Tell-tale signs include declining volumes of ne

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