Adobe, best known for Photoshop, an image editing software, Acrobat Reader, the Portable Document Format (PDF), Adobe Creative Suite and Adobe Creative Cloud has now acquired Magento Commerce, a market-leading commerce platform, for $1.68 billion on 21 May 2018.
Adobe is the only company with leadership in content creation, marketing, advertising, analytics and now commerce – enabling real-time experiences across the entire customer journey. The purchase gives Adobe a missing e-commerce platform piece that works in B2B and B2C contexts and should fit nicely in the company’s Experience Cloud.
As Content + Commerce capabilities have become inextricably linked, commerce plays a more integral part of the consumer experience than ever before.
With Magento’s position as the world’s most popular commerce platform and Adobe’s leadership in designing and delivering great digital experiences, we will enable every business to create and deliver compelling real-time experiences, engage with customers across every touchpoint, and transact anywhere across the entire customer journey for both B2C and B2B.
Now Adobe experience cloud will have the ability to deliver digital commerce enablement and order orchestration for both physical and digital goods across a range of industries with pre-built extensions such as payment, shipping, tax, and logistics. Adobe will also gain a particularly active community of 300,000 Magento Developers.
The Product Logic of the Acquisition
- It fills gaps in both platforms—together the platforms address the full spectrum of needs for digital business. Digital platform supported by an underlying cloud-based infrastructure, a set of robust APIs for connectivity, and a wide range of extensions or connectors with third-parties have become core to a competitive digital platform today.
- Adobe gains access to an active, vibrant open community that may in the long-term be even more important than the short-term impact of a broader platform offering.
Impact on the Competitive Environment
- Many small and medium size Magento clients will no longer be candidates for the combined offering. Expect Shopify and BigCommerce to aggressively step in and fill the gap.
- Magento will now be able to market itself in areas it just hasn,t had the capital to explore. With Adobe,s deep pockets, expect to see Magento have an even bigger presence in eCommerce arena, turning the heads of merchants it hasn’t attracted before.
- Competitors such as Sitecore have played on Magento’s lack of competitive WCM and personalization capabilities as one road to differentiation. The acquisition removes this point of differentiation. Expect Sitecore to speak to the benefits of a fully integrated content plus commerce management solution, and present the Adobe Experience Cloud as a “Frankenstein” of acquired parts. The jury is out on whether prospective clients will buy this take.
- To price turn-key cloud-based B2B marketing and e-commerce services in ways and packages that appeal to a wide array of businesses.
The deal for Magento is expected to close in the third quarter of Adobe’s fiscal year, pending regulatory approval. When they do join forces and assuming they can address the challenges, they will be a potent new tandem competing head-to-head with the best-of-breed digital platform vendors for global business.