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Our investment in Pantheon was announced today. Why Pantheon? It’s simple. The website is the single most important marketing asset for any company but for most companies the process of building, launching and running a business website is a mess. In enterprise software, a broken but important business process represents an opportunity for software to make things better and build a valuable company in the process.

Why does this matter and why is it hard?

For most businesses the website is the brand. The first instinct of a customer today is to check out a company online. For every one customer that comes to a first impression by walking into a physical building, ten or maybe one hundred others have already come to their conclusion, by going online. Marketing cannot get the website wrong.

If building a website was something that could get done once, “nail it and move on”, this would be a fairly tractable problem but it isn t. The pace of technology change means that website building is like painting the Golden Gate Bridge. Get it done, take five minutes to admire the view and then start again. In the last five years alone, social media, mobile platforms and content marketing have made every older website obsolete.

The final part of the problem is that building a corporate website is a fractured process. Marketing owns the problem but the process usually involves an outside design firm, often a separate development shop, a hosting company, and an in-house group of people, all of whom have opinions and only some of whom have ability. For any CMO, “redoing the website” is a must do and a high-risk part of the job.

A quick history of web content management

This is a twenty-year-old problem. In the 1990’s the two big winners in this market were Vignette and Interwoven selling expensive proprietary “on premise” software products. In the past decade these offerings and these companies have stalled as inexpensive, open source and cloud based software is where the world is going.

SaaS based products have swept the table in the digital marketing arena and we have been lucky enough to work with many of the winners including Omniture, Exact Target, Vitrue and Hubspot. These companies used the SaaS delivery model to “bundle up technology” and make it digestible to marketing departments as a service-based, business-focused offering, removed from the underlying technology. At the same time, open source has become the dominant business model for infrastructure products.

Web Content Management fell squarely in the middle. Squint one way and web content software is a product used by developers to build great websites, and like all web developer products it needs to be available open source. Squint the other way and the process of building, launching and running a website is a core business function for the market department and needs to be managed accordingly.

Drupal or WordPress + Pantheon

The verdict is in on web content software and open source has won. WordPress and Drupal are the two most commonly chosen web content management systems, with 50%+ market share. These sites are then hosted either in-house, or more often on a third party hosting site that offers a simple “hosted Drupal” offering.

This meets the developer need but not the needs of marketing. Getting a website up and running is a business process, not just a developer task. What marketing wants is a SaaS offering that will manage the build process across designers and developers, handle the code check in and check out, enforce “look and feel” across multiple sites, (most corporations have hundreds of websites, not just a single corporate site), and then manage uptime and changes once the site is launched, all from a single system. Marketing cares much less about what open source product is selected.

Enter Pantheon and the Website Platform

Pantheon does not build its own web content software but instead allows the developer to run either Drupal or WordPress on the Pantheon Website Platform. The company has leveraged new infrastructure technologies (an entire separate post could be written on how Pantheon leverages containers Varnish and its own file system) to be able to offer marketing departments and design agencies a product that is at rough cost parity with managed hosted services, but which offers an entire suite of SaaS tools for the management of websites. Customers come through a marketing funnel, driven by developer adoption and then can convert to paid status as the site is rolled out. Because there are always budget dollars for hosting, adoption happens quickly. The customers come for the hosting, but stay for the software.

Team, Traction and Upside

It goes without saying that we like the team. The founders, Zack, David, Josh and Matt have a strong technical background and also ran a website design agency. They know what it takes to get a website up and running and they have surrounded themselves with smart go to market executives. The traction is also there. Our focus at ScaleVP is – as the name would suggest – on companies where the product market fit is clear, the go to market path has started to emerge, and what is then required is scaling the business. Pantheon fits this to a tee.

Stepping back, what excites us the most is the chance to be part of what we see as the Digital Marketing SaaS company that will manage the marketing asset that is at the center of the entire digital marketing universe, the website. We have been part of building great companies in web analytics, (Omniture), customer marketing (ExactTarget), marketing automation (Hubspot) and social media marketing (Vitrue). The website is the glue around which all these products rotate but to date there has not been a meaningful SaaS offering to help manage websites. We think Pantheon will be that company.

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