Martech is consolidating, but what will the 2022 landscape reveal?

You may possibly by now be leaping to a conclusion. “It appears to be like each and every other 7 days, I browse about a major acquisition. Certainly the 2020 martech landscape with its 8,000 solutions was Peak Martech! The only problem is by how much has the 2022 landscape shrunk.”

Potentially.

Indeed, the martech market sees a remarkable amount of M&A action. LUMA Partners, one of the leading investment financial institutions in martech — and the creators of the original adtech landscape that motivated us about a 10 years back — publishes quarterly reports of acknowledged bargains. There have been 157 in 2019, 85 in 2020, and 166 in 2021.

About a single out of each five of people was a deal valued at $100 million or more. These types of substantial acquisitions practically often make the information. Last year, there have been 37. On regular, that’s 3 for every month that most likely garnered headlines in market publications.

It is a testament to just how significant the martech sector is that so several significant acquisitions are consistently happening. All those headlines in a natural way give the impact of large consolidation.

Nevertheless though that consolidation is actual, as a proportion of the whole quantity of martech solutions, these regarded acquisitions are 2% or so of the total landscape. Meanwhile, new martech startups and other much more founded businesses continue to enter the space. Ironically, consolidation is often a catalyst for additional application to be made.

Consolidated platforms make it less difficult for program builders to create applications on top rated of them. If you are standing on the shoulders of giants, the larger the large the better. And the fewer giants you have to opt for between, the greater much too, as it’s more very likely it is that the a single(s) you opt for will have scale and staying ability.

These good comments loop dynamics — usually framed as “winner takes all,” even if in reality there are usually numerous big winners — is why AWS, Microsoft Azure, and Google Cloud are so dominant as cloud platforms. And they’re continue to rising at a outstanding tempo. But in the process, they are birthing hundreds of thousands of applications designed on top rated of their foundations.

The rise of ecosystems and marketplaces in SaaS firms further enables the Cambrian explosion of professional professional apps as properly as tons of personalized applications personalized to person enterprises. They support solve the challenges of discovery and integration.

In the meantime, demand from customers for specialized program carries on to improve much too, as noted by the quantity of SaaS applications that organizations have in their stacks:

We’re getting into a write-up-electronic-transformation era, wherever providers are no lengthier planning to turn into “digital.” They are digital. And as they now compete ferociously for competitive positive aspects in their digital operations and digital customer activities, they are progressively comfy acquiring and creating more specialized software program.

Promoting stays one particular of the most intensive domains in which that competitiveness normally takes location — supplying martech business people enough chances to create benefit.

Traders still believe in these chances much too. They continue on to fund new and rising martech ventures. If you decide on up a duplicate of LUMA’s Q1 2022 Market Report, you are going to see the hundreds of tens of millions of dollars in money put into martech firms just in the 1st three months of this 12 months.

That claimed, there are rational boundaries for how several martech corporations can exist at a single time and how quite a few martech applications any just one corporation can usefully undertake. Although new martech merchandise are regularly born, outdated types fade absent into mergers, pivots, and discontinued oblivion.

The inquiries the martech landscape has answered every single 12 months are: (1) what’s the harmony among martech expansion and consolidation and (2) what is the composition of alternatives within just the general martech marketplace? People answers expose a good deal about the ongoing evolution of advertising and marketing.

What will the 2022 martech landscape expose? Tune in next Tuesday to locate out.

We’re likely to launch anything truly exclusive this year that I ensure you’ll want to be one particular of the first to have entry to.

P.S. Exploring the martech landscape has develop into a venture of epic proportion more than the many years. And with the particular surprise we will be unveiling this calendar year, the work to develop it has grown even additional. We wouldn’t have been in a position to do this devoid of the economical aid of numerous generous sponsors:

If you haven’t taken a search recently at the impressive martech methods these providers are manufacturing, check them out. It’s extraordinary.