Adobe said its $1.68 billion acquisition of Magento will bring the ability to develop shopping experiences based on digital commerce, order management and predictive intelligence to its content creation and marketing analytics tools for both business- and consumer-oriented firms.
Magento, an open source-based e-commerce application provider that was once sold to eBay, is best known for serving the small and medium-sized business segment. In a conference call with investors late Monday, however, Adobe executives said the firm’s technology will let it scale the commerce capabilities of its Adobe Experience Cloud to both mid-market and large enterprise customers.
“We saw an opportunity to add a next-generation commerce capability,” said Brad Rencher, executive vice-president and general manager of Adobe’s Digital Experience business. “One that could serve both B2B and B2C customers, across physical and digital goods, and provide the flexibility to scale to serve mid-market and large enterprise customers.”
While Adobe highlighted existing joint customers in the consumer space such as Coca-Cola and Nestle, Adobe CEO Shantanu Narayen suggested the combination would make Magento’s offering more broad in its appeal to potential customers.
“(Magento) saw in B2B an opportunity to be (a) first-mover,” he said. Some of the potential markets as a combined entity include consumer packaged goods, retail, wholesale, manufacturing and the public sector, Adobe execs said.
Adobe has an existing integration with Magento already, and Rencher said those capabilities will be extended following the acquisition.
“We do think there will be unique capabilities we’ll provide, from the movement you see your first ad to the moment you’re transacting and purchasing a product,” Rencher said, noting that Adobe customers may already be working with other e-commerce providers.
“Adobe Experience Cloud is built as an open platform with all the extensibility and transparency that comes with that.”
According to Rencher, the ingredients of making a great experience includes a mix of content to personalize how a brand approaches its customers, data to understand what’s going on and AI tools such as Adobe’s Sensei to help organizations make more informed decisions.
“Every brand in the world is chasing those escalating demands,” he said, adding that many firms also want to have a more direct relationship with their customers. “The rigidity of the architectures of the past is holding brands and companies back.”
In a blog post, Magento CEO Mark Lavelle said the acquisition will accelerate the firm’s product roadmap while extending its applications into new vertical markets and geographies.
“We’ll deepen our commitment to open, developer-driven experiences,” he said.
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