In an industry long defined by relentless expansion, the State of Martech 2025 report reveals a stark reversal: 1,211 marketing technology products disappeared from the global landscape in the past year.

That amounts to an 8.6% churn from last year’s total of 14,106 tools—a striking figure for a sector that has grown 100-fold since 2011.

What makes this decline more surprising is the source of the attrition. Contrary to expectations, the majority of these vanished tools were not AI-native startups struggling to survive a saturated market. Instead, 774 of the products that exited were launched before the AI boom ignited by ChatGPT in late 2022.

A Long-Anticipated Consolidation Begins

Since 2011, the martech ecosystem has grown from 150 products to 15,384 in 2025, according to data from Chiefmartec and MartechTribe. That’s a 10,156% increase in just 14 years. For years, analysts and operators alike have anticipated a wave of consolidation. That wave now appears to be underway.

The report notes that 84% of the products removed were shut down entirely, not acquired. These weren’t strategic mergers—they were full exits from the market, often without notice.

Even within the cohort of 3,068 AI-native tools added last year, only 321 have disappeared—a churn rate consistent with early-stage software sectors. The greater surprise is the sweeping disappearance of tools that had been around for years but failed to adapt or monetize effectively.

More Than an AI Shakeout

While generative AI tools fueled the explosive martech growth of 2023 and 2024, the bulk of this year's churn reflects a deeper issue: legacy martech products unable to evolve or justify their existence.

In some cases, older tools were acquired—often quietly—by larger platforms looking to embed specific capabilities into their core stacks. Customer Data Platforms (CDPs), for example, saw a wave of acquisitions involving names like ActionIQ, Lytics, and mParticle. But not all exits were graceful. Many companies that launched in the early 2010s failed to meet the growth expectations tied to their funding rounds and were sold at disappointing multiples—or not at all.

The report describes this dynamic bluntly: "There is only so much acquisition capacity in the market as a whole... most martech firms looking for an exit will not find one."

It’s a Buyer’s Market, But Few Are Buying

Data from LUMA Partners shows 259 martech and adtech acquisitions in 2024—a healthy figure but a fraction of the total number of tools on the market. Meanwhile, private equity firms and consolidators are highly selective, often retaining only the most strategic acquisitions.

What happens to the rest? Many tools quietly vanish. Others operate in "zombie mode"—still technically functional but with no support, roadmap, or future.

A Cycle of Renewal, Not Just Decline

Despite the churn, the authors frame this not as a collapse but as a renewal cycle. While legacy vendors exit, a new generation of AI-native, composable, and lean startups is emerging—often bootstrapped or modestly funded, and better suited to modern marketing realities.

These new entrants don’t require billion-dollar valuations to be successful. Instead, they’re building niche tools, composable platforms, and instant software solutions that can spin up value in days, not months.

The martech landscape is also shifting from traditional commercial software to what the report calls the "Hypertail": trillions of micro-apps and agent-built tools that appear and disappear as needed. It’s a chaotic environment—but one full of innovation and possibility.

What This Means for Marketers

For marketers, this churn is a warning sign. It’s no longer enough to build a stack based on features alone. Tool viability, integration capability, support, and adaptability to AI must now factor heavily into vendor decisions.

At the same time, the explosion of AI tooling makes it tempting to overbuild. The average enterprise now uses 660 apps, and the majority of marketers—62%—say they’re using more tools today than two years ago. But many of those tools may not be here next year.

The martech landscape remains large, vibrant, and valuable. But it’s also volatile. As the report notes, even if half of today’s martech products disappeared in the next two years, more than 7,500 would remain.

The real challenge now isn’t abundance. It’s resilience.