Conclusion

Clearly, the Adobe’s acquisition of Magento is big news and will impact the market in a number of ways. How exactly – and with what outcome – remains to be seen. As we have seen in the past, the integration of large acquisitions rarely go well, certainly are never smooth, and create uncertainty and risk but also opportunity in the market.

Adobe’s bet is a risky one: after missing out to Salesforce and SAP for Demandware and hybris, they felt they had to make a move to round out their offering with eCommerce. Whether Magento will prove to be the right choice remains to be seen. A lot will depend on how well they can integrate the company and realize synergy, both in terms of operations as well as sales momentum. At first glance this seems like a stretch. Various analysts tout Magento as giving Adobe access to both the SMB space, by moving down-market and tapping into Magento’s installed base, as well as the B2B market. But I can’t think of a single software company that successfully moved from the high-end of the enterprise market to launch a successful SMB offering. Not one. Generally, companies start out serving the lower end and then move up. This is what Magento did successfully and what Shopify is attempting right now. In fact, it could be argued that Adobe did this by acquiring Day and Omniture.

Another challenge will be that the eCommerce software market, like much of the enterprise solution space, is currently undergoing a massive transformation as companies embrace the cloud and SaaS-based subscription models. And there are a lot of eCommerce players with solid solutions on offer, including of course Shopify, but also BigCommerce and recent upstart Core dna, a platform that combines enterprise content management with eCommerce for both B2C and B2B clients. Clients put off by Adobe’s move have several alternatives to choose from. At least until they get acquired too.