A brazen acquisition?
I had another topic I was itching to write about this week — a remarkable undergraduate program in marketing technology at RMIT University in Melbourne. But I’ll have to tackle that another time. Because this week, all martech narrative was hijacked by Salesforce announcing a deal to acquire Braze.
First, congratulations to Braze. They built an excellent platform and, more so, an excellent brand. As a financial win for them and their shareholders, it’s well-deserved.
Second, congratulations to Salesforce. I think this is a smart move for them. Among other things, they absorb a major competitor to Marketing Cloud. Textbook consolidation.
Of course, not everyone is happy about this. Some customers who chose Braze to a certain degree because of its non-Salesforce-ness are already sharpening their RFPs. There are some deep feels there. Let it not be said that martech platforms can’t be an emotional purchase.
That sentiment is in no small part why competitors of Braze — GrowthLoop, MoEngage, Zeta Global, Bloomreach, Airship, et al. — are now enthusiastically emphasizing their independence (i.e., their non-Salesforce-ness). For an industry that often pines for consolidation, it’s fascinating to see such independence now being prominently waved as a selling point.
(Late-breaking news: Hightouch just announced that delivery capabilities — email, SMS, push, in-app messaging, WhatsApp — are now natively available in their product. So one more option on the engagement platform table. And a remarkably well-timed launch.)
The Upside of Consolidation
Ever since I published the first marketing technology landscape in 2011, with a mere ~150 products at the time, there have been calls for consolidation. As the landscape grew, so did the volume of those predictions. I say “predictions,” but many of them were really just expressions of desire — what people wanted the market to look like.
There were legitimate reasons for this desire:
With such a large number of solutions — currently over 15,000 — it was hard for people to know which ones to even evaluate, much less choose. The paradox of choice is a real psychological burden, and in the context of making important business decisions can be quite stressful. I advised businesses to take a “satisficing” approach to the problem, but that was only a band-aid.
The risk that a vendor you picked and became dependent on would exit — be acquired or simply go out of business — was high. Then what would you do? Of course, that’s a risk in a more consolidated market too. But the risk was greater with so many vendors competing in the same category (see: CDPs). And make no mistake, there have been thousands of those martech exits over the past 15 years. The landscape only grew because new entrants arrived at a faster rate than the exits, at least so far. But these have been very choppy waters.
A fragmented technology landscape created a fragmented talent landscape. Everyone from marketing ops to CMOs had their subset of preferred tools. It was not unusual for a new CMO to arrive and swap out chunks of the martech stack to what they knew. But the net benefit to the company of such swaps was often dubious. Did it really change the capability set enough to justify the time and expense of that churn?
And then there was integration. The suite vs. best-of-breed debate has largely been moot for more than a decade — essentially every business at scale has had a heterogeneous stack. It’s just been a matter of degree. But the n2 complexity of integration across these tools sucked. Platform ecosystems helped, but they didn’t cover everything, and what they did cover often had limited functionality. People longed for a world where things just worked together. Consolidation was seen as the salvation to deliver that.
Oh, and vendors, especially startups, also clamored for consolidation — a bit ironic, when you think about it — because they aspired to become the king of the hill, with everything consolidated under their reign, or because they aspired to be acquired for a fat sum of money. (Many aimed for the latter.)
So, yes, consolidation can have real upside — if it addresses those pain points and doesn’t introduce new ones.
The Upside-Down of Consolidation
But there’s another side to consolidation for buyers.
I’d often caution enthusiastic advocates of consolidation to be careful what they wish for. Because a consolidated market tends to shift power away from buyers and to sellers. When you have fewer choices, well, you have less choice. And less choice can quickly become less leverage.
Over the years, I’ve had more than a few marketing executives tell me: “We’d rather buy it all from one vendor so we have one throat to choke.”
And I’d reply: “Once you’re thoroughly captured by one vendor, are you sure you’ll be the one doing the choking?" (Too soon for those of you who just went through an unexpected price ratcheting at your renewal?)
Aside from changes to price and licensing terms, the other risk customers face with a highly consolidated stack —perhaps we should say a highly concentrated stack, in the language of an investment portfolio — is less control over their roadmap. Their martech capability roadmap becomes more tethered to their vendor’s product roadmap. That’s great when they align. Not so great when they don’t. And especially in today’s uncertain environment, either one can take a turn quite suddenly.
