You will no doubt have heard that Optimizely have been acquired by Episerver.
You may think that this is a good idea, or you may believe that where there is change, especially in the IT industry, there are rarely many customer benefits of being acquired. I would like to share a few thoughts on how we at Webtrends Optimize view this acquisition.
Whilst Optimizely have certainly been the dominant force in AB Testing and has been loved by many people in large organisations, there has been a recognised shift in the last 12 months, and recently we’ve seen negative comments from employees on platforms like Glassdoor and YCombinator.
Their presence in the news over the last 12-18 months has also highlighted their challenges, with topics such as:
- June 2019 – Optimizely raised $105 million of additional funding from 3 external investors, $50m of which was considered debt-financing.
- July 2020 – they laid off 15% of their staff citing COVID-19 as the reason.
Based on the above, Optimizely may have been having their own issues and felt the timing was right to make a sale.
It still feels slightly strange though, when so many retail / ecommerce companies are investing more in technologies post COVID-19 to counteract the impact on the high street, that they laid-off staff and would still have had funds to potentially stimulate growth even further.
So, by the end of November the deal will seemingly be done and how will Optimizely staff and customers react?
Having been personally through a number of acquisitions during my time, I have direct experience of how staff and customers feel when a new owner is in town.
Firstly, the acquiring company always promises that things will not change, but inevitably they have to, and sometimes not positively.
No one likes enforced change. And whilst this acquisition may not send customers to their counsellors, to navigate their journeys along the change curve, it often causes those employees acquired by the new company to take stock of their lives.
If they have a choice and continuation of employment, will their boss be the same?
Will the ethos of the new company reflect the values of the old?
Will the passion they had when they first started, continue under new owners?
The customer perspective
From a customer perspective enforced change always creates an inflection point in their choice of supplier.
While they may have once been a very happy Optimizely customer, under a new owner they will start to look around come renewal time and be more receptive to other suppliers.
At that point any loyalty to their existing supplier will count for less.
The fear of lack of continuity may force them to look for a new partner that can offer stability, a robust roadmap and the promise of a brighter outlook.
Alongside an already-forced removal of thousands of customers from the Optimizely user base due to changes in pricing and billing, will this see that user base continue to shrink as customers seek alternatives?
In this acquisition Episerver are, I’m sure, hoping to amalgamate Optimizely’s product offering into a wider content marketing solution, following in the footsteps of the likes of Adobe and Oracle.
For Episerver’s existing enterprise customers, this may deliver some economies of scale, and it certainly opens Episerver up to a much-needed acceleration in their Professional Services offering.
However, moving away from a best of breed product to be part of a larger offering does not seem, for the customer at least, to always be a smart move. For the smaller customer who needs to have a nimble approach, or those new to Episerver, I fear Episerver/Optimizely will not be their first port of call.
History tells us that not all tech acquisitions are successful
In recent history, we’ve seen the Whatsapp co-founder Jan Koum quit a short while after it’s purchase by Facebook (along with many original staff members).
In my own experience I’ve gone through this process, from the perspective of being on the side of the acquired business, with Oracle purchasing the Infinity Analytics product from Webtrends Inc. when I was employed there. This created huge waves throughout the entire business.
I saw first-hand that Oracle tried to move across the entire engineering team from Webtrends, but not everyone stuck around for long once the dust eventually settled post-migration.
The Infinity Analytics platform was market-leading at the time, but 2+ years of trying to integrate it into the Oracle stack meant it stalled somewhat whilst the industry powered ahead. If you’re standing still, you’re going backwards.
Customer relationships were supposed to stay intact, but people got bored of waiting (or maybe just didn’t like Oracle) and so they’ve nearly all gone – even the most valuable clients.
So do I personally think that this acquisition by Episerver of Optimizely will work?
Slightly on the fence, but only time will tell I guess.
However, I do believe on past experience that it’s rare for either former employees or customers to benefit in the long term.
And, looking at the wider landscape of testing tools owned or acquired by larger businesses (Adobe, Oracle, etc.), we’ve seen that the technical advancement of these platforms are no longer their top priority, and that as Professional Services engagements become important, their relationships with agencies will continue to become even more fractured.
One thing’s for sure, this move is likely to cause some huge ripples throughout the CRO and experimentation industry.