Omniture announced this week that it is being acquired by Adobe. My first reaction was surprise, not because Omniture was being purchased but that Adobe is the purchasing party.
At face value this appears to be a very strange match indeed.
Adobe sells real world software to creators of real world and digital media. Their software predominantly sells under licensing as once-off costs while upgrades require further payment. They have a very big continuous development requirement and very little data warehousing needs (in comparison to Omniture). Adobe also has a vast network of resellers, training institutes and support mechanisms in place where clients can find after sales service and help without relying on Adobe.
If it wasn’t for their acquisition of Macromedia in 2005 I wonder if they would ever have looked at Omniture as a potential acquisition?
Omniture on the other hand sells Software as a Service, meaning you don’t get a CD! Upgrades on many of their products come “free”, but you have monthly costs and mostly yearly renewable contracts.
They continuously develop their products but no where close to the extend that Adobe does. They have massive data warehousing and processing requirements for processing all the data made available via their analytics platforms.
Omniture’s made their fair share of acquisitions since their IPO in June 2006, acquiring many of their competitors as well as growing their product offering with related products.
Omniture has a good partner network, but have tried to keep sales, training and support close their chest with very few partners truly set up to deliver these after sales services. Potentially one of their key faults at the moment.
Will the match start a fire?
Adobe definitely believes that this acquisition will spark something – they are paying $1.8 billion for Omniture, 45% above their average stock value for the last 30 days. This is Adobe’s biggest acquisition since they acquired Macromedia for $3.4 billion in 2005.
The true value in Omniture’s products lay in their ability to provide marketers with insight into their marketing activities, enabling them to make better decisions about their marketing Dollars.
Adobe’s products allow designers and developers to create visually appealing and engaging platforms – not all in the digital space.
Adobe cites the following as a key factor for acquiring Omniture:
“The combination of the two companies will increase the value Adobe delivers to customers. For designers, developers and online marketers, an integrated workflow—with optimization capabilities embedded in the creation tools—will streamline the creation and delivery of relevant content and applications.”
Having worked in the online space for the last 12 years, there is one thing I know intimately – marketers and developers don’t sit around the same fire at the best of times.
Perhaps the integration, or at least the gap between these two product sets closing, will help?
However, there is much that Adobe will have to pull out of their hats to get the opposing sides to the fire:
- Seamless integration – Their development products will have to become very smart in the addition of Omniture’s products
- Education – Designers/Developers will have to be educated about the benefits of the Omniture suite of products.
- Product cost/licensing - They will have to solve the sales and licensing complexities and differences that come with Omniture. Adobe’s sales are easy, you buy a product at a set fee and can upgrade for a certain time frame. Omniture on the other hand has extremely complex pricing models.
At worst, this acquisition won’t go up in flames! Adobe’s acquiring a business with an extensive partner network, continuous stream of contracted income, more than 5000 clients with a large number in the top 500 companies in the US and some correlation to their digital products.
Wildfire or slow burning coles?
I suspect the immediate impact will be minimal. In the medium term we may find it easier to integrate analytics with websites and other digital content using Adobe’s suite of products and in no way will Omniture’s products become exclusive to Adobe’s.
In the long run we may see the need for a developer to think and for a marketer to give a clear instruction replaced by intelligent software that knows what you want to accomplish and then does it for you. Wait a minute, this sounds too good to be true…
I don’t foresee this acquisition revolutionising our lives any time soon!