Adobe acquires Workfront, makes $1.5bn bet on work management - or does it?

Multimedia and digital marketing software giant Adobe announced yesterday it is acquiring work management pioneer Workfront for $1.5 billion. The price reflects the growth that's currently being seen in the sector, which also includes recent IPO debutant Asana, developer favorite Atlassian, and many smaller, venture-funded players. But with marketing teams taking the lead as early adopters of such platforms, is Adobe simply acquiring an add-on to its existing tools for marketers? Or does it have its sights set on a far bigger opportunity?

When the acquisition closes, Workfront will become part of Adobe's digital experience business unit under Anil Chakravarthy, who was CEO at integration vendor Informatica before joining Adobe in January. Adobe's announcement of the deal emphasized the combination of Workfront with its Experience Cloud to "bring efficiency, collaboration, and productivity gains to marketing teams currently challenged with siloed work management solutions," adding that a third of Workfront's 3,000 customers are already Adobe customers, including Deloitte, Under Armour, Nordstrom, Prudential Financial, T-Mobile, and The Home Depot.

Workfront CEO Alex Shootman, who after the deal closes will report to Chakravarthy, reinforced the marketing focus when he spoke to Bloomberg about the deal:

When you have an opportunity to work with the company that CMOs rely on to run their business, which is Adobe, and you’re a company like Workfront, that takes us forward years in terms of what we would have been able to accomplish on our own.

Workfront is not just about marketing

Yet to characterize Workfront as solely targeting marketing teams doesn't tell the whole story. Take the case of its customer Prudential Financial, where adoption started within the marketing function but has since rippled out to many other parts of the business. Speaking at Workfront's analyst day a few weeks ago, Kevin Brucato, who is not only Vice President of Creative Operations but also chief of the financial services group's 'Future of Work' internal transformation strategy, described how it uses Workfront for onboarding new recruits with integrations into Workday, ServiceNow, Office 365 and Sharepoint. Workfront has become the default platform for automating a whole range of processes that cut across many different applications and functions. He explains:

This allows our users [to] stay in those environments they're comfortable in, but then actually pull the data and move the conversation or the information into one source of truth.

The same pattern of gradually spreading to other functions has been repeated at many other Workfront customers. Creative or marketing teams show what can be achieved by automating and tracking their work and others start to follow suit. Some of its largest customers now use Workfront in over a dozen different functions, after growing usage exponentially over a number of years. Shootman has positioned the company as offering "an operational system of record" that helps businesses help all their people achieve more through smart automation of collaborative work. He says:

We are on a journey to manage human capital in the same way that we've learned to manage plant and equipment.

A double whammy for marketing teams

For sure, there's plenty of scope at the moment for Workfront's services within the marketing teams at Adobe's customers. This year's pandemic has increased the importance of digital engagement at the same time as forcing marketing teams into distributed working away from the office. It's been a double whammy of increased workload at the same time as having to adapt to new patterns of digital teamwork.

This is fertile ground for the likes of Workfront, which has mapped out an entire maturity model for automating work. It's able to offer a level of sophistication in helping teams automate and manage the flow of work that takes them past the inefficiency of endless video meetings and Slack messages. The trick is to both automate processes and start to collect and analyze data about the flow of work itself.

Workfront also has plenty of experience — for example at Under Armour or the marketing team at CenturyLink — in helping Adobe's customers build workflows that span the various components of Experience Cloud along with the assets developed in Creative Cloud. As Paige Erickson, SVP Business Development at Workfront, told diginomica's Jon Reed back in April 2019:

I think Adobe sees it as well, that there's this workflow that needs to happen in between those two clouds, and we are that secret sauce that enables that ...

[For example] If you're in Creative Cloud, you don't have to leave Creative Cloud. You can send the proof of whatever you want to have your manager review through Workfront. They look at it and send it back, mark it up, and that's very seamless. Once you've got to a final, if you've created a campaign or something like that, then you send it over through Workfront, and we'll put that in with our AEM integration, and then you can go ahead and deploy that campaign through Adobe.

But Workfront also has integrations and partnerships with many other vendors besides Adobe, including CX rival Salesforce, ServiceNow, Microsoft and Google. They remain important to the process automation that customers value. Is the opportunity within Adobe's own turf now so great that it's worth narrowing Workfront's focus? Or is there a bigger plan waiting in the wings?

The deal is expected to close in the December to February timeframe, during the first quarter of Adobe's fiscal 2021.

My take

The dangers of a material change of control for a vendor's existing customers are well established. But I find it hard to believe that Adobe will simply throw away Workfront's wider ambitions and confine its remit to the marketing function. For one thing that will risk offending some of Workfront's largest customers, many of whom are also important customers for Adobe. Of course there will be a strong focus on marketing, since that is where lowest hanging fruit can be found in the wake of this deal. But Workfront's experience in moving beyond marketing holds the potential for Adobe to not only consolidate its grip on marketing teams but to then extend its reach across the enterprise.

Remember too that Adobe already has a presence elsewhere in the enterprise through its Acrobat franchise. Go back a decade, and Adobe had ambitions to build that presence into a much broader portfolio of cloud-based productivity tools. Maybe those ambitions will now be rekindled in the wake of acquiring Workfront — and of hiring Chakravarthy — to extend further into the digital teamwork market. If that's the case, expect further acquisitions to follow, most likely in cloud content or perhaps messaging, as Adobe builds out its collaborative canvas to guide the progress of enterprise teamwork.