When I first heard that Adobe (ADBE) was to acquire ecommerce platform Magento for a cool $1.68 billion and watched Shopify's stock (SHOP) quickly drop -5% in reaction to the news, my first instinct was that Shopify finally had a viable new competitor.
But I quickly realized I was thinking as a consumer and small business owner and not as a behemoth corporate enterprise and my eyes began to widened. Considering we develop for Shopify, suggest our clients use it and host our Victory Creative website on it—where you're reading this right now—I hope you can cut me some slack!
But while Adobe may wish to take marketshare away from Shopify, there is a another ecommerce business that Adobe's eyeing more directly: Demandware. In fact, Adobe's been eying Demandware for years and as recently as July of 2016 tried to acquire Demandware, only to lose out in a bidding war to Salesforce (CRM) who spent over $1B more than Adobe is spending on Magento.
Salesforce, also owner of Radius6 (RIP), Heroku and recently acquired services connector MuleSoft, is going to be hard pressed to compete with Adobe on the enterprise level as it continuously and effectively is expanding its portfolio of creative, marketing and ecommerce products.
But unlike Demandware, which skews corporate by running a less accessible pay-to-play style platform with a steep barrier to entry (I’m talking steep, like starting at around $200k for a license steep), Adobe has a unique, time-tested ability to toe the line between corporate and consumer user bases. Which brings me back to the super reasonably accessible Shopify platform.
In comparison to Magento, the most powerful attributes that Shopify has going for it are:
- Great branding
- The perceived offloading of data security to Shopify's cloud hosting
- Turnkey, rapid deployment
- Great marketing to designers and developers
Keep a close eye on how Adobe remaps the direction for the future of Magento:
- Will Adobe keep Magento open source?
- Will Adobe maintain Community Edition, Enterprise Edition and Enterprise Cloud Edition versions, expand or streamline?
- Will Adobe roll out a new version of Magento or enhance the Enterprise Cloud Edition to directly compete with Shopify
- Will Adobe rebrand Magento ("Adobe Mage" or simply "Adobe Commerce", anyone?)
- Will Adobe fix the unfocused, cumbersome Magento website (call us, we would love to help!)
My bet is that Adobe will chip away at Demandware’s corporate foothold while bringing some of Shopify’s best consumer and designer/developer friendly attributes to Magento. I see a huge advantage to Adobe as the familiar, beloved name brand to a wide range of creators, from students designing their first graphic to Ecommerce Directors at behemoth corporate enterprises (who have long histories of signing SLAs with Adobe, by the way).
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Tell us what you think. We would love to hear your reaction to this acquisition of Magento by Adobe or other digital marketing and ecommerce news and ideas.
Founder, Director of Victory Creative Inc