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Adobe buys Magento for $1.68 bn, inches closer to tap e-commerce

Adobe Systems Incorporated, a U.S. based software firm, has decided to acquire Magento Inc., an open-source eCommerce tool for a valuation of USD 1.68 billion. It is being speculated that the acquisition will provide Adobe with an eCommerce base that operates across both the B2C and B2B systems.

Adobe’s strategic move is likely to help the company compete against Salesforce.com Inc., a U.S. based cloud computing organization, that provides marketing, sales, and service offerings. For the record the latter had acquired Demandware in 2016 for nearly USD 2 billion to offer a similar portfolio of services to its customers.

The key officials of Adobe have claimed that the deal is likely to be finalized by the end of September this year. The firm is likely to include Magento’s eCommerce platform into its Experience cloud computing tool. Incidentally, Magento commenced business as an open-source online tool that integrated both eCommerce & content management, thereby simplifying operations for small businesses and resulting in a substantially huge demand from the users. The various functionalities embedded in a single cloud application of Magento is likely to help Adobe expand its business.

Reportedly, Mark Lavelle, the CEO of Magento, is expected to lead the Magento team that is going to be continuing as a division of Adobe’s Digital Experience business. However, he is likely to report to Brad Rencher, the General Manager of Adobe. Experts have projected that the acquisition has opened new vistas for Adobe to explore the horizons of the eCommerce business.  They have further claimed that the deal will reinforce the already expanding business relationship between Microsoft & Adobe.

Analysts view the merger to be in lines with the iXsystems & FreeNAS and Automatic & WordPress. The acquisition of Magento is projected to help Adobe provide services to both business-to-business as well as business-to-customer consumers through a single tool.

Dhananjay Punekar: