Adobe announced that they’ve entered into an agreement to purchase Omniture yesterday afternoon. Once the news broke, many analysts and industry insiders started to question why would Adobe, a software company, want Omniture, a web analytics company? Well, there are two good reasons:
Reason #1: It is good for Adobe
From Adobe’s perspective, the Omniture acquisition expands Adobe’s current revenue model, which currently relies on new software releases to improve overall revenue numbers. To reduce revenue drop offs or inconsistencies, Adobe has been selling a Web Conferencing solution called Connect Pro. So far, Connect Pro has fulfilled its promise of generating revenue on a more regular basis because it is offered on a subscription or pay-per-use basis. Since Omniture is also sold on a subscription or pay-per-use basis, Adobe now has a second offering that further stabilizes their revenue model.
Secondarily, Adobe is already interacting with enterprise clients through their Scene7 web publishing solution. By adding Omniture to the mix, they can easily cross-pollinate their sales pipelines by trading Omniture and Scene7 leads. Additionally, Adobe can lock in enterprises by offering discounts to big brands that use both products. A perfect example of such client is Macy’s, who is using both Scene7 and Omniture.
Reason #2: It is good for Adobe’s Customers
Adobe serves productivity workers, which include web designers, technologists and marketers. From the web marketers perspective, they want to gain additional insights into the behavior of their website and eCommerce visitor. By measuring and analyzing this behavior, marketers can identify new opportunities to increase online channel revenue. This requires marketers to interact with technologists who integrate tools like Omniture web analytics with a website or web application. The work isn’t trivial but through the acquisition Adobe can now simplify the integration process. And as more people move to the web, especially to transact or purchase items online, you can bet that the demand to “close the feedback loop” will increase and Adobe (who now has a solution) can address this need. Now that’s forward thinking!
What’s the future for Omniture and Adobe?
Adobe has not provided any specifics for the near term (gosh the acquisition is only a few hours old at this point). For starters, acquisitions are rarely smooth processes so it may take some time for Adobe to bring Omniture into the fold.
At this point, most analysts are thinking that we’ll find tighter integration between Omniture and Dreamweaver. While that’s a possibility, it doesn’t make a ton of sense since Omniture is an enterprise class product yet Dreamweaver is not targeted at enterprises. Instead, I expect that we’ll see tighter integration with:
- Omniture and Scene7. Both are offerings focused on large brands so there’s additional synergy by coupling these solutions.
- Omniture and Flash/Flex. Flash penetration is incredibly high on PC’s worldwide and it is used to deliver rich interactive experiences both within and outside of the web browser. By enhancing the current integration between Omniture to Flash, Adobe can solidify the dependency of enterprises on Flash and thwart competitors, like Silverlight by Microsoft.
- Omniture and ColdFusion. ColdFusion Application servers was formerly popular platform used to power scalable, enterprise websites. While this offering was ignored for quite a while, Adobe suprisingly revived this solution recently when it announced Coldfusion 9 beta. With the resurrection of ColdFusion, one can imagine that Adobe may try to co-market ColdFusion and Omniture as a complete platform that allows enterprises to build better websites and measure their impact.
Anything else that we can learn from this acquisition?
For the better part of last year and most of this year, we’ve all been concerned that the economy is not doing well. There’s been talk of green shoots, or little signs of a recovery, emerging but nothing that’s real definitive. Adobe just plunked down $1.8B for a Web Analytics company; it hasn’t done that since they bought Macromedia 4 years ago for $3.4B. That’s no small change so the acquisition is proving that we’re turning the corner on bad times.
