I've been following Web Content & Experience Management vendor Sitecore since it emerged from the primordial soup of Nordic competitors in 2001 and eventually evolved its way to the top echelons of the global WCM market. The company's focus on core R&D and channel-based selling proved a winning strategy, but I think Sitecore has hit a ceiling in recent years.
Impressively Complicated Platform
Natural selection made Sitecore an impressively rich if unusually complicated, developer-centric platform. In fact, it's more of a toolkit, but that's a bonus for the vendor's integration partners. Sitecore also hit on advanced personalization as an early focus, cleverly sensing that customers would very much like to buy this, even if almost no one had the chops to actually implement it. In any case, all this heft led to a very complicated architecture.
Sitecore Logical Architecture, via implementation partner, Oshyn.
So, Sitecore joined the ranks of the WCM upper tier, became a "unicorn," and now competes directly with Adobe AEM, among others. Adobe is the free sample for our WCM evaluation research, so you can read our critique yourself. Many of the same problems customers experience with AEM also befall Sitecore licensees. You face a greater risk of overbuying than underbuying in the WCM market.
The Paradox of a High-End DXP
In recent years, Sitecore has also pursued a different journey, to become a "digital experience platform." The idea is you put nearly all your digital engagement services in a single platform. (Contrast with the likes of Adobe, IBM, and Oracle, who try to sell you a curious menagerie of acquired tools integrated mostly by sharing common brand names.)
Among other services, Sitecore wants to bundle in its Experience Platform (XP):
- Web Content Management
- Catalog Management
- Customer Data Aggregation
- Digital Analytics
- Marketing Automation
- Campaign Orchestration
- Social Media Management
- And optionally Ecommerce
Sitecore XP Services Stack; Source: the vendor.
But do customers want this sort of omnibus platform? This approach is a decent strategy for smaller enterprises that may have a digital team of one. For a large enterprise with a sophisticated digital strategy, it's a total clusterfunk. Such enterprises are working to separate out the pieces of their growing MarTech stacks for greater agility.
The Sitecore model almost harkens to the era of über-webmasters, doing it all from a single control panel. We don't live in that world anymore. Specialized digital teams need different tools and interfaces. Yes, integration has now become the prime MarTech challenge, but who wants to deploy an ill-fitting catalog or email marketing solution just because it's bundled with your WCM platform?
Perhaps you can't blame Sitecore entirely here, since their industry analyst advisors are promoting the myth of an "enterprise DXP." But that's the thing about analyst advice — including any counsel you get from us at RSG — in the end we all have to be accountable for our own digital strategies.
Sitecore may point out that you can simply license a base CMS called "Experience Manager" (XM). The vendor is too clever by half here, since XM is not just the WCM bits disconnected from the rest of the platform, but rather a dumbed-down CMS product missing enhanced WCM features and some UX niceties of the larger edition. So you have to purchase the complete XP bundle to obtain the advanced WCM services that would justify Sitecore at all in the first place...
MarTech Stacks: Bigger at the Base, Smaller at the Edge
There's another big trend that's rising slowly but still rather ominous for Sitecore: large enterprises are breaking out journey orchestration, personalization, and customer data aggregation as separate horizontal tiers in their marketing stacks. They want these core enterprise marketing services to become disconnected from individual engagement silos.
For the large customers it targets, I believe Sitecore's on the wrong side of history by bundling these services into their XP platform (though they're far from alone here).
"But We're Growing!"
Sitecore will tell you that it's growing regardless. The vendor's a private company so we can't confirm this, but I take them at their word. Nearly all WCM vendors are expanding revenues as they roll out managed PaaS hosting as a new service line and convert to ungodly-lucrative subscription pricing. (Flip side: you the customer is getting ripped off, but that's another story...)
The longer story is that customers don't actually deploy all of Sitecore's extraneous services. I've heard running jokes among Sitecore integrators that licensees simply use the platform to build big fancy websites, and that's all. The integrated analytics and email marketing? "Demo candy."
The scope for WCM is getting skinnier. That's a good thing. But it's a poor omen for Sitecore, Adobe, SDL-Tridion, Acquia, and others whose central value proposition seems to be, "we're expensive, so we must be good." You can still make a case for a higher-end WCM platform — and at times we make that case for enterprise subscribers who have fairly unique needs — but it's increasingly rare.
If you're an RSG subscriber and wish to discuss this further, feel free to schedule an advisory session with one of our analysts.