NetSuite Signs Definitive Agreement to Acquire Bronto Software

In a deal announced today that will see the merger of a major B2B and B2C e-commerce platform and business software provider, with an email marketing company, NetSuite is acquiring Bronto Software for approximately $200 million in cash and equity.

With the acquisition talks commencing late last year, the deal is expected to close in the second quarter of 2015, and will enable the two companies to supply retailers, manufacturers, wholesalers and distributors with NetSuite’s e-commerce and accounting software integrated with Bronto’s marketing tools, providing retailers with  a unique opportunity to market to customers more effectively.

The merge continues NetSuite’s focus on delivering a complete and consistent omnichannel experience for its 3,000+ customer base of retail brands using the SuiteCommerce solution. More than half of those customers are B2B, and last year it launched a new set of B2B software tools for its SuiteCommerce e-commerce platform. In the past three years, NetSuite has also purchased Retail Anywhere, Venda, and TribeHR.

Bronto, which has offices in the US, UK and Australia, currently has more than 1,400 brands using its commerce marketing automation platform, including Armani Exchange, Timex and Gander Mountain. Bronto and NetSuite also share a number of retail customers, including Precision Cycling and Cyberswim.

The companies will operate separately, and both are planning major hires. NetSuite plans to add 1,000 employees this year and Bronto is on track for an additional 100 hires, mostly at its headquarters in Raleigh-Durham, N.C.

In an email to its ‘Bronto Nation’ of customers, Joe Colopy, CEO of Bronto explained: “Bronto will operate as an independent business unit of NetSuite. It will continue to innovate on its platform” and “integrate with other e-Commerce platforms…Bronto’s leadership team will continue to guide the Bronto business.”

A press release from NetSuite states:

NetSuite Inc., the industry’s leading provider of cloud-based financials / ERP and omnichannel commerce software suites, today announced it has entered into a definitive agreement to acquire Bronto Software Inc., a privately-held cloud-based commerce marketing company, in a cash and equity transaction valued at approximately $200 million. This transaction is expected to close in the second quarter of 2015, subject to certain closing conditions and regulatory clearance.

The combination brings together leaders in cloud-based omnichannel commerce solutions. As the number one email marketing provider to retailers ranked on the Internet Retailer Top 1000, Bronto Software provides the premiere commerce marketing automation platform used by more than 1,400 brands, including Armani Exchange, Timex and Trek Bikes. NetSuite’s SuiteCommerce is the leading cloud-based omnichannel B2B and B2C commerce platform, with more than 3,000 brands leveraging SuiteCommerce to drive their commerce strategies across point-of-sale, ecommerce and call center. In addition, SuiteCommerce is the only unified cloud omnichannel commerce platform that brings together all the operational capabilities required to deliver a complete omnichannel commerce solution from order and inventory management to global multi-currency and multi-country tax compliance.

“This combination, for the first time ever, ties a rich marketing automation system with a cloud-based omnichannel commerce platform. The capabilities this solution will deliver are transformational,” said Zach Nelson, NetSuite CEO. “Just as customers demand seamless cross-channel shopping experiences, they increasingly expect companies to communicate consistently through all of their digital experiences – on site, at stores, in email or through social or mobile. By combining the two companies’ offerings and technology, we can help merchants deliver relevant and consistent digital commerce experiences throughout the customer journey.”

“Today’s consumers expect brands to know them across every channel and marketing touchpoint,” said Joe Colopy, Bronto Software CEO. “Providing that type of experience demands a unified approach to digital engagement, whether driving transactions online or offline or engaging with them through website, email, mobile or social. We’re thrilled to bring Bronto’s industry leading commerce marketing capabilities to NetSuite’s commerce solutions. This will help merchants to better engage with their customers, drive repeat purchases and build lifelong loyalty.”

Omnichannel Commerce: Disrupting Retail Today and Every Industry Tomorrow 
In the modern cloud world in which businesses and individuals are operating today, the difference between commerce and marketing has quickly become blurred. Consumers are in constant communication with brands in store and across email, mobile, social and web channels and are never more than a click away from a transaction. Just as the consumers’ desire for a seamless omnichannel commerce experience is pushing businesses to unify their commerce systems, a comparable change is occurring in marketing. Consumers increasingly expect companies to present a consistent and unified brand experience across all marketing channels.

Born in the cloud in 2002, Bronto has been exclusively focused on solving the challenges of commerce marketers. Distinguishing itself from email marketing providers with simple “one size fits all” messaging, Bronto pioneered commerce marketing automation to execute natively on campaigns driven by orders and other commerce-specific elements. This enables brands to deliver timely and relevant digital marketing, fuel brand engagement and drive revenue throughout the customer lifecycle.