Now, to be sure, there can be a tremendous amount of consolidation in the martech landscape and people will still have plenty of choice, simply by the numbers. If 90% of the landscape vanished, there would still be over 1,000 solutions in the space.
But the Braze-Salesforce deal is instructive in that consolidation doesn’t just mean a bunch of small players go away. It often means some of the major ones — the ones you might have thought were safe from being consolidated — can get swept into the belly of a whale.
However, I’m optimistic that other structural changes in the industry can help balance the buyer-seller power dynamic, even as such consolidation occurs.
Consolidated Infrastructure Could Be Different
I’ve been saying all year that the martech industry is shifting from apps to infrastructure.
Instead of a stack of apps, each with their own UI and workflow, each serving some specific — and often narrow — set of use cases, we’re moving towards architectures of a smaller number of foundational systems, upon which more custom apps and agents are created, tailored to each business.
Data clouds such as Databricks and Snowflake are quintessential examples of such infrastructure that serve as a universal data plane foundation. So are the AI platforms from Anthropic, OpenAI, and Microsoft, which increasingly serve as a universal “work” layer where users default to finding answers and taking actions.
But there are other business execution and orchestration capabilities we need between those two layers.
Salesforce is actually a great example of that business orchestration kind of infrastructure — including what I’ve been calling context-as-a-service. It’s where functionality for decisioning logic, campaign scaffolding, and marketing governance lives. Braze can expand these capabilities for them, especially with mobile channels and real-time activation.
Salesforce’s move to go “headless” earlier this year — to make all of that functionality reachable through APIs and MCP — is a very infrastructure-y move. You can leverage their underlying business services with your own bespoke apps and agents. Claudeforce strikes me as a kind of reference implementation of what that can look like.
Now, when it comes to consolidation and choice, I believe two things will be true in this infrastructure era of martech.
First, for better and worse, it will drive a lot more consolidation in the martech landscape. Because infrastructure by its nature is more horizontal and general-purpose, there are fewer dimensions by which competitors can differentiate. And from a customer’s perspective, a smaller number of foundational systems are easier to leverage across their business, cover more use cases (including cross-org ones that were previously quite challenging), and achieve economies of scale in pricing and usage.
Now, I expect there will still be vibrant competition in martech infrastructure (see the table below). Lots of very different companies jockeying for position in the new infrastructure stack. Non-infrastructure martech apps are the ones more likely to be displaced, primarily by custom apps and agents, built with AI on top of that infrastructure.
But second, I believe these infrastructure solutions will be pulled to be much more open than the “suite” incarnations of consolidation platforms that preceded them.
Why? Because it’s the nature of infrastructure. To fully harness the power of AI to craft tailored apps, agents, and automations across marketing operations and customer experiences, you need open access to the underlying data and services.
Infrastructure is defined by what gets built — what can get built — on top of it.
Now, I’m sure there will be infrastructure vendors who will creatively strive to make their “openness” as closed and locked-in as possible. But this will be a dimension on which infrastructure companies will compete.
We’ve already witnessed this with how quickly MCP interfaces have been added to martech platforms over the past year. Over 2,000 products on the martech landscape now promote MCP access to their data or functionality. (The chart below, showing relative API and MCP strength across different categories, is from a bonus research brief Frans Riemersma and I produced. You can get it for free today by registering for our upcoming Martech for 2027 report.)
From the bonus “How open is the martech stack?” research brief available for free when you register for our Martech for 2027 report launch event.
The thing is: I know for a fact that a number of those martech platforms were extremely reluctant to implement MCP, because they feared losing control over their user’s interface and workflow with such openness. (And it turned out that fear was well founded.)
But their hand was forced by the incredible value customers saw MCP-powered AI agents and assistants could give them. This sparked overwhelming demand for that functionality. Once one or two competitors implemented it to meet that demand, any other vendor in their category who wanted to stay on top of the AI wave couldn’t afford to be left behind.
Now that companies have tasted sweet freedom, building their own tailored apps and agents on more open data and services foundations, I think it will be hard for vendors to put those horses back in the barn.
The real test of this thesis will be what Salesforce does with Braze after the acquisition — and the degree to which customers go along.
Keep your options open,
Scott
P.S. The time is drawing near! Don’t miss the opportunity to get an early copy of the Martech for 2027 report, along with several exclusive research bonus items that we’re sharing with registrants for our launch event on December 1. Reserve your spot and pick up those bonus items today.
