Home > LATEST NEWS > Adobe to acquire Magento for $1.68B

Adobe to acquire Magento for $1.68B

Spread the love
 

Adobe announced today that it was acquiring Magento for $1.68 billion. 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.

It should also help Adobe compete with Salesforce, which offers its own marketing, sales and service offerings in the cloud and which bought Demandware for more than $2 billion in 2016 to provide a similar set of functionality.

Brent Leary, who owns CRM Essentials and keeps a close eye on the intersection between marketing and CRM, says this fills an obvious hole in Adobe’s Experience Cloud.

“Now they have an offering that allows them to close the loop with consumers, who are able to finalize a digital transaction that started online with digital marketing tools Adobe already offered,” Leary explained.

Leary also sees this deal bringing Microsoft and Adobe, who have already announced partnerships in the past, closer together.

“But maybe even more interesting may be how this may further the relationship Adobe has with Microsoft. As they also are missing an e-commerce piece to their customer engagement platform [as well],” he pointed out.

Leary speculates this could lead to an even deeper relationship between the two companies as they are each battling Salesforce.

Salesforce is the 10,000-pound gorilla in this space with revenue across its various clouds reaching more than $8 billion last year. The company is on a run rate to exceed $10 billion in 2018. It has set a long-term company goal to reach $60 billion in annual revenue by 2034.

Leary says this isn’t necessarily the perfect deal because up until now Magento has concentrated on SMB customers, whereas Adobe’s target audience is clearly the enterprise.

If you look at the other players in the space who have already taken the e-commerce platform plunge, Salesforce got Demandware and SAP got Hybris, which were geared more to the enterprise target demographic, but he believes it was simply a case of the best option available.

But Cindy Zhou, VP and principal analyst at Constellation Research says Magento has some big-time customers too. “Magento has become the commerce platform of choice for many big and mid-size companies including Coca Cola.

There is great synergy for Adobe to complete the customer journey,” she said. “From my perspective, the marketing-to-sale insight potential is what’s exciting,” she added.

This isn’t the first time the company has been acquired. Magento was founded in 2008 and purchased by eBay in 2011 in a deal reported to be just $180 million. The company went private again in 2015 with help from Permira Funds, which sources say paid around $200 million.

Today the company sold for almost $1.7 billion. That’s a hefty increase in value since that 2011 purchase and a tidy five times return for Permira, which brought in Hillhouse Capital Group last year as a fellow investor.

At the time, Hillhouse invested $250 million in Magento;  presumably, it will see a nice return on its investment in just one year, too.

TheTechTea
TheTechTea is an indian online focusing on the tech industry. TheTechTea specifically reports on the business related to tech, technology news,Gadgets news analysis the latest trends in tech, and profiling of new tech businesses and products.

7 thoughts on “Adobe to acquire Magento for $1.68B

  1. I’m not sure exactly why but this site is loading extremely slow for me.
    Is anyone else having this issue or is it a problem on my end?

    I’ll check back later on and see if the problem still exists.

     
  2. Hi there! I know this is kinda off topic but
    I’d figured I’d ask. Would you be interested in trading links or
    maybe guest writing a blog post or vice-versa?
    My website addresses a lot of the same subjects as yours and I believe
    we could greatly benefit from each other. If you’re interested feel free to shoot me an e-mail.
    I look forward to hearing from you! Awesome blog by the way!

     
  3. Hello there I am so happy I found your site, I really found you by error, while
    I was browsing on Digg for something else, Regardless I am here now and
    would just like to say thanks a lot for a remarkable post and
    a all round thrilling blog (I also love the theme/design), I don’t have time to read it all at the moment but I have bookmarked it and also added in your RSS
    feeds, so when I have time I will be back to read
    more, Please do keep up the excellent work.

     
  4. I’m not sure the place you’re getting your information, however great
    topic. I needs to spend some time studying much more or figuring out more.
    Thank you for fantastic information I was on the lookout for this information for my mission.

     
  5. You could certainly see your expertise in the work you write.
    The world hopes for even more passionate writers such
    as you who are not afraid to mention how they believe. All
    the time follow your heart.

     

Leave a Reply

Your email address will not be published. Required fields are marked *

Translate »