Adobe has made a bold move into the Software as a Service market with the surprise $1.8 billion takeover of Cloud-based web optimisation and analytics firm Omniture.
Adobe's software helps people create, read and share digital material using its Flash technology, used to create and play animated Web pages. By adding Omniture's technology, Adobe's customers will be able to outfit their online ads or other content with software that measures how long and in what way people interact with web pages.
“This acquisition not only aligns two highly-innovative and successful companies, it positions Adobe to provide an end-to-end platform with the power to transform digital media and advertising,” declares Shantanu Narayen, Adobe CEO. “From a business standpoint, the addition of Omniture's SaaS model with recurring revenue, diversifies Adobe's overall business model and revenue profile. Omniture brings recognised expertise in SaaS delivery and go-to-market capabilities Most importantly, from an employee standpoint, we share a culture of delivering innovative solutions to solve real customer problems.”
Those customers have been becoming much more demanding. “What we found is that as we've been talking to our customers, in the conversation with them it's clear that they would like us to do a lot more,” admits Narayen. “For example, the chief digital officers that we talk to at media companies have been telling us that they want to understand which content was performing the best so that they could feature it more prominently and increase their ad revenue.
“Advertisers and agencies were using Flash to produce rich ads but they were telling us that they really wanted to understand what the click-through rates of those ads were in real time, to be able to take more advantage of it. Web developers, who've been using Adobe technologies to create these rich internet applications have said that they want to build intelligence so the site can automatically recommend the best products to drive higher conversion rates.
The next step for Omniture?
Josh James, CEO of Omniture, will be joining Adobe as a Senior Vice President, reporting directly to Narayen. James pitches the takeover as a logical extension of Omniture's game plan with Adobe's reach adding global clout. “The mission of Omniture has been to enable our customers to optimize every digital interaction,” he argues. “By joining forces with Adobe, we will accelerate that vision by improving our ability to integrate measurement into the front end of the content creation process and optimize the user experience for Web sites, applications, advertising, mobile, video, and other emerging digital media. The bottom line, this improves content engagement, advertising effectiveness, and the overall user experience, driving the acceleration of ad dollars from offline to online.
“We set out to change the market for Web analytics and online business optimisation. We believe we have accomplished that. And as we've built out our solution and ecosystem of partners, we have realised there is an opportunity to be a foundational platform upon which companies build their online businesses. Through this combination with Adobe we can be involved with our customers and be their trusted partners for decades to come Adobe has the global operational scale and rates that will enable us to more quickly penetrate new geographies and new markets, like the government and mobile segments, to name a few.”
James is confident that the logic of the merger will be apparent to all. “One of the things that gets us most excited about this relationship with Adobe, this combination with Adobe, is the fact that we're not changing our strategy, we're accelerating our strategy,” he declares. “Together, Adobe plus Omniture will complete the loop of content creation, delivery, and optimisation, enabling our customers to extract more value from their digital content and applications.”
