Salesforce acquisition of Rebel hints at larger play to reinvent email marketing

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Credit: Rebel

The rivalry between Salesforce and Adobe escalated Friday with the announcement that Salesforce is acquiring interactive email outfit Rebel, the latest encroachment of the cloud tycoons on each other's turf.

Rebel provides consumers the ability to make purchases or write reviews within email rather than be directed to another landing page.That might not sound like much, but Home Depot, a Rebel customer, says it increased customer reviews by 55 percent after implementing its software, for example.

Although the move from Salesforce is a far cry from Adobe's $4.75 billion acquisition of Marketo, it does hint that the companies are planning larger plays.

"The idea of email being a direct communication channel is very tired," says Shar VanBoskirk, VP and principal analyst at Forrester. "We are in the beginning of improving email as a medium so it can have immersive experiences that's designed just for you and the brand."

To hear VanBoskirk tell it, Rebel is in the "first chapter of what's next for email," noting that email's use will go beyond "coupons and promotions."

The lay of the land

Adobe for years has been king among ad makers, thanks in large part to tools such as Photoshop, Illustrator, Lightroom and Dreamweaver. It's acquisition of Marketo, however, is a significant shot across Salesforce's bow as the company enters the landscape that Salesforce has long dominated.

At the same time, Salesforce is treading on Adobe's turf. In March, the company shelled out a cool $6.5 billion for MuleSoft. And in July, it purchased an A.I.-analytics company Datorama for $800 million.

VanBoskirk says Salesforce is working on email innovation and Rebel is just one step toward achieving that goal.

"This is all related to the arms race," she says. Adobe and Salesforce "each want to win each other's customers and they are trying to say, 'You don't need Adobe Analytics, you can use Salesforce for everything."

Still, VanBoskirk cautioned not to make too much of the Rebel purchase. "This particular acquisition won't launch Salesforce past Adobe, but it is part of a larger strategy," she says. "Adobe has a broader set of abilities, but Salesforce is saying, 'We will win around innovation and quality; our execution will be much better than what Adobe Campaign can do.'"

People familiar with the acquisition say Rebel will be folded into Salesforce Marketing Cloud, which is the smallest of the company's cloud businesses, generating $452 million in the second quarter, up 37 percent year-over-year. For contrast, Sales Cloud, the company's largest, generated more than $1 billion in revenue during the period, up nearly 13 percent when compared to the same time last year.

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