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Reinventing Adobe

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18 views

Reinventing Adobe

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b02geet
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Reinven ng Adobe

A er 2008 recession, Adobe began its reinven on in 2009 by acquisi on of Omniture to create a new digital
marke ng business unit that offered comprehensive solu on to op mize digital adver sing. In 2012, it
launched Crea ve Cloud (CC) on a monthly subscrip on basis. In 2013, Adobe hit a major bump when it
announced discon nua on of its packaged crea ve so ware and focus solely on CC.
Dealing with the a ermath of 2008 global economic crisis, Shantanu Narayen (President and CEO), Ann Lewis
(Senior V.P. and CMO) and David Wadhwani (Senior V.P. and G.M. of Digital Media), set the plan for a major
strategic shi . They discussed 3 op ons for this – con nuing funding organic growth opportuni es in exis ng
business or “doubling down in desktop” by acquiring so ware companies in other categories or iden fy a
new business that would allow Adobe to move beyond the desktop and PC. Understanding these and the
stagnant growth of exis ng business, the team opted for the last op on.
Acquisi on of Omniture was the first step towards this shi . With this acquisi on Adobe entered digital
marke ng, with op miza on capabili es, allowing customers to realize the full value of their digital assets.
The market’s reac on to this was damp. However, it didn’t falter the team. They were quite posi ve of the
effect this acquisi on will bring. Acquisi ons aren’t easy and we have to work very hard at them, said
Narayen.
Con nuing with the changes, Adobe decided to shi from ‘perpetual license model’ to ‘subscrip on model’.
Understanding the consumer’s behaviour towards purchase of new products, Adobe realised that many of
the exis ng customers are unwilling to buy the newer versions of the services, and due to complexity of the
so ware, new customers aren’t joining. Also, they are dealing with huge losses due to piracy and they can’t
seem to control it. They plan to tackle these by providing a subscrip on-cloud based offering (like
Photoshop). This will prevent the data from piracy threat and also increase the revenue turnaround from bi-
yearly to monthly.
Adobe realigned its business to focus on two primary growth areas—Digital Media for crea ng content
(subscrip on based Photoshop and Adobe Crea ve Cloud) and Digital Marke ng for monitoring its impact
(acquisi on of Omniture and Day So ware). It predicted its Digital Marke ng bookings to go up by 28% and
revenues by more than 20% annually.
The last bold move that Adobe took was announcing the discon nua on of packaged Crea ve Suite services.
It will con nue selling the subscrip on based CS6 product line but its main focus will remain on Crea ve
Cloud. Though the customers weren’t keen on this change and had pe oned against it, a change in
perspec ve can be seen a er MAX Conference when Adobe team explained their reasoning behind it and
the changes that’ll occur.
The decision made by the team was a well-sough-out one, focusing on their strengths and market
opportuni es to stay in the game. Having desktops connected to Crea ve Cloud will allow more freedom to
create and safety from piracy to customers. The subscrip on base system allows customers to choose if they
want a par cular part of the package specifically and paying only for that. The slight fric on will come from
any change in the business strategy but the customer sa sfac on is growing day by day. It is long term project
and the benefits will take a bit more me to see but understanding the market needs and growth, the
decision was a highly required one.

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