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In an attempt to capture a larger percentage of the online retail market from Saleforce.com Inc. and Oracle Corp., digital software provider Adobe Systems has agreed a $1.7bn deal to buy eCommerce giant Magento Commerce.
The aim of this merger is to seamlessly integrate the hugely successful Magento Commerce Cloud into the existing Adobe Experience Cloud; something that will deliver a powerful single platform with the ability to service both B2B and B2C customers around the world. The deal is expected to close in the third quarter of Adobe’s fiscal year, pending regulatory approval.
The integration of the hugely successful Magento Commerce Cloud into the existing Adobe Experience Cloud is something that will deliver a powerful single platform with the ability to service both B2B and B2C customers around the world.
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Adobe is one of the industry leaders in designing digital experiences through content and data. Their customer base has grown to expect an exceptional user experience that is both intuitive and personalised to their requirements. These same customers also now expect the option of transacting with a brand at almost every interactional level, whether this is on a desktop computer, mobile device or in store.
The purchase of Magento will allow Adobe to offer digital commerce and order orchestration across a huge range of industries thanks to the platform’s proven, scalable technology. Magento Commerce will provide businesses with the ability to iterate their eCommerce offering for their own specific business needs.
Brad Rencher, Adobe’s executive vice president and general manager, said “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. Embedding commerce into the Adobe Experience Cloud with Magento enables Adobe to make every moment personal and every experience shoppable.”
The graphic below shows the obvious absence of an eCommerce solution and how Magento Commerce will significantly bolster Adobe’s offering:
Magento was originally developed with the goal of providing quality software to build and run eCommerce stores including the ability to handle online purchases, shipping, returns and more. As an organisation, it has recently come under pressure from rival platform Shopify, a more straightforward selling option that has gained interest from smaller business owners who simply want to start selling quickly and are not interested in understanding the unique nuances Magento can offer.
It’s fair to say that this acquisition could see Magento strengthen its position at the top of the eCommerce tree – shares in Shopify fell by 5.5% following the announcement of this deal.
Magento has been through a number of previous acquisitions, but none as promising as one with a world-leading software provider such as Adobe.
Our eCommerce Solutions Architect, Adam King, had this to say about the news: “Magento has been through a number of previous acquisitions, but none as promising as one with a world-leading software provider such as Adobe. This new chapter for the world’s number one eCommerce platform will allow Magento to harness Adobe’s cloud-based technical skills, robust software development processes, dynamic innovation and global business reach. This isn’t another acquisition for capital gain, but rather Adobe’s foresight that eCommerce provides a bright future which is further enhanced with Magento as its asset.”
Magento has also recognised the great business potential that this deal with Adobe could bring. Their extensive client portfolio already features industry-leading brands such as Rosetta Stone, Canon and Christian Louboutin. Adobe currently works in tandem with Magento across a similarly impressive existing customer base including the likes of Nestlé, Coca-Cola and Warner Music Group.
“Adobe and Magento share a vision for the future of digital experiences that brings together Adobe’s strength in content and data with Magento’s open commerce innovation,” said Mark Lavelle, CEO, Magento. “We’re excited to join Adobe and believe this will be a great opportunity for our customers, partners and developer community.”
Adobe will continue to trade independently until then and are confident this is the acquisition that will provide them with entry into the mid-to-large corporate customer market they have yet to fully explore.