Adobe’s acquisition of Magento – What could happen next?

Recently, Adobe and Magento have been in the headlines for a reason. Adobe is all set to take over Magento. Adobe is a go-to source for creative and content professionals. It is best known as the maker of best-selling software like Photoshop, Illustrator, Premiere Pro, After Effects and the universally popular PDF.

In the recent past, Adobe shifted its business model from selling out-of-box software to a SaaS-based subscription business model, called the Creative Cloud. The shift to Creative Cloud increased Adobe’s revenue by 39% and also turned it into a digitally native business.

Adobe was also quick to add a host of tools for marketing, advertising, analytics and content management to its arsenal. Commerce was the only missing piece that they needed to have a complete digital commerce offering. Magento’s acquisition is made to fill that void.

Also, in the past couple of years competitors like SAP, Oracle, ‎Salesforce, etc. have been acquiring eCommerce platforms one after the other.

In the recent past, Adobe was also in the race to take over Demandware, but the deal did not get through. Salesforce, clinched the deal with Demandware leaving Adobe with the need for a commerce offering and hence, the Magento acquisition.

Brad Rencher, Executive Vice President and General Manager, Digital Experience, Adobe said in the press release announcing the acquisition, “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,”

Why Magento of everything else?

Magento is a household name in the eCommerce industry and is also a market leader. Magento started off powering online startups and as the product matured, it was able to meet the needs of medium and large scale enterprises’ eCommerce demands. It further strengthened its position by offering cloud-based solutions and addressing B2B customer needs. All the good work that Magento was doing was getting recognized by the customer community as well as by Gartner which ranked it as one of the leaders in Magic Quadrant for Digital Commerce for 3 consecutive years along with SAP Hybris, Oracle, IBM, Salesforce. Even Forrester recognized Magento as a leader in offering B2B Commerce Suites for Midsize Organizations.

All these factors put together makes Adobe’s acquisition of Magento a strategic move. To quote Brad Rencher, “As we looked at our current portfolio of Adobe Analytics, Advertising and Marketing cloud offerings, we saw an opportunity to add a next-generation commerce capability to Adobe Experience Cloud. One that could serve both B2B and B2C customers, across physical and digital goods, and provide the flexibility to scale to serve mid-market and large enterprise customers.”

What we can expect from the acquisition?

Magento could become a part of the Cloud Experience

Adobe and Magento jointy serve few big names in the retail industry. Post this acquisition, these clients could possibly get a unified commerce experience that has the best of Magento and Adobe.

Adobe has some big brands like Coca-Cola, Warner Music Group, Nestlé and Cathay Pacific in its client list. Bringing Magento on board will enable Adobe to integrate ecommerce into their existing content creation, marketing, advertising and analytics capabilities. “Embedding commerce into the Adobe Experience Cloud with Magento enables Adobe to make every moment personal and every experience shoppable.” said Brad Rencher.

For existing clientele that use both Adobe and Magento, instead of having to deal with two different companies, they can deal with a single entity.

Magento’s open-source status might remain

Adobe might retain the open-source status of Magento. It would help Adobe to onboard existing Magento players on to its Experience Manager and suite of other content offerings. As a result, Adobe would be able to reach out and expand its presence amidst small and medium enterprises. The SMB players who have not been exposed to Adobe’s offerings until now might be able to try Adobe’s other offerings. Magento might be able to extend its service to big names that Adobe is already servicing.

Magento’s user experience might improve

Adobe’s design and content prowess might brush on the future updates in Magento making it more intuitive and user-centric, just what Adobe is popular for. This could possibly turn Magento into an upscale commerce platform that has the finesse of Adobe products. That said, we can expect more retailer migrating to Magento to take the dual benefit that Adobe + Magento combo offers.

We will have to wait and see how things will shape out in the coming days.