The story of Acquia - from a pet project to a $200 million company
The story of Acquia - from a pet project to a $200 million company
While doing some market research a year ago, I stumbled upon a Digital Experience Platform I hadn’t heard about before called Acquia. I discovered their route to success was quite a different story as compared to large market players like Adobe, Sitecore and Oracle.
In 2000, Dries Buytaert, a student from the University of Antwerp (The Netherlands), started a small forum site to communicate on a daily basis with his colleagues. They exchanged notes, shared interesting stories, and posted the usual Web content.
A year later, Dries decided to move his pet project a step forward and called it Drupal, publishing it online as Open Source Software. He wanted to make his platform available to others to ease their web development tasks and let them focus on making better web sites. The project caught the interest of a large community of developers, and soon became one of the most popular CMSes on the market. But it didn’t happen overnight...
While working on his PhD, Drupal’s founder came to the conclusion that strong commercial backing can bring needed, more rapid growth to an Open Source project than free community efforts give. His goal was to build up scale and provide customers a Drupal-based business offering, including enterprise support and digital services. It was an answer to a market gap he only discovered by accident when MTV approached him for help with their Drupal implementation.
With Dries still in Antwerp, 3000 miles away was a guy named Jay Batson - a successful entrepreneur with a seat in one of the venture capital firms from Boston. He had a similar idea of building a business around an Open Source project. After evaluating hundreds of such solutions, Jay narrowed his choice down to two solutions, one being Drupal. Jay and Dries met in 2007 over breakfast, and months later agreed to found a startup called Acquia with Batson to provide $7 million in seed money.
“Receiving our Series A funding was an incredible vote of confidence in Drupal, but it was also a milestone with lots of mixed emotions. We had raised $7 million, which is not a trivial amount. While I was excited, it was also a big step into the unknown.” Dries Buytaert, Acquia’s First Decade: The Founding Story
2 bold moves that made Acquia successful
There were two landmarks in Acquia's history that had a deciding impact on what Acquia is today, having hit $200 million revenue in 2018.
In 2008, the Acquia team realised that to make Drupal scalable they needed to focus on the infrastructure, as the system itself had no huge problems. That was when they placed their bet on an emerging technology called “The Cloud”. The Cloud approach offered flexibility and scalability to server infrastructure that large Drupal projects required. It also brought significant cost optimisation and improvement in reliability, as well as a new set of tools for developers working on complex projects.
The idea behind Acquia was to build a company to be the same type of enhanced support partner to Drupal that Red Hat was to Linux. But enterprise support was not enough, and these new cloud services were filling the gap and helping Acquia to commercialise Drupal.
In 2014, Acquia placed another bet to “build the universal platform for the world’s greatest digital experiences”. On Drupal's 13th birthday, its founder admitted it was time to go from content management to digital experience management. Building Acquia as this Digital Experience Platform was a big challenge, as it was no longer about providing Drupal with scalability, usability and easy access to casual users, nor was it just supporting business with their Drupal rollouts. The new paradigm left the area of web development, moving towards a complex solution to manage digital experience of brands online - across markets, languages, target groups and devices.
The power of Open Source
Such bold moves required Dries and his team to work hard in growing the brand with new strategic software acquisitions that fit their vision. In 2019 alone, three new solutions joined the platform:
- Mautic - an open source Marketing Automation tool
- Cohesion - a visual Drupal website builder made for non-developers
- AgilONE - a Customer Data Platform (CDP) using machine learning to build customer behaviour models empowering 1-on-1 communication with clients
Competing with market leaders while contributing to Drupal and Mautic’s Open Source communities required substantial investment to keep the business and community goals in sight.
With $173.5 million in funding raised by 2019, they went a step further and joined ranks with Vista Equity Partners through a $1 billion acquisition deal that gave their VC partner over 50% of Acquia shares.
Dries shared the news on his blog, stating:
“This investment should be great news for the Drupal and Mautic communities, as we'll have the right resources to compete against other solutions, and our deep commitment to Drupal, Mautic and Open Source will be unchanged. In fact, we will continue to increase our current level of investment in Open Source as we grow our business.”
Vista is known for fast moving pump-and-dump investments, but it looks like that with Acquia they may be aiming for long-term profits, as this particular brand is not only about the money but also the community.
Investment is piped not only into business growth but also into the makeup of the firm’s workforce and its social impact as well, to “attract less technical and more diverse people to Drupal”, “to enable people from underrepresented groups to contribute, attend community events, and more.”
As Dries once wrote “The best thing a human being can do is to help another human being.”
2020 - a big year for Acquia
Jeff Bezos, CEO and Amazon founder, wrote in this famous letter to shareholders in 1997:
“Because of our emphasis on the long-term, we may make decisions and weigh trade-offs differently than some companies.”
Today, Amazon is a giant company with no market players that could threaten its position in the retail market. When you are a market disruptor, experimenting and trying new models takes time. And this time is needed to check what works and what doesn’t, recognizing that quick wins can run counter to the long-term practices needed to embed success.
This validates Acquia’s approach, that thinking long-term through the early growth of the company was key to Acquia’s later innovative market fit. Their vision and bold moves were acknowledged by Gartner in 2020 when Acquia was named a leader in the 2020 Magic Quadrant for Digital Experience Platforms. They join an exclusive club of brands like Adobe, Sitecore and Oracle, who have already been positioned in the leaders’ quadrant for many years..
The hybrid of Open Source and paid business models is uncommon in this area of the enterprise market, but it made Acquia successful.
And this is just the beginning for the brand, as they’ve reached the moment with a portfolio that can go head-to-head with the solutions already acknowledged by Gartner and Forrester Research as best of the best.
I believe these will be some of the main sources of Acquia growth in the coming years:
Further growing excellence of Drupal, with Drupal 9 released in May 2020 and now coming up on 20 years on the market
Making integration of newly acquired next-gen tools ever more seamless for users
Bringing big brands to their portfolio of clients
Growing their partner network, as it is the best market model to navigate industry pressures for such platforms
Working strongly on reducing “time-to-market” of their releases, and pushing usability to the next level, allowing marketing departments to benefit from easy-to-use drop-in solutions
Making it easier for companies to quickly adopt advanced and fast evolving tools such as AI and machine learning to build fresh personalised content