Editor’s note: Matthew Casey is an analyst at Technology Business Research. He analyzes IBM’s announced purchase Thursday of mobile apps commerce startup Xtify.

HAMPTON, N.H. – Xtify enables the CMO, or chief marketing officer, to act upon insight driven from IBM’s Smarter Commerce analytics capabilities.

As customers increasingly utilize mobile devices for everyday activities including purchasing goods and managing personal finances, interacting with and maintaining engagements with end-users becomes complicated for organizations. Intersecting major IBM strategic initiatives, including Smarter Commerce, analytics, mobility and cloud, the Oct. 3 acquisition of mobile marketing platform provider, Xtify, furthers IBM’s ability to continue executing on its tried and true strategy of delivering customer-centric solutions, in this case empowering CMOs.

Traditional marketing channels become ineffective as customer touch-points with organizations change from in-person and direct interactions to mobile and online engagements. TBR’s SourceIT Retail and Banking/Financial Services reports highlight the increasing presence of mobility in terms of investment drivers and key areas of concerns for organizations across each of these industries. In these cases, as mobile commerce and banking continue gaining traction, organizations’ abilities to maintain a top-of-mind presence through mobile devices become crucial.

Combined with IBM’s existing Smarter Commerce solutions, which are grounded by the company’s analytics portfolio, Xtify provides IBM the content delivery capabilities to facilitate marketing efforts for organizations through a single solution. Set to be delivered via SoftLayer (IBM public cloud infrastructure provider purchased this past summer) Xtify presents IBM and channel partners additional revenue opportunities through value-added solutions sales across new and existing accounts.

For IBM, Xtify’s cloud-based mobile marketing platform provides a centralized tool for multi-channel marketing across native web-based notifications and push SMS messaging, with industry-specific packaging for the travel & hospitality, financial, government and retail spaces. The platform also incorporates location based marketing capabilities and back-end analytics capabilities to track customer interaction and behavior.

A minimal business applications presence will challenge IBM’s long-term solutions messaging

Following the Xtify buy, TBR anticipates future business applications acquisitions from IBM to solidify the messaging around its holistic solutions. Demonstrated by the December 2012 acquisition of Kenexa, a cloud HRM application vendor that falls outside of IBM Software’s core competencies, IBM is realizing the importance of a business applications presence to help ground and package analytics solutions.

Although Xtify brings IBM valuable content delivery capabilities for multi-channel marketing, IBM’s minimal presence in the business applications space presents challenges for the company to drive long-term growth from the acquisition. Native CRM providers including Oracle (Eloqua acquisition), SAP (hybris software acquisition) and Salesforce.com (ExactTarget acquisition) currently offer similar multi-channel marketing platforms that integrate directly with their business applications.

While TBR recognizes that solutions such as Xtify’s platform bring into play multiple data sources beyond simply CRM, the direct integration to native applications through a single-provider is a value proposition that IBM cannot yet deliver.


(C) TBR