Not too long ago, if asked what Adobe had in common with Shopify, the answer would be “nothing”! After all they aren’t even in the same market space. Adobe is well known for it’s suite of creative software, Adobe Creative Cloud, which caters for the creative industry, whereas Shopify is an eCommerce platform that makes it easy for people to setup online stores.
Things have changed somewhat, though, and we have seen Adobe immerse itself ever deeper into the online marketing space with tools like Adobe Marketing Cloud, Adobe Experience Cloud and Adobe Data Analytics Cloud.
With the recent decision to buy Magento, an eCommerce platform similar to Shopify, Adobe has confirmed that it would like to own a piece of this market too. If you are wondering whether the marketplace sees them as a legitimate contender, just read this excerpt from CBC News:
“We see the Adobe/Magento combination as a new long-term threat for investors to consider as Shopify continues to target larger merchants,” Brian Essex, analyst at Morgan Stanley wrote in a note.
Shopify shares fell as much as 5.5 percent on Monday after market when Adobe announced the Magento deal.”
Here are some more excerpts regarding this recent deal.
Adobe Systems Inc., the elder software-business statesman behind photo-editing software Photoshop and PDF reader, is buying e-commerce firm Magento Commerce for $1.68 billion, adding a key piece to its platform.
The acquisition — which would put Adobe ADBE, +0.51% head-to-head with the likes of Salesforce.com — presents a revenue opportunity of some $13 billion, Brad Rencher, Adobe’s executive vice president of digital experience, said in a conference call Monday, citing market-research firm estimates.
Magento, already an Adobe partner, was bought in 2015 from eBay Inc. EBAY, -0.66% as part of a $925 million deal by a group of investors that included Permira, Sterling Partners, Longview Asset Management and Innotrac Corp. Permira carved out Magento in November of that year.
Magento, whose clients include Canon 7751, +0.24% and Rosetta Stone RST, +1.36% along with overlapping Adobe customers Coca-Cola Co. KO, -0.19% and Nestlé SA NESN, +0.53% , handles more than $150 billion in gross merchandise volume
The third time was the charm for Adobe in its $1.68 billion acquisition of commerce platform Magento, which leaves it poised to spar in earnest with CRM and commerce heavyweights like Salesforce, SAP and Oracle.
Per Forrester senior analyst Mark Grannan, this marks at least Adobe’s third attempt to make an acquisition in commerce after SAP snatched up Hybris in 2013 and Salesforce nabbed Demandware in 2016.
As a result, he said, Adobe is now where it would have been a few years ago had one of those deals worked in its favor.
Grannan called the deal a good buy for the money given Magento’s subscription revenue and anticipated growth in commerce.
Now before you are tempted to think that Adobe have lost their way and are just buying up whatever looks good, if you step back just a little and look at the bigger picture, you will see that their focus really hasn’t changed, at all. Since the beginning, they have offered tools that will aid their users. Today they are still focusing their efforts on tools that aid their users. They have simply broadened the type of user they cater for.