Adobe announced today that it acquires Magento for $ 1.68 billion Purchase gives Adobe the missing part of e-Commerce platform that runs in the context of B2B and B2C, and should fit well into the cloud of experience of the company.
It should also help Adobe compete with Salesforce, which offers its own marketing, sales and service offerings in the cloud and which acquired Demandware for more than $2 billion in 2016 to provide a similar set of features.
Brent Leary, who owns CRM Essentials and closely follows the intersection between marketing and CRM, says it fills an obvious hole in the Adobe cloud experience. ” They now have a proposal that allows them to close the loop with consumers who can complete a digital transaction that started online with digital marketing tools already offered by Adobe, ” explained Leary.
Leary also sees that this deal brings together Microsoft and Adobe,which have already announced a partnership in the past. “But perhaps even more interesting is how this can contribute to Adobe’s relationship with Microsoft. Because they also lack a piece of e – Commerce for their customer interaction platform [as well],” he said. Leary suggests that this could lead to an even deeper relationship between the two companies as they battle Salesforce.
Salesforce is a 10,000-pound gorilla in this space with revenue in various clouds reaching over $ 8 billion last year. In 2018, the company will exceed $ 10 billion. It has set a long-term goal of achieving an annual income of $ 60 billion by 2034.
Leary says it’s not necessarily a perfect deal, because Magento has so far focused on SMB customers, while Adobe’s target audience is clearly an enterprise. If you look at the other players in the space who have already adopted the e-Commerce platform, Salesforce got Demandware, and SAP got Hybris, which were more focused on the target enterprise demographics, but it felt it was just a case of a better option.
This is not the first time the company has been acquired. Magento was founded in 2008 and bought by eBay in 2011 in a deal that is reported to be worth only $ 180 million. The company became private again in 2013 with the help of Primera funds. Today, the company sold for almost $ 1.7 billion. This is a significant increase in value since the purchase in 2011.
His latest round of funding came last year from private equity firm Hillhouse Capital Group at $250 million, according to Crunchbase. It would seem that he got a good return on his investment in just one year.