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Earlier this week, San Mateo-based Marketo, which makes marketing automation software, announced it was getting ready to go public. The move was a bit unusual, because the company said it’s going through the SEC’s new confidential IPO filing process; that process was put in place so companies could test the IPO waters, then pull out if necessary without anybody else having to know.

Why file confidentially, then tell the world about it?

Well, for one thing, Marketo likely has no plans to pull out; with enterprise software stocks in high demand on Wall Street, the company has been widely expected to go public. CEO Phil Fernandez Phil Fernandeztold me last year told me he’d already begun training his employees on the potential pitfalls of an IPO, which he experienced first-hand during the dot-com era as president of Epiphany. (Fernandez politely declined to comment, citing SEC “quiet period” rules for companies that have filed to go public, when I emailed him this week to ask about timing; the review process, however, typically takes several months.)

It’s also possible Marketo announced its IPO plans as a sort of nudge to bigger companies that it’s on the market. Skype, for instance, filed plans for a $100 million IPO in 2010 before selling to Microsoft nine months later for $8.5 billion. “Planning to go public really sets a price,” said R. “Ray” Wang of Constellation Research.

That said, Wang doesn’t see a long list of suitors with the wherewithal to make Marketo’s board an offer they can’t refuse. And, he said, “This is one of the hottest IPOs – it’s on the Workday level. A lot of money’s being invested in marketing automation.”

One of my colleagues even went so far as to predict Marketo “could end up being the biggest IPO of the year.” I’d argue that it’s way too soon to say that, with 2013 all of 60 days old.

“We’re happy for our friends at Marketo,” said Brian Jacobs of Emergence Capital Partners, a venture capital firm that invests only in software-as-a-service companies like Marketo. “We will see several other large SaaS IPOs this year, so I think it’s too early to predict which will be the biggest.”

For example, Jacobs pointed to Emergence portfolio company Veeva Systems of Pleasanton as a likely IPO candidate. He and others also noted that consumer companies like Twitter, Square and Dropbox could go public in 2013.

“I like Marketo,” added Scott Dietzen, CEO of Mountain View’s Pure Storage, another enterprise software maker and a Marketo customer. “But I suspect they will be topped if the IPO climate stays anywhere near this hot.”

Peter Delevett Peter Delevett (184 Posts)

Peter Delevett covers startups and venture capital for the San Jose Mercury News. He's been a journalist in Silicon Valley since the dot-com daze.