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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
— Mark Lavelle (@mklave1) May 21, 2018
— Magento (@magento) May 21, 2018
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.
I couldn’t be more proud of the achievements made by the incredible Magento team and couldn’t be more thankful to Magento’s community for this fantastic journey. Wishing Adobe much success in the years ahead! https://t.co/6rg0P9T5yP
— Roy Rubin (@royrubin05) May 21, 2018
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.
— Cindy Zhou (@cindy_zhou) May 21, 2018
Analysts also think that this acquisition will help it compete against Salesforce & Oracle.
.@SAPHybris, @Sitecore, @episerver, @Oracle, and @IBM just watched their #eCommerce advantage versus @Adobe go out the window. Somewhere, @Benioff just screamed at his M&A team to go buy him a #WCM company. Now! #Adobe+Magento cc @magento
— Scott Liewehr (@sliewehr) May 21, 2018
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 emphasizes – “The point is: open source, and open development, is in our DNA.”
— Matt Asay (@mjasay) May 21, 2018
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.
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.”
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.