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Summary

EPiServer and Ektron have merged to combine their resources and turn their products into a single offer, Digital Experience Cloud. Both companies are content management systems veterans with reputations for strong and robust products. Both have, however, lacked the ambition, investment, and marketing flair to become global entities. Becoming a global entity is the priority for the newly formed company.

The merger offers significant product and market synergies

On January 27, 2015 EPiServer and Ektron announced that they had merged. The combined entity will retain the EPiServer branding, and the Ektron brand will be retired over time. The deal was brokered by the technology-focused private equity investment firm Accel-KKR, which had equity stakes in both companies and now owns the combined entity. The combined company has 8,800 customers in 30 countries and 880 business partners.

The products of both will be merged into the next-generation Digital Experience Cloud offer, which will include web content management, multichannel marketing, and e-commerce capabilities in a single cloud-based platform. The target market will be mid-market companies globally, and the company will compete directly with Sitecore and, to lesser extent, Adobe, Acquia, and Oracle.

The core product will be centered on EPiServer’s strength in content management and e-commerce. However, Ektron’s advanced product functionality in A/B testing, persona management, and connectivity with third-party systems (through eSync and Digital Experience Hub) will also feature in the converged product.

There are many similarities between the product ranges of EPiServer and Ektron, which will ease and speed product convergence. Both platforms are based on .NET and have modular, service-based architectures and both are designed for mid-market usage. There are also geographic coverage synergies. Ektron’s user base is predominantly US-centric (based out of Nashua, NH), whereas EPiServer (based out of Stockholm, Sweden) is Europe-centric. The strengths and weaknesses of both companies are well known to Accel-KKR, which has advised both companies in the past.

Ovum expects the merged company use the financial muscle of Accel-KKR to acquire more companies in order to fill any gaps in its product range. This would allow it to compete more effectively with the fully formed suites of Sitecore and Adobe. Accel-KKR has nominated two of its own experienced staff to lead the merged company; this should ensure that there is no infighting and that there is significant opportunity to access funds for acquisition purposes.

Appendix

Author

Gerry Brown, Senior Analyst, Customer Engagement

gerry.brown@ovum.com

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