The News
Freshworks
on 29/08/2017 announced
that it acquired Zarget, a conversion rate
optimization software startup. With this being the ninth acquisition in about
two years Freshworks is continuing to augment its development by adding missing
functionality from outside while adding talent to the teams. Zarget’s software
is helping marketers measuring and understanding how users interact with their
websites, which is important information when it comes to assessing reasons for
users not becoming customers. For Freshworks this acquisition also marks a
first step to close the functional gap that marketing still is for them. With
Freshworks founder and CEO Girish Mathrubootham having been an angel investor
into Zarget this is also a natural choice.
An interesting piece of information comes
as a quote by Girish: “ At Freshworks, our ambition is to emerge as the de
facto cloud-based business software platform for businesses of all sizes”.
The Bigger Picture
There are a couple of interesting facets to
this acquisition.
Freshworks, by virtue of its rebranding
from Freshdesk, has made a bold statement that they are not striving to cover
customer service only. This, of course, was clear earlier when looking at their
range of products and solutions but this naming implies an ambition. I have commented
on this this earlier.
While they are still concentrating on the
wider CRM area with bot
acquisitions, a recent release of Freshteam, a CRM for
recruiters, there is a tendency to divert into different areas. This time it is
about starting to close a fundamental gap in Freshworks’ CRM offerings: So far
there has virtually been no marketing functionality.
Looking specifically at marketing software
Freshworks looks slightly off the beaten path by not zeroing in on a-mail
marketing, but are looking at web sites, which are still highly important,
especially for SaaS software providers. More than in e-mails it is crucial to
find out here what works and what not.
And then there is Girish’s statement.
So far Freshworks had a laser sharp focus
on the smaller end of the SMB market. This market is estimated to be severely
underserved by CRM software with e-mail and spread sheets being the main tools
of the trade. So far I have seen them mainly following a strategy that is
similar to Zoho. Apparently this has changed. “Companies of all sizes” now
hints at the ambition of looking into tier 1 customers and entering the
territories of the Salesforce’s, Microsoft’s, SAP’s and Oracle’s of this planet
– not to mention another roster of smaller vendors.
MyPoV and Advice
Strengthening their marketing functionality
is an important step for Freshworks. There is no CRM that does not cover all
three pillars. I have said this a number of times, and am looking forward to
what comes next. Data capturing is one thing, being able to automatically
personalize and to set up multi channel campaigns based on it is yet another
one. But the picture is getting rounder.
Becoming the de-facto business software
platform for businesses of all sizes is a bold vision and I’d recommend starting
this from the S end of the market. All of the above mentioned companies have
the same objective, and for good reasons.
When going too bold the risk of getting
disrupted by other companies is just too big. Look at how Salesforce rolled up
the CRM market. Surely, with SaaS they had another business model than the
incumbents, but Salesforce successfully attacked them from below.
Or the other way round observe how
Microsoft is currently clawing its way back to smaller companies, with the help
of Nimble and lots of other partners.
From a customer point of view there is a
serious alternative to Zoho emerging, especially where fast sales cycles and
great customer service requirements are involved. It is worthwhile having a
look at Freshworks in this case.
Regardless, it is also important go gain a
good understanding of the strategy and road map.
Comments
Post a Comment