Adobe is a software company founded in 1982 that has grown to have over 22,000 employees. It offers a wide range of creative and marketing software products through both perpetual licenses and subscription models. Key to Adobe's success has been its numerous acquisitions that expanded its product portfolio and transition to a subscription model that provides reliable recurring revenue. While facing threats from piracy and alternatives, Adobe maintains its dominance through continuous innovation and expansion into growing areas like digital marketing and cloud services.
[Article] “Are you sure it isn’t photoshopped?” - The journey of Adobe
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“Are you sure it isn’t photoshopped?” - The journey of Adobe
A. Introduction
Adobe is one of those rare companies whose product has become a verb. This article aims to take a deep dive
into Adobe’s history and understand what makes the company the behemoth that it is today. The reason for
taking up Adobe was because of a number of factors- the primary being its improvement in ranks over the
years and the fact that I wanted to choose a company that is not ranked in the top 200. This is because of the
human tendency to only focus on the best of the best and generally ignore the underdogs. But Adobe
continuously impresses everyone with its growth and tenacity, and this article aims to analyze everything from
the company’s strengths to weaknesses to the reasons for its success that have transformed it into an
international behemoth it is today.
Currently, it has an excess of 22,635 employees, and its Net Income is US$ 2.95 Bn, and its Revenue is US$
11.17 Bn with operating costs of US$ 3.27 Bn.
Source: Forbes Website
B. History
Adobe, like many other Billion-dollar companies, was founded from the garage of John Warnock, one of the
founders. The company is named after Adobe Creek, which is a 23-kilometer-long stream originating in the
Santa Clara County, California, and it flowed behind Warnock’s home.
C. Growth Drivers (in India and the World)
One of the key drivers of growth for Adobe is the overall growth of Digital Marketing in India and around the
world. Digital marketing is set to increase with improving disposable incomes and internet penetration in India
as well as around the world. This will ensure that Adobe products are used continually, essentially making
them perennial.
Thus, as Digital Marketing and other associated Digital Activities are on the rise and with decreasing attention
spans on the internet, the need for creative Digital Tools is made necessary, which Adobe excels at. This
ensures that Adobe products remain desirable year after year for generation after generation.
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D. Product Division
Adobe has a wide variety of product lines that have enabled it to become the market leader it is today. The
prudent thing to do would be to classify into clusters under which there will be multiple products. Adobe’s
website does this by dividing their entire product category into four broad labels-
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i) Creativity and Design
ii) Marketing and Analytics
iii) PDF and e-Signatures
iv) Business Solutions
These four are further sub-divided into a number of different segments, and the complete product
segmentation is given below-
i) Creativity and Design
a. Design (Notable Products: Photoshop, Illustrator, InDesign, Aero, Adobe XD, Behance,
Dimension, Dreamweaver, Dimension)
b. Photography (Notable Products: Lightroom, Photoshop Elements, Lightroom Classic,
Creative Cloud for Desktop and Mobile, Stock)
c. Video and Audio (Notable Products: Premier Pro, Premier Rush, After Effects, Anywhere,
Photoshop Camera)
d. Web and UX (Notable Products: Animate, Comp, InCopy, Adobe Spark, Spark Page, Spark
Post)
ii) Marketing and Analytics
a. Advertising (Notable Products: Advertising Cloud, Experience Cloud, Media Optimizer and
Dynamic Creative Optimization)
b. Analytics (Notable Products: Analytics, Analytics Cloud, Audience Manager, Experience
Cloud)
c. Marketing (Notable Products: Campaign, Experience Manager, Primetime, Target)
iii) PDF and e-Signatures
a. Documents (Notable Product: Document Cloud)
b. E-Signatures (Notable Products: Acrobat Pro DC, Adobe Sign, Adobe Sign Mobile App, Fill
and Sign)
c. PDF (Notable Products: Adobe Scan, Acrobat Pro 2020)
iv) Business Solutions
a. ColdFusion (Notable Products: ColdFusion on AWS, ColdFusion Standard (2018))
b. e-Learning (Notable Product: Captivate)
c. Enterprise (Notable Products: Creative Cloud for Enterprise, Document Cloud for
Enterprise)
d. Print Imaging (Notable Products: Design to Print, Adobe Embedded Print Engine, Adobe
PDF Print Engine, Adobe PostScript)
