What does Adobe’s acquisition of Magento Commerce mean for the digital experience market?

Profile picture for user barb.mosher By Barb Mosher Zinck May 24, 2018
Summary:
Adobe's acquisition of Magento prompted a flurry of news stories. But does this mark the return of the suite? Or is an "experience platform" a different thing altogether? Barb looks at how Magento fits into Adobe's plans.

professor-questioning
Everyone is talking about Adobe’s newest acquisition - e-commerce software provider Magento Commerce. The acquisition completes the list of capabilities a digital experience platform needs to provide an end-to-end customer experience. One platform to rule them all. I feel like we’re going back in time.

Are the suites back in vogue?

Remember that suite versus best-of-breed battle that went on not that long ago? We thought it went away, and the focus finally shifted to building your stack with the right products and solutions to meet your needs.

Most web experience -> digital experience vendors (sometimes called customer experience solution vendors) - tried to build the platform and found they needed to offer a path that enabled a company to cherry-pick what parts of their platform they wanted to use. Digital commerce was typically one of those pieces selected as a standalone solution.

But at the same time, many of these vendors hung on, slowly building their full-service platforms and while maybe not forcing customers to go the full route, certainly provide incentives to do so. Adobe is not only experience platform vendor to want to offer it all. Sitecore, Salesforce, SAP, and Episerver have all built experience platforms that "offer it all."

The suite is back in vogue - we just don’t call it a suite anymore. It snuck in the back door while we were listening intently to the “open APIs” and “open standards” and “build your stack the way you want” chatter. I blame Marc Benioff.

The convergence of content and commerce

This is not a new story. The need to build better commerce-driven experiences by incorporating content into the shopping site has also been a topic of discussion for at least four years, maybe more.

I remember having discussions on this subject with Sitecore, Coremedia, and Hippo (now Bloomreach), even Adobe. The best commerce experiences are those that leverage content, context, and personalization. Does your commerce solution need to be a part of your experience platform to create these types of experiences? No, but the integration is critical to do it well.

It’s all part of building great experiences for your customers. Disconnected experiences, here and there, don’t work anymore.

Adobe has known this for awhile too; it’s one of the things they promote consistently - a seamless digital experience across channels and devices, including commerce-driven experiences. It is rumored they did try to buy both hybris (acquired by SAP) and Demandware (acquired by Salesforce).

Straddling the fence between enterprise and SMB

I’ve read that the Magento acquisition is interesting because Magento has a strong mid-to-SMB customer base, and a lot of SMB-focused integrators and community developers (Magento, is in part, an open source solution). "Magento is supported by a vast global network of 1,150+ solution and technology partners and by a highly active global community of more than 315,000 developers.”

But Magento also has enterprise customers, Coca-Cola being a notable one. Why would Adobe want a platform that is SMB-focused?

The answer typically has been “Magento is moving into the enterprise market.” But I think you could look at this another way. Yes, Adobe is enterprise-focused, but it also has a solution for mid-small business in Adobe Sites.

The SMB market is massive, and it’s craving the same opportunities to deliver great digital experiences that enterprises are; they just need the right tools. Salesforce is smart enough to focus on both ends of the market - why wouldn’t Adobe? It may not be a bigger revenue generator for Adobe than its enterprise business, but it’s a market worth investing in.

Another deep dive into open source for Adobe

Matt Asay, vice president of mobile for the Digital Marketing business at Adobe, wrote in a blog post on the acquisition:

Active engagement with open source communities and standards has been an increasingly vital tenet of our engineering culture as we become a platform company.

First, I’m inclined to believe Asay. I’ve followed him from his time at Alfresco, to Canonical to MongoDB (there were others in between), and he is committed to open source and building open communities. The fact that is he also “head of developer ecosystem” at Adobe demonstrates Adobe is creating an environment where developers can contribute in important ways.

In an ever-evolving industry, such community becomes mandatory for enterprises who hope to keep pace. What seems cutting edge today becomes table stakes tomorrow. Community-driven development, allowing Magento users to tie into the creative energy of thousands of developers around the world, gives companies unparalleled access to innovation.

Then there’s the "platform company." This is the new word, replacing the "suite." I think it’s worth an article on its own to define this evolution and whether two are the same or something completely different.

Every organization wants to create a unique digital experience that meets the needs of its customers. There is no out-of-the-box way to do it. Sure we need tools that enable non-technical people to help build these experiences, but as Asay writes, we also need tools that developers can leverage to take experiences to new levels:

At a functional level, Magento extends the lead Adobe has already established with its Experience Cloud. But at a more foundational level, the addition of Magento and its developer ecosystem to the Adobe Cloud Platform and its vibrant, open ecosystem of thousands of developer partners that generate roughly 1.5 billion API calls each day, makes a potent match for any developer interested in building customer experiences.

I am not sure Adobe is going to provide that environment where Magento developers will thrive. It’s a nice thought, but we’re looking at different toolsets (Magento is PHP and Adobe is Java) that alone will cause issues. Yes, Adobe is expressing its commitment to open standards in many ways, but it still has a long way to go.

What does it mean for the digital experience market?

I titled this piece “What does Adobe’s acquisition of Magento Commerce mean for the digital experience market?” Now Jon may have changed that to create a much better title (as he usually does), but it’s a question worth asking anyway.

To succeed as a digital experience vendor, do you need to offer everything in a neat little package (or at least appear to have a neat little package)? Or will those that choose to focus on their niche, preferring to be one or two pieces in the bigger experience stack stand a better chance at wider success across many markets?

To succeed as a company providing digital customer experiences, do you need to go the platform route to enable you to create these experiences quicker and change them quickly to keep up with your fickle customers? Or are you safer integrating key pieces together so you can pull elements of the experience in and out as necessary?

As usual, there is no easy answer. It will depend: on the experience you want to create, on the solutions you have in-house already, on the size of the market and what you can afford… I could go on. There are success stories on either side, as are there horror stories.

Some days I don’t think the digital experience market is evolving as much as it’s coming full circle. What do you think?