In September, Salesforce Ventures, the venture of arm of Salesforce, announced a hefty $300 million investment in Automattic, the company behind WordPress, the ubiquitous content management system (CMS). At the same time, the company was putting the finishing touches on Salesforce CMS, an in-house project it released last week.
The question is, why did it choose to do both?
One reason could be that WordPress isn’t just well-liked; it’s also the world’s most popular content management system, running 34 percent of the world’s 10 billion websites — including this one — according to the company. With Automattic valued at $3 billion, that gives Salesforce Ventures a 10 percent stake.
Given the substantial investment, you wouldn’t have been irrational to at least consider the idea that Salesforce may have had its eye on this company as an acquisition target. In fact, at the time of the funding, Automattic CEO Matt Mullenweg told TechCrunch’s Romain Dillet that there could be some partnerships and integrations with Salesforce in the future.
Now we have a Salesforce CMS, and a potential partnership with one of the world’s largest web content management (WCM) tools, and it’s possible that the two aren’t necessarily mutually exclusive.
Automattic raises $300 million at $3 billion valuation from Salesforce Ventures
As Brent Leary, owner of CRM Essentials, pointed out, this isn’t just about building a CMS in a vacuum; having an internal solution is an essential piece of the customer experience package the enterprise giant needs to be offering today. “Salesforce CMS fills a hole in the content-to-commerce continuum that is part of the customer journey platform creation taking place among the big [players in this space],” Leary told TechCrunch.
Adobe has been able to fill this need by building a bridge between its creative and enterprise products, but Salesforce needed a response, he said.
“Adobe has put together a toolset that integrates Creative Cloud with Experience Cloud that brings the creatives together with the business folks in a way that removes some of the friction from the whole experience creation, conversion and analysis process,” explained Leary. He says that is hard to replicate, but it’s something Salesforce must do to compete.
And perhaps having that internal CMS along with a partnership an external vendor partner gives the company the best of both worlds. It has a more complete Salesforce offering that includes a full-service CMS, and it has ties to the most popular CMS in the world in Automattic for customers who prefer to use that option in conjunction with other tools on the Salesforce platform.
The company has already made two substantial investments this year, buying Tableau for $15.7 billion and ClickSoftware for $1.35 billion. Leary wondered if perhaps a $300 million investment was better than writing another multi-billion check.
Tony Byrne, founder and principal analyst at independent firm Real Story Group, has been watching this space for 20 years and says the differences between the two products might have spurred the investment. “WordPress itself has become an omnibus website management platform, albeit one with known shortcomings that do limit its breadth of penetration within larger enterprises,” he said. “Salesforce CMS appears to be an attempt to retrofit some content management services into some existing Salesforce environments. Narrower in scope and reach.”
It’s important to understand this is about the web side of content management, as opposed to enterprise content management (ECM). Web content management is probably a misnomer, because it refers to something much broader than just the web that reaches across multiple channels and refers to building and managing a company’s customer-facing digital presence. Examples of companies producing this kind of software include SDL, Sitecore, Acquia, Automattic, and many others.
While ECM, on the other hand, is largely used to manage the large amount of content generated inside organizations, such as records management, tracking workflow and business processes and storing digital assets. Traditionally, companies like Microsoft, IBM, OpenText and Alfresco have been in this space, while Box has spent the last 10 years pushing enterprise content management to the cloud.
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