Sitecore: Retaining Technological Leadership Through Digital Tech Acquisitions

(a) Situation faced: In 2011, Sitecore was the market leader in web content management industry. Sitecore envisaged that the web content industry was about to converge with the e-commerce industry as one unified industry. To remain competitive in this new market, Sitecore would need to provide integrated commerce and a content platform in its product portfolio. To build this unified platform, Sitecore would require a commerce engine. Sitecore’s competitors also recognized this gap in the market and started actively exploring options for making this industry convergence. Thus, the competition to be the first one to offer a unified platform in the industry was in full throttle. (b) Action taken: Sitecore considered the different options of the building, buying (acquiring), and partnering to cover up the e-commerce gap in its offering. Building the commerce engine would involve complex development, and take a longer time to market. Sitecore, therefore, shortlisted the different options for partnering and acquiring. During this shortlisting phase, a company named SMITH—with one of the leading e-commerce engine in their product portfolio—approached Sitecore with a selling proposition. Sitecore decided to acquire the e-commerce unit. Sitecore established the strategic rationale for the acquisition, investigated its feasibility, and eventually integrated both the technology and the development team of the e-commerce engine into a coherent platform. (c) Results achieved: As a result, Sitecore achieved technology leadership in the converged industry including both e-commerce and web content management—commonly referred to as omni-channel retailing. Being the first one to be able to combine commerce and content, Sitecore has been successful in maintaining its leadership position in Gartner’s magic quadrant for web content management for four straight years since the acquisition of Commerce Server in 2013. Altogether, Sitecore has held this leadership position in quadrant for 8 consecutive years now. By providing a unified platform, Sitecore has been able to increase customer satisfaction and successfully established a partner eco-system around the unified platform. (d) Lessons learned: Sitecore learned valuable lessons for what it takes to retain technology leadership through acquisitions that are of value to all companies seeking to compete on technological innovation. Five critical learnings extracted are: First, when speed matters, acquisition can be the right thing instead of building or partnering with technology. Second, the cultural fit is essential, and to ensure this fits the organization, it must invest in the acquisition process. Third, acquiring something that is not overlapping makes integration easier. Fourth, a tech acquisition creates technological debt that needs to be paid off. Fifth, it is never too early to think about integration in the acquisition process.