How The Acquisition By Adobe Influenced Magento 

by Jan Guardian

It’s been slightly more than 2 years since Adobe bought Magento, a popular ecommerce platform. The deal was a hot topic for discussion in the ecommerce world and beyond it: people couldn’t stop thinking about the possible influence of Adobe on the platform and its customers. While some believed that the takeover of Magento was a bright new beginning, the others thought it was the beginning of the end.

In this article, we figure out how Adobe influenced Magento two years after the acquisition.

About the deal

Back in May 2018, Adobe bought Magento Commerce from a European investment firm Permira, who received $1.68 billion as a result of the sale. The deal was obviously a win-win business solution. It was reported a 5 times more return on investment for Permira, who purchased Magento in 2015 from eBay. As for Adobe, they were in the black too: right after the purchase, the company announced an $8-billion share buyback program by 2021. As the fiscal year is approaching, this projection seems to be pretty realistic according to Adobe’s stock. 

The purchase of Magento was not a surprise for most people in the software industry: they anticipated that Adobe might want to add ecommerce to their service package, just like SAP got Hybris and Salesforce got Demandware, to stay ahead of the competition and to strengthen its positions across the industries. Moreover, Adobe is experienced in acquisitions: they bought 25 companies throughout their history. 

The plus points

Magento 1 is dead, long live Magento 2

This year, Adobe ended support for the 12-year-old Magento 1.x release line for both Magento Open Source and Magento Commerce and directed their efforts in the refinement and modernization of Magento 2. 

Magento 2.0 came out three years before Adobe bought Magento and was considered to be a failure since the released version was crude and full of bugs. Since that time, a lot of bugs have been fixed and a lot of new features have been introduced to make the platform worthy to be named a Leader in the latest 2020 Gartner Magic Quadrant for Digital Commerce report. Being a part of Adobe, the platform was re-engineered from scratch to turn into a quicker, safer, and easier-to-use version. This was achieved by utilizing the following technology stack under the hood:

  • HTML 5
  • CSS3
  • jQuery
  • RequireJS
  • PSR Compliance
  • Full-page caching
  • Varnish caching

Constant addition of new features

Enriched with a broad range of features, Magento 2 has become a powerful ecommerce platform that makes running an online store as easy as a pie for merchants and takes online shopping to the next level for buyers. 

These are just a few of the features Magento 2 users enjoy:

  • Customer segmentation and personalization

Magento 2 store owners can use personalized promotions to target shoppers based on their location, gender, order history, and other attributes to achieve higher conversion rates.

 

  • Checkout

This feature allows customers to create accounts with one click, save their shopping carts to finish the purchase later, and do much more to speed up the checkout.

 

  • Elastic search

Elasticsearch is a powerful search engine integrated into Magento 2 to make the catalog search easier and faster by correcting misspelled words, supporting stop words, offering synonyms, and more.

  • Powerful admin interface

The admin panel in Magento 2 is more user-friendly compared to Magento 1 and it allows for improved navigation and search to facilitate the admin’s day-to-day tasks.

 

  • Payment and shipping

Magento 2 is integrated with multiple payment gateways and allows its users to securely pass credit card information to the payment gateway directly. Furthermore, it offers enhanced shipping functionality.

 

What is great, Adobe pushes consistent delivery of new Magento 2 versions and pleases its customers with the constant addition of new features. In the latest version (being Magento 2.4.1 at the time of writing) they’ve made substantial security improvements, including the implementation of two-factor authentication. What is more, the acquisition by Adobe resulted in the ability to license stock image previews from the Media Gallery directly, thus reducing the time and effort required for this.

Introduction of PWA

As a result of cooperation between Adobe and the Magento team, Magento PWA Studio was introduced. This is a set of tools that allows developers and store owners to create Progressive Web Applications to deliver app-like shopping experiences to their customers. PWA is a next-generation technology that is better than traditional apps in many ways: it’s faster, easier to use, more SEO friendly, and can work without connection to the internet. 

PWA is written in the languages of the web — HTML, CSS, and JavaScript, and allows customers to access a web store from any device and platform. Furthermore, it helps to engage customers more efficiently with push notifications. To make a long story short, PWA is the future of mobile commerce and Magento 2 is a part of that future as well.

Now, let’s reflect on the negative side of the acquisition by Adobe.

The minus points

Concerns about migration and updates

With Magento 1 end of life, migration to Magento 2 is inevitable. On the one hand, migration from Magento 1 to Magento 2 provides merchants with the opportunity to take their stores to the next level and increase their revenue at the end of the day. On the other hand, migration is considered to be too cumbersome by most merchants, since it requires time, money, and assistance from a professional Magento agency

Beyond that, one should not forget about the need to constantly update Magento stores to the latest version and install newly-released security patches to keep it protected from threats. All these things together bother Magento merchants and add a lot more development work and expenses.

Licence prices

Yet another minus point of the Magento acquisition by Adobe is increasing license prices. The price of Magento 2 is calculated according to the web shop’s gross revenue. Since the acquisition, the license cost has grown considerably for all revenue categories. This might frighten the small and medium-sized businesses, who have always been Magento’s target audience due to the cost-effectiveness of its offering. 

Adobe rather focuses on huge companies and enterprises that can afford costly innovative solutions, such as Adobe Commerce Cloud — the result of integration between Adobe Experience Cloud and Magento Commerce offering. This is a SaaS platform for B2B and B2C merchants that offers a range of opportunities for ecommerce business owners at a higher price. As former CEO of Magento Mark Lavelle said, “The integration of Magento into the Adobe Commerce Cloud is a treasure trove of capabilities for the Magento Communities.”

Some worry that Adobe will make Magento cloud-only and get rid of the free Open Source edition. However, Adobe has continuously demonstrated its intentions to move toward the open source direction and has stressed that people’s concerns are unsubstantiated. This way, small and medium-sized businesses continue to be the target audience for Magento, but the acquisition by Adobe allows Magento to move up-market to win over the hearts of big players as well.

What’s next?

Clearly, the acquisition of Magento by Adobe cannot but influence the way the platform is evolving. In the past years, Magento has witnessed a remarkable digital transformation to provide more value to ecommerce store owners, which is definitely a great plus. However, this innovation comes with the rising license cost, which might frighten some customers.

It remains to be seen, however, how the acquisition of Magento by Adobe will change the ecommerce landscape. It’s no surprise if the takeover gives rise to the launch of Magento 3 that will be even more innovative and optimized for both B2B and B2C. 

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