Columnist: Watch Out, Email Studebakers – Consolidation is Coming

Columnist Watch Out, Email Studebakers - Consolidation is ComingEveryone can name the email service providers that get the lion’s share of media glare — firms like Google, AOL, Yahoo.

But according to Dave Hendricks in a column for LiveIntent, communications and infrastructure firms Indiemark and BlackBox tally the number of companies that self-identify as an email service providers (ESPs) as a robust 387. According to Email Vendor Selection, there are even more — an astronomical 459.

Hendricks believes the ESP industry is surprisingly healthy at the moment, but sees changes coming soon.

“Will the email marketing ecosystem go the way of the automobile industry and see further consolidation?” Hendricks asks. “Are email marketers ready for the era of the marketing cloud?”

Though ESPs don’t just process email (many of them process bounces, manage CRM data, and organize cross-channel campaigns, among other things),  Hendricks likens the coming weeding to the early years of the automobile.

“Let’s look at the rise of another industry as disruptive and ubiquitous as email – the automobile,” Hendricks says. “Brought to market roughly 100 years before the rise of commercial email, the automobile offers many parallels to email marketing.”

How so?

“At the beginning of 1928, there were more than 100 car manufacturers,” the columnist explains. “But consolidation is a constant in business and in order to scale, the larger car companies – at that time GM, Ford, and Chrysler – sought to grow market share by acquisition, not unlike what is happening in the email industrial complex today. By 1935, the Big Three had 90 percent of the domestic U.S. auto market locked up.”

How many providers will survive the coming consolidation era and the new world of the marketing cloud?

We could end up with another Big Three.

“So look for further consolidation in the email industrial complex, leading to theoretically simpler marketing automation platforms produced by fewer players who seek to cater to marketers seeking standardization,” says Hendricks.