Adobe Acquired Magento: What’s next?

In 2016, Salesforce acquired Demandware for the lofty sum of $2.8 billion. This week it was announced that Adobe acquired Magento for $1.8 billion. eCommerce represented a giant gaping hole in the strategies of both Salesforce and Adobe, who are bitter rivals on the world’s marketing stage. Both companies offer management tools to businesses that initially fell short of actual commerce. When you throw in Oracle, who already had a commerce solution in place, this heightened the urgency around some very strategic and buzzworthy acquisitions. It took two years for Adobe to counter with their own move, but here we are.

For reasons I’ll get into below, I’m very interested in how this is all going to unfold over the next few months and years.

For the acquisition to go through, Adobe had to have taken a close eye at the existing merchant size that’s currently on Magento — and approved of it. Considering the average size of businesses that utilize Adobe’s Enterprise-level services, their definition of “Enterprise” should take a more downstream approach while boosting Magento’s upstream pursuits. Still, a dual focus on both ends of the market spectrum can prove tricky for brands looking to shore up their messaging among merchants of any size.

Although Magento routinely boasts the large businesses that call their platform home, there’s only a certain number of those to fight over. The real prize that allows the most amount of growth for eCommerce platforms is the coveted mid-market. Even that term has a different definition of merchant size depending on who you talk to, but it’s safe to say that the 5-50 million dollar merchant is going to be the “belle of the ball” for some time to come. Since that range also includes stores that are offer pure or expanding versions of B2B, their inherent technical requirements are under close scrutiny.

So how will the Adobe acquisition of Magento affect these merchants?

For one thing, Magento will now be able to market itself in areas it just hasn’t had the capital to explore. With Adobe’s deep pockets, expect to see Magento have an even bigger presence in the eCommerce arena, turning the heads of merchants it hasn’t attracted before. Adobe has already established itself as an advertising juggernaut in the way it has achieved saturation of its own suite of services.

Magento, along with other popular eCommerce platforms, just has not had the huge marketing war chest of companies like Shopify. When you’re outspent 10-1 on marketing dollars, that makes an obvious impact on the attention you’re getting. Ultimately, we’ll start to see a true steak-versus-sizzle competition.

When any platform yells, “You can do anything you want on our platform!” long enough, enough incredulous mid-market business owners will raise an eyebrow and tell them to prove it.

For new and existing Magento merchants, the possibilities of what Adobe brings to the table from a technological standpoint are intriguing, to say the least.

Adobe has been leading the charge on AI-infused product personalization efforts, which is fast-becoming a staple of eCommerce. In his letter announcing the acquisition, Brad Rencher (EVP and GM of Digital Experience at Adobe) wrote, “Consumers and businesses now expect every interaction to be shoppable – whether on the web, mobile, social, in-product or in-store. This is the future of commerce – Experience-driven commerce.”

For merchants looking to bring a more authentic and personable approach to the online experience they offer customers, this is something to keep your eye on. For Adobe to not infuse Magento with the advancements they’ve already spearheaded, it would be a tremendously wasted opportunity. Specific customization is one of the main ways to compete with Amazon’s more general option restraints, but that’s a subject for another blog post.

It will be very interesting to watch how the Adobe Experience Cloud will affect Magento, who has established its own cloud offerings on the back of the aforementioned Amazon. Adobe’s cloud offerings already come with data analytics and management solutions, which will be an interesting complement to Magento’s own Business Intelligence services. When Magento made the decision to move their core business to the cloud, it was a massive sea change that blew up the cottage industry of third-party hosting providers. With the acquisition, we should keep a close eye on how this affects other marketing automation and email platforms, which Adobe already features. The company has prided itself on an “all-in-one” approach to services, and I don’t see them changing that approach anytime soon.

Definitely some interesting times ahead in eCommerce as the “platform wars” continue to play out. What are your thoughts on the recent developments and where things are going?

–      Eric