Digital Experience Software: The Next Major Packaged Software Market

Ted Schadler
Vice President, Principal Analyst
October 22, 2015
by Ted Schadler and Mark Grannan (click to see his post)
 
It happened with ERP in the 90’s. It happened with CRM in the 2000’s. It’s happening now with the digital experience software to serve up content and interactions on every screen along every step of a customer's digital journey. 
 
This highly fragmented and factured market — amusingly and powerfully captured in Scott Brinker's chaos of vendor logos — is starting to to converge and consolidate as major software vendors like Adobe, IBM, Oracle, SAP, and Salesforce as well as smaller vendors including Acquia, Demandware, EPiServer, SDL, and Sitecore build or buy the building blocks of a great digital experience. We just evaluated these vendors' digital experience platform portfolio in our Forrester Wave(tm): Digital Experience Platforms, Q4 2015.
 
Four forces are driving the convergence. 
  • First, digital consumers and business customers need consistent experiences across every channel, screen, and step in their journey. No more passoffs from marketing to commerce to service to loyalty. No more fractured experiences between online and offline channels. No more clunky mobile adaptations.
  • Second, content, customer, and analytics are core assets that span every product category. They are shared assets delivered as software components, no longer bound up in the delivery software.
  • Third, cloud deployments and loosely coupled integration makes it easier to buy, deploy, and incorporate software components, thus easing the burden on firms and their agency and integrator partners.
  • Fourth, the economics of the software industry takes money out of implementers' pockets and puts it into software vendors' pockets. It's happened dozens of times before going all the way back to the first operating systems. It's happening again with digital experience software.
At Forrester, we all this consolidating portfolio a digital experience platform (DXP) — software to manage, deliver, and optimize experiences consistently across every digital touchpoint. We've been evaluating the building blocks for years and years, and in 2014 we initiated a Forrester Wave evaluation to show how these vendors handle the entire stack of software.
 
Six major building blocks define the foundations of this converging software market:
  1. Content. Every web, mobile, wearable, and wall experience is enriched with words, pictures, videos, and sound — preferably personalized to each customer's wants.
  2. Customers. Knowing your customer in detail gives firms the ability to do right by them at each step of their journeys.
  3. Analytics. Knowing what works, what's working, what's important, and what's needed arms companies with eyes and ears and intelligence.
  4. Marketing. Reaching out or responding sensibly to prospects and customers on screens of every size is shockingly complex — but vital to attracting and retaining customers.
  5. Commerce. If someone wants to buy, you better be prepared to take their money and return a great product or service in exchange.
  6. Customer service. If you know I just bought a gizmo and I ask for help, there's a good chance I want help with my new gizmo. 
Yes, there are separate best-in-class software products for each of these building blocks. But as with ERP and CRM, the future of this market lies in vendors that assemble and integrate the best portfolio of products and develop the richest ecosystems of partners and suppliers. 
 
So who's best? Well, it's an early market so vendors differentiate still on their best of breed products rather than their portfolio. Today, Adobe eeks out the lead position, followed closely by a dense field with Oracle, SAP, Salesforce, Acquia, Sitecore, IBM, and Demandware, SDL, and EPiServer.
 
It's way too early to call this race. The diversity of digital scenarios rewards vendors we evaluated and others we did not evaluate this year like Opentext, HP, Intershop, and Digital River. We also expect Microsoft to jump back in at some point — they have many of the assets today not to mention a world class cloud platform. In this  field of giants and some disrupters, the software convergence is becoming clear. As with ERP and CRM so will go DXP.
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