During Marketo’s Q4 analyst conference call, Marketo Founder/CEO Phil Fernandez referred to increased price competition from “large suite vendors” (i.e. Oracle, later confirmed at investor conferences) as “what I would characterize as desperate price competition… we are seeing them literally give away their products to try to block us from closing deals, when we have clear user preference.” In other words – Oracle can’t win on product, so they’re giving it away to try to put Marketo out of business.
This is a nice story, except the same Gartner quadrant referenced puts Oracle’s digital marketing hub ahead of Marketo’s on both completeness of vision and ability to execute.
In the report, Oracle is lauded for a “broad scope of capabilities” that addresses “most hub use cases.” While the report does note “feature gaps” as a con (including the multitouch attribution that Marketo has), Marketo has its own weaknesses too – “some customers report dissatisfaction with Marketo’s native search engine marketing tools and the relative complexity of the product’s overall user experience.”
Oracle may be a stronger competitor (on product quality) than Marketo is giving them credit for, and Oracle could be a threat if it is willing to use price as a weapon. Oracle mints cash, while Marketo is burning it. Even if their product suite is marginally competitive, they can likely win deals on price – which could weigh on Marketo’s win rate (and consequently the all-important revenue growth) going forward.