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SDL Acquires Fredhopper: Amazon-Type Functionality for "The Rest of Us"
Posted by Rebecca Ray, Benjamin B. Sargent on January 26, 2010  in the following blogs: Business Globalization, Best Practices, Global Marketing, Market Data, Technology, Translation and Localization
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SDL announced another technology purchase last week to further deliver on its strategy to be a one-stop-shop for global content management tools. Its acquisition of Amsterdam-based Fredhopper will enable it to be a player in global e-commerce solutions.

In a nutshell, SDL's purchase provides access to Amazon-type functionality "for the rest of us." Companies like Amazon and eBay can afford to develop their own technology to drive their online sales (see "Unleashing the Global Customer Experience," Nov07). What Fredhopper has done is to create an off-the-shelf solution for the tens of thousands of online retailers who don't have the resources to create their own.

By integrating Fredhopper technology with Tridion, its global web content management (WCM) platform, SDL will provide a deeper level of functionality to enable companies to eliminate much of the guesswork and manual processing involved in developing, implementing, managing, and measuring coordinated brand campaigns through multiple channels across multiple markets (see "The Top 40 Global Online Brands," Nov09).

The development teams from both companies began working together last year through a technology partnership. The integrated product, SmartTarget, is scheduled to ship by the end of this quarter. Fredhopper will become an independent division, SDL eCommerce Technologies, led by its current management team. It will be free to continue to sell to and interoperate with other WCM platforms, in addition to SDL's Tridion.

The opportunity for SDL is two-fold:
  • It gains immediate entry into the retail vertical through the Fredhopper customer base, to which it hopes to sell its other solutions.
  • At the same time, SDL moves further up the foodchain into marketing management, allowing it to sell the Fredhopper solution into new verticals through its existing customers in high tech and manufacturing.
Fredhopper benefits from being acquired through gaining access to new markets in the U.S. and Asia without having to build its own global sales and support channel. In addition, SDL's deeper pockets and broader product line will allow it to innovate faster than it would have been able to do on its own.

The bottom line? By acquiring and integrating Fredhopper's technology into its own web content management software, SDL is providing an off-the-shelf option for companies that don't want to build their own solutions for online targeting and merchandising. SDL's offering won't be cheap, but it will certainly be much more cost-effective in the medium- to long-term than building, maintaining and updating a custom solution.


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Keywords: Differentiation, Global branding, Mergers and acquisitions, Sales and marketing, Technology strategy, Translation

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