In the next 10 years internet is going to change dramatically. After yesterday it’s even clearer than before that Adobe has a stronghold on it, regardless of how the web pans out. We’ll see the internet becoming smarter, more social and of course more reliable. Now Adobe has the toolset to drive that change on its own terms. And it’s the only company in the world who really can say that.
Putting together a platform that combines production and management, analytics and optimization is a huge step forward. Imagine the designer who can now see a/b test results in matter of minutes without having to work for it. Or business application developer getting the insights from all previous applications before starting to build a new one. All within the platform they already learned to love. The proposition of having instant feedback for your actions before and after taking them is a powerful one. An unified online business platform will have the chance of delivering that.
As much as the above examples may be years ahead from yesterday’s event, Adobe now holds under one roof a power-set that will make a big difference for everyone. Obviously, paying $1.8 billion is not a guarantee they will put Adobe’s and Omniture’s technologies together in a integral and meaningful way. In today’s web/IT world, money is abundant but certain technological barriers remain.
Perfect Match on Paper Maybe, But Could Adobe and Omniture Be Any More Different?
Adobe is known as a design company, fueling creativity across the web with its wonderful Creative Suite. Flash and Air have especially helped web developers to think further and wider in terms of how to deliver superior experiences over the web. Adobe customers are happy, swear by their tools and happily spend most of their day using them. Adobe tools are easy to adopt and require no consultation. I’ve seen more than one web developer wearing an Adobe t-shirt, drinking their morning coffee from an Adobe cup or raving about the latest way Adobe made their life just a bit more easier and more fun.
At the Utah side of the fence, things look very different. I’ve had the privilege of meeting dozens of Omniture customers and discussing online analytics with them in great detail. None of them were happy, and only one said they’re 100% satisfied. Omniture is the epitome of traditional engineering driven legacy software. I’ve never heard a sincere recommendation about Omniture straight from the user. To set-up even a simple behavioral goal in SiteCatalyst often requires consultants, IT involvement and the whole nine yards. Difficulty of getting value out of tools doesn’t help anyone’s thinking. Additionally, Omniture has had some serious problems with scaling and keeping up with its near-real-time promise.
But don’t get me wrong here, Omniture is a very powerful tool and they’ve done an amazing job in building a system for collecting meaningful data. I would also imagine that their cookie bank is rather impressive. Their customer’s websites likely touch 99.9% of the commercial internet population. People Omniture haven’t touched, don’t really matter. Omniture has almost 20,000 servers, which makes it a certified super heavyweight in the big-data rings, second only to likes of Google, ChoicePoint and the CIA. Omniture also is one of the smarter companies out there when it comes to understanding developing online business and the online landscape in general.
Putting It All Together
Based on my 14 years of building web applications, I conclude Adobe will have two choices in how to join the two powerful platforms seamlessly together.
- re-create Omniture’s offering from scratch
- go through a painful integration process and find out that they have to re-create Omniture’s offering from scratch (see option a)
Adobe could also forget seamless integration, and just put the two technologies in to action side-by-side only integrated on the surface using APIs. Forget unified infrastructure, common architecture and centralized databases. In theory the user would experience the same value, but Adobe would be looking down the barrel of a shotgun. With huge legacy systems, such as CS and Omniture Online Marketing Suite, integrating even a single feature in the core often comes with serious problems.
But really, the technology integration is just the beginning of it. Think about the cultures in these two companies. The way they’re managed, how they communicate about products and what kind of relationship their employees have with the company. More importantly, what kind of relationships they have with their customers and what kind of relationships those customers have with their tools. Integrating the collective will be far greater challenge than technology alone could ever be. With a system like Omniture’s, Adobe is going to need the Omniture workforce for a long time.
As much as there are hidden problems in this deal, I for one would love to focus on the positive.
- Adobe is the perfect company to take Omniture over. Omniture has lots of data and Adobe has creativity and design. Lots of data + Creativity and design = Analytics Ninjutsu. Behold online analytics folks, we’re moving towards an amazing world!
- Every business will eventually need a unified online business platform that supports all their needs (infrastructure, management, analytics and optimization). Adobe/Omniture is the best combo on the planet to take a huge step towards that platform
- Websites and applications will become better and people will benefit from targeted content and better overall user experience. Nobody likes crappy internet services, and let’s face it, there is plenty around. Holistic web presence tool certainly won’t hurt.
- A new benchmark has been set for M&A in online analytics platform space!
Ok ok, the last one is more for vendors (i.e. myself), but seriously, in this deal everyone wins. Except the next company who wants to acquire an online analytics platform (how many are there really?).
So What Is Adobe Really Buying?
First thing that comes to mind is that Adobe is buying an opportunity to start offering a freemium service that far exceeds the online business offering of Google, thus becoming a serious contender for hegemony in the SME online business category. The Internet is an integral part of business for any company, translating into some serious numbers for those who dominate the market. Having a stake in the holistic SME online business game means to have a stake in the global SME business overall. The Web is going to be a trillion dollar business before we can say “knick knack paddy wack”, and Adobe is clearly not going to stand on the sidelines and wait for it to happen. How do you change the world? You change yourself!
Omniture is already integrated with Adwords and Doubleclick, and Omniture SiteCatalyst compares well against Google Analytics. Now Adobe gets servers and connectivity too. Omniture’s optimization suite is far superior to Google’s website optimizer. Enter the world of Creative Suite and we’re talking about something that will be very hard to replicate faster/cheaper/better even by Google. I personally used Adobe Photoshop 1.0 and it was already awesome. I would spend hours and hours just to figure out all the things I could do with it. I never did that with any Google’s apps. Whereas Google is used to fight for minutes of attention, Adobe users happily spend most of their time in Creative Suite. Omniture has plenty of juice hidden under the hood and all of it is 100% relevant to building, managing and optimizing online business.
Of course, there are so many plays that Adobe could choose, but this is the one resulting in greatest revenue and control. I bet those are two values that rank high in Adobe’s strategic planning. Often when the community makes assumptions of business plays, we tend to think in terms of the immediate future, and through numbers we can see and understand. Smart companies don’t operate like that. JP Morgan makes decisions now for the next century. Panasonic originally started with a 100-year business plan. Adobe is a brilliant company built by brilliant people, and they have the benefit of being able to learn from likes of JP Morgan and Panasonic.
Do I think the price was too high? $1.8 billion for the hold on their future thrown (King of the Internet Business) was a laughable bargain. It may take 10 years to materialize, and it will be incremental, but sooner or later, we’ll be able to look back to this and go “Ah, now I get it!”. As an Analytics Ninja, I’m much more interested to speculate how all this talk about the price will affect Adobe’s share value in the months to come.
One thing is sure, Adobe has many surprises awaiting them. And some of them won´t be pleasant. As much as I’m convinced that Adobe did their due diligence, Omniture’s 12 years and nearly as many acquisitions will be a bitter pill to swallow. Analytics is a dirty business, and Adobe is about to find out just how dirty.