Bronto offers a host of capabilities in functionality that unifies a shopper’s omnichannel journey:

  • Messaging: Powerful yet intuitive tools designed for commerce marketers to personalize and execute on every aspect of email, SMS and social campaigns that drives online and offline sales.
  • Automation: Simple drag-and-drop tools to create intricate multi-step automated campaigns, like cart recovery, ratings and reviews follow-up, post-purchase, welcome series and other staples of the modern commerce marketer.
  • Marketing CRM: Robust list management and segmentation tools to assess engagement across all messaging channels. It includes common list building features like website landing pages and pop-up boxes, text-to-join SMS campaigns to drive list growth.
  • Omnichannel: Features that bridge online and offline to give one view of the customer for the commerce marketer. It includes features like e-receipts and coupon management. These high-impact campaigns allow digital to in-store attribution.

Power Retail chatted to Andy Lloyd, General Manager of eCommerce Products for NetSuite, to see what this latest strategic move by the e-commerce platform provider means for customers across both companies.

What made Bronto the right fit for NetSuite?

There are a lot of email marketing providers out there that grew up in a different world from today. They got big in the early 2000s, which was a period of an old school separation of marketing from sales, where marketers put up a billboard and expected people to come in-store. In the same way, email marketing was seen as junk mail sent to a mailbox in the hope the recipient showed up in-store. 

Bronto focuses on commerce marketing and is the direction things are going. Customers are never more than a click away from performing a transaction on your site, and the email in the inbox should be viewed as the first click in the journey towards them performing that transaction. The focus of email marketing should be around remaining engaged with customers, so when they’re ready to transact there will be a seamless experience from email or other marketing material to the transaction. 

Remaining in contact with customers on an ongoing basis is a critical aspect of running a profitable business, and is a very different approach from blasting out emails using traditional CRM tools. Bronto’s approach to getting consumers to a site and getting them to transact aligns well with our omnichannel vision, whereby more transactions flow through software rather than through sales people.

What do you believe the biggest benefit to customers will be as a result of the acquisition? 

Looking at the medium term, Bronto has a great abandon cart targeting solution and mechanism for marketing to those customers, plus a great solution for emailing coupons to customers that have a limited time duration. So there’s lots of great functionality that will offer a seamless fit from day one of integrating the two products together. 

In the longer run, what we’ve seen from our customer base is a really good response to our omnichannel commerce solution, offering the ability for customers to run in-store point of sale, e-commerce and telephone orders from a single system. Getting that single view of the customer has proven to be an incredible value proposition to our customers, but as we’ve done that we’ve started to realise that while that helps unify how our customers transact and allows our customers a single view of their shoppers across every channel, increasingly they’re not only looking to expect transactions from their customer, they’re looking to remain engaged with their customers between site visits and between visits to the physical store. The marketing team are frustrated that they’re expected to manage one aspect of customer interactions through their e-commerce website, and then use a different system for all their other marketing activities including email, social and SMS mobile. 

So we believe this acquisition is the logical next step in building an overall omnichannel commerce solution so that your marketing team can work with one system across every interaction with the customer and all data – transactional or behavioural – is within a single system. Ultimately, the end shopper will benefit from this new unified communication platform. 

By breaking down the barrier of having one system for managing the site and another for email communications, and having one team responsible for an overall comprehensive view of the customer and offering a seamless experience, it represents a place of convergence that couldn’t be imagined because two companies were operating it. 

We’ve been trying to develop a team that can focus 24 hours a day, seven days a week on making sure the marketing department thought that NetSuite was the best solution for them. We wanted to buy a company focused on that, with a strong leadership team for the next evolution. The Bronto leadership team are signed on to continue forward, and their responsibility is to figure out how to converge their product with ours, so in a few years we’re releasing functionality that is a convergence of a site experience and email experience that we can’t imagine now. It’s about talking to the customer and solving customer problems, and then the technology should fall out from there.

What will this mean for existing NetSuite customers using alternative email service providers? 

Our existing customers are welcome to use a different email provider, but it’s incumbent on us to present a solution where the economics and experience of using the product merits them moving off their existing provider. But there will be no forced migration where no other email provider can integrate to the NetSuite platform going forward, we’re happy for them to use their existing providers. But in the long run, it will be a no brainer to use our combined solution. 

Likewise on the Bronto side, they work with other e-commerce providers, and there is no expectation that we’re going to tell their customers they can only use Bronto in conjunction with NetSuite. They will continue to sell to customers using third party platforms, but in the same way we want to help Bronto present a value proposition that causes NetSuite customers to migrate to the Bronto solution, we want a combined solution to be strong enough that the Bronto customers using another e-commerce solution will consider migrating to the NetSuite solution. We don’t think anyone out there offers the same combination of an omnichannel e-commerce platform with an omnichannel marketing solution.

Power Retail will be attending the NetSuite SuiteWorld conference in May in San Jose. What can we expect?

There will be more exciting announcements, and some are the result of the acquisitions we made a year or two ago. This is an example of how day one of the Bronto acquisition is exciting, but the future two years from now is even more exciting.

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