Adobe Makes Major Acquisition to Enhance Competitive Market Position

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The recent purchase of Magento by Adobe has industry and financial pundits crowing support of the move. The $1.7 billion-dollar purchase positions Adobe to better compete with market giants like Salesforce and Oracle.  Magento is an open-source e-commerce platform originally brought to market in 2008. Its new 2.0 version was released late last year. The Magento platform is popular among small to mid-sized B2B and retail companies and the technology supports more than $155 billion in gross merchandise volume. The newest version was released with an aim to provide new ways to heighten user engagement, smoother navigation, improved conversion rates and revenue generation for store owners.

Magento 2.0 promises to address many of the shortcomings of its previous version.  Compared to its predecessor, 2.0 will run, on average, 20 percent faster resulting in more sales and increases in website search engine optimization. The checkout process is more streamlined allowing customers to navigate quicker through the purchase decision to checkout. Additional extensions and better administrative interface help reduce time spent managing the online store. With more and more consumers utilizing mobile devices to complete their shopping, version 2.0 has an improved look and functionality on mobile devices.

Adobe Systems Inc. says the acquisition is its third biggest and is meant to create an end-to-end system for designing digital ads, building e-commerce websites and other online customer experiences. The company is seeking to diversify from the digital media products that made it one of the world’s largest software companies.

John Bruno, a senior analyst at Forrester, called Adobe’s purchase a fair buy and one that opens a door to a segment of the market Adobe has not served well in the past. “Coupled with really strong growth for Magento, in my opinion, it’s a good buy,” Bruno said. “What’s more, this taps into the existential question of what CRM is—it started out as a sales tool and then came to include marketing automation, customer service and now commerce.”

Magento CEO Mark Lavelle will continue to lead the Magento team as part of Adobe’s Digital Experience business. The acquisition is expected to close in the third quarter, subject to regulatory approvals and other customary closing conditions. While the purchase awaits regulatory approval, each company will continue to operate independently.

For more information on how this important acquisition impacts upgrading to Magento 2.0 and how Junction Creative Solutions can help you navigate to a platform designed to enhance the growth and sustainability of your online store, call 678-686-1125.