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What does Adobe’s Acquisition of Magento mean for the ecosystem?

Karthik Chidambaram
May 23, 2018 |
Adobe Acquisition

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On May 21, Magento had a big announcement for its community – “Mark Lavelle, CEO of Magento announced that Magento will be acquired by Adobe for $1.68B in cash.”

Adobe was one of the top few looking at Magento for many years now. The news is still fresh, and perceptions will change quickly during this time.

There are many questions in mind – what is the history of Adobe when acquiring companies (think Omniture – Omniture had an amazing name brand, I thought, but it’s not called Omniture anymore), what about Magento Open Source, will Magento Commerce be called Adobe Commerce, what about the agencies, merchants and retailers…just when we thought we were coming out of Magento 1 to Magento 2 transition…this happens.

With such questions in mind, I tried to make sense of the happenings. Here are some observations from around the community –

Thoughts from Magento and Mark Lavelle, CEO, Magento

Bard Rencher is his blog mentions that ‘Magento CEO, Mark Lavelle, will continue to lead the Magento team as part of Adobe’s Digital Experience business, reporting to me.’

Thoughts from Adobe

Shantanu Narayen, CEO, Adobe describes the intent of the acquisition like this – ‘Commerce is a part of end-to-end customer experience. Consumers and businesses now expect every interaction to be shoppable – whether on the web, mobile, social, in-product, or in-store. The addition of Magento Commerce Cloud will enable commerce to be seamlessly integrated into Adobe Cloud Experience, delivering a single platform that serves both B2B and B2C customers globally.”

Thoughts from Roy Rubin Co-Founder and Former CEO, Magento

Roy expressed happiness and conveyed his best wishes to Magento and Adobe through this tweet.

How did Wall Street and Analysts respond?

Wall Street responded favourably to the announcement. Adobe shares moved up a bit (0.68) in after-hours trading.

A Business Insider report says that ‘Analysts see it as a ‘sensible extension’ into the digital commerce market and the best option for a move into the $13-billion e-commerce market.

Analysts also think that this acquisition will help it compete against Salesforce & Oracle.

On another note, Magento’s rival Shopify fell as much as 5.5 percent in extended trading following the announcement.

Adobe and Magento – The Commerce Fit

Adobe’s business centers around providing “digital experiences” across three cloud platforms: Adobe Experience Cloud, Adobe Creative Cloud, and Adobe Document Cloud. 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.

Adobe was always looking to fill the eCommerce gap by trying to acquire an ecommerce company, as SAP had acquired Hybris in 2013 and Salesforce bought Demandware in 2016.

What about the Magento Community?

Matt Asay, Head of Developer Ecosystem for @Adobe mentions in his blog that Adobe is committed to open platforms and diverse creative communities.

Matt emphasizes – “The point is: open source, and open development, is in our DNA.”

An interesting article on Magento – Adobe acquisition by Karen Baker brings to fore the anxiety and the concern of the community.

The feeling that pops up is that, once the acquisition is fully done, the Magento Community may not have as much say and hold as it had previously.

Adobe experience cloud has a suite of products – Content Management, Data Management, Email Marketing, Campaign Management, Analytics and more. In the long-term, this could be a boost to the Magento offering, especially for larger business. Without a doubt, there will continue to be dynamic evolution within the Magento eco-system for years to come.

Future plans

Brad Rencher, EVP at Adobe, outlines the immediate future in his blog, “The acquisition is expected to close in the third quarter, subject to regulatory approvals and other customary closing conditions. Until the transaction closes, each company will continue to operate independently, and once the deal closes, we’ll be able to share more details about the integration plans and service offerings.”

Final Thoughts

Here is DCKAP’s observation on the acquisition

A lot of companies have built successful businesses with Magento. The ecosystem of Magento is close-knit and unique. This presents agencies, technology partners and the Magento community to be a part of the larger Adobe ecosystem and expand boundaries. This would, in turn, mean more and rewarding opportunities for all of us. The core product offering of Magento and its cloud offering may also get stronger with this acquisition.

Wishing Magento and the Community the very best to embrace this change, make the most of it returning great value to merchants.

Image Courtesy: MagentoEugene Tulika

Karthik Chidambaram

Karthik Chidambaram is the Founder & CEO of DCKAP. He bootstrapped the company from his small apartment in Chicago, Illinois. DCKAP simplifies commerce for distributors. DCKAP was started with 2 people, 2 computers and 2 desks and is now a global and distributed team. Karthik reckons industry setbacks and renders solid & practical solutions to organizations. He holds a Master’s Degree in Computer Engineering from Illinois Institute of Technology, Chicago. You can read more about him on his personal blog here.

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