A common theme connected the Amazon, Microsoft and Google earnings reports last quarter: major growth in cloud revenue. Amazon Web Services (AWS) brought in $5.11 billion in revenue; Microsoft Azure revenue is up 98%; and Google, while still growing in the sector, says its cloud now brings in $1 billion per quarter.
The cloud wars are gaining steam, and there’s a less talked about aspect to the battle that’s shaking things up: the new marketing stack. For example, through its recent partnership that combines Salesforce CRM with G-Suite, Google Analytics and Google Cloud Platform, it’s seems clear that Google is declaring war on Amazon Web Service’s cloud offering, specifically in the retail space. It’s been a methodical progression to become more deeply embedded in retail. With low cost hosting, integration with stack players and now Google Analytics 360, Google is making a real play at Amazon for the retail audience.
This is just one example of moves within the industry – others include Microsoft and Adobe – that signal that the new marketing stack will require a cloud preference.
Below is a look at how we’ve gotten to today’s stack and what the future holds.
The Genesis of the Closed Marketing Stack
With the rush to digital and the resulting creation of silos, many players – most notably Adobe, Oracle, Salesforce, SAP, and IBM – went on spending sprees to acquire as many “parts” as possible, cobble them together, and grab for market share. These efforts created a virtual hodgepodge of products that were vertically bound – but not vertically integrated – and became the model to get clients engaged at one layer or another and then capture their other silos one at a time. Enter the world of closed-stack marketing.
These stacks still don’t communicate up and down their pieces well, but they were introduced as the solution to marketers’ problems. It takes years and a lot of money to retrofit interfaces to make them seamless. The full stack is a difficult bargain for brands because they must:
- Accept giving over data to a company and joining a shared database of thousands or tens of thousands of others for a favourable price-point, but less than the full functionality, future flexibility and connectivity.
- Spend enormous amounts to get the “must-have” pieces inserted into that stack. That’s a lot of marketing money spent customizing the stack pieces. A real side-effect is that this typically breaks many of the add-ons and plug-ins built by the stack’s partners and integrators, which is one of the reasons people move to the stack in the first place.
Those companies that fit nicely within the model aren’t leading the pack (and don’t want to in terms of marketing). They fit fine within that stack because the trade-offs of flexibility and functionality aren’t important right now. But that leaves a whole lot of companies out there trying to figure out how to efficiently move their enterprise global marketing solution along. So where is that group of companies going?
Adobe and Salesforce have been saying they are the answer since their beginnings and, in my 22 years in the business, it’s never been accurate for large enterprise or global solutions. While they have enterprise customers, the full stack that is offered is not typically what is purchased. One, two, three products of the their stack are in there…maybe. The result is that the solution itself becomes just part of the data silo problem. There’s too much pushing data into someone else’s data structures and discomfort associated with getting it back out in a reliable, timely and identified way to effectively pair it back up with enterprise 1st party data. A large global enterprise is simply not going to put all their 1st party marketing source data in a DMP or proprietary data stack. That’s not happening.
The New Stack in the Cloud
There’s another thing going on now in the marketing domain. It’s happening in multiple areas of the cloud, but I’ll limit myself to the interesting moves recently at Google, Microsoft Azure and AWS, fully acknowledging that other cloud players like Alibaba, Tencent and others are doing their thing as well.
We have a player in the ad tech space, the biggest really and the first to build/buy and provide a package, in Google. But Google has, like AWS, an incredible infrastructure capability that is now flexing its muscle. A great thing to watch, but seemingly not really related to marketing, right? It is, in this way.
Google expands its reach, slowly at first, into the ad tech/martech marriage with Google Analytics and Premium and related products that they’ve purchased. Then, last year, the announcement of the 360 Suite, which was essentially a declaration of war on Adobe and the other “stack” players.
Meanwhile, Microsoft Azure partners with Adobe while trying to use Microsoft Dynamics 365 as the primary 1st party solution. Microsoft Azure verticalizes its market approach, going after specific verticals with knowledgeable teams ready to help, including with their partner-marketing solutions (Disclaimer: RedPoint Global is one of them.)
Google countermoves by partnering with Salesforce, another CRM solution, so we have a new, tight integration.
While Amazon is moving around a little in the space, they have tended to be largely agnostic in their cloud offering – with a “Come on in, build here.” vibe. But after a lot of hinting, they did go inverse dot.com on everyone and bought Whole Foods, after playing around with pop-ups and different kinds of bricks-and-mortar thoughts. Yikes!
In the past, retailers have had debates about whether to use Azure instead of AWS because of its Amazon retail behemoth, going right up to the boardroom level frequently before a final decision was made. But AWS still won its fair share. The scales though are tipping now it feels, away from AWS as a retailer hosting option. Retailers are really genuinely afraid of giving another dollar to AWS because of Amazon’s co-existence in their space and many are looking for a way to move to Google or Microsoft Azure or…anywhere they can get the right infrastructure and right price and performance.
Google knows an opportunity in the marketing domain when they see it. Perhaps they have been planning their move all along, but the Whole Foods acquisition just pushed it forward. They seem to be aggressively courting retailers with a combined infrastructure, Salesforce relations, and Google 360 deal that is hard to pass up price-wise and combines Google’s most popular ad tech stack parts in marketing. Both new cloud customers and existing, irritated and worried AWS customers are in their sights right now.
Google is creating a new stack and that stack includes the infrastructure – a really full stack capture. The battle for retail infrastructure AND application software is just beginning and both Google and Microsoft Azure are going after AWS.
Buck Webb is Vice President of Cloud Solutions for RedPoint Global