e. Technical Communication (Notable Products: Technical Communication (2019), XML
Documentation for Adobe Experience Manager)
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Therefore, it is evident that Adobe has a huge stockpile of products that it uses to maintain its market
dominance over its competitors. The four major areas that are mentioned above cover hundreds and
thousands of businesses and individuals, and Adobe has successfully used that factor to market its products
and successfully reap benefits from it
E. Mergers and Acquisitions
Mergers and Acquisitions are important for an organization not only from a growth point of view but a day to
day as well as a future strategic context point of view. Adobe has, over the years, acquired companies big and
small, it has also acquired companies that were themselves considered as giants. Some of Adobe’s notable
acquisitions are listed below-
Name of Company Acquired on Acquired for (in US $)
Marketo September, 2018 4.75 Bn
Macromedia December, 20015 3.573 Bn
Omniture September, 2009 1.8 Bn
Magneto May, 2018 1.68 Bn
Fotolia January, 2015 .8 Bn
Neolane July, 2013 .6 Bn
Frame Technology October, 1995 .57 Bn
The quintessential and ubiquitous Adobe PDF that we see and use all around us has been made possible
for a number of key acquisitions by Adobe over the years-
o OCR Systems (1992)- The technology by this company made it possible to manipulate the
documents that were scanned into PDF
o Aldus Corp (1994)- This merger helped bring PDF to desktops
o Accelio Corp. (2002)- This company’s server-based technology is implemented in Adobe
LifeCycle Design
o Macromedia Inc. (2005)- Many of Adobe’s PDF features like mobile PDF, media-rich PDFs
or online collaboration would not have been possible without this company
Adobe added Behance to its creative cloud community strengthening further its hold over the industry
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By integrating Adobe Sign (EchoSign) into its ecosystem of products, Adobe ensured that one of the
pain points- the inability to electronically sign PDFs was addressed.
F. Marketing Strategy
Adobe uses a strong content marketing strategy to bolster its position in the industry. The result has been
nothing short of spectacular for Adobe as in 2018, it crossed several key landmarks, the most impressive of
them being exceeding market capitalization of a $ 100 Bn. With its “always-on” marketing, Adobe constant
reviews and analyses marketing data rather than spending crucial time to build the perfect marketing plan.
This allows the company to change whatever is needed while on the go, thereby making it much more Agile.
This policy has enabled the company to craft strategic marketing campaigns, fine-tune these strategies, and
adopt best practices while on the go.
G. Factors that made Adobe Successful
It becomes important to understand the reasons behind the success of Adobe as a company, and that can be
best done by using a couple of tools that help in analyzing the company as a whole.
Competitor Analysis of Adobe
This section analyses the position of Adobe and where it stands along with its competitors. The problem with
a company like Adobe (which is also its strength and competitive advantage) is the fact that no other
competitor offers a diverse bouquet of products that are so uniquely related in a common ecosystem as
Adobe’s. Hence, in order to do a competitor analysis, different companies that belong to different sectors and
segments need to be brought together.
SWOT Analysis of Adobe-
Strengths-
Adobe Autodesk IBM Microsoft Apple Shutterstock Getty Images Dropbox DocuSign Salesforce
General
Founded on 1982 1982 1911 1975 1976 2003 1995 2007 2003 1999
Type of Company Public Public Public Public Public Public Private Public Public Public
Employees
22,6346
%
increase
10,1005%
increase
352,6001
%
increase
144,00010
% increase
137,0004%
increase
11689%
decrease
4,627
2,80121
%
increase
3,90929%
increase
49,00040
%
increase
Valuation (in $) 186.3 b 46.1 b 110.9 b 1.4 t 1.4 t 1.4 b N/A 9.3 b 25.6 b 157.1 b
Alexa Website
Ranking
55 738 865 25 51 N/A 1761 69 4484 159
Employee Rating
(out of 5)
4.0 4.0 3.7 4.3 4.1 3.2 2.9 4.0 4.5 4.3
Financial
Revenue
$11.2b (F
Y, 2019)
$3.3b (FY
, 2020)
$77.1b (
FY,
2019)
$125.8b (F
Y, 2019)
$260.2b (FY
, 2019)
$650.5m (F
Y, 2019)
N/A
$1.4b (F
Y, 2018)
$974m (F
Y, 2020)
$17.1b (F
Y, 2020)
Gross Profit
$9.5b (F
Y, 2019)
$2.9b (FY
, 2020)
$36.5b (
FY,
2019)
$82.9b (FY,
2019)
$98.4b (FY,
2019)
$372.3m (F
Y, 2019)
N/A
$997m (
FY,
2018)
$730.7m (
FY, 2020)
$12.9b (F
Y, 2020)
Net Income
$3b (FY,
2019)
$214.5m (
FY, 2020)
$9.4b (F
Y, 2019)
$39.2b (FY,
2019)
$55.3b (FY,
2019)
$20.1m (FY,
2019)
N/A
($484.9
m) (FY,
2018)
($208.4m)
(FY,
2020)
$126m (F
Y, 2020)
Funding Raised N/A N/A N/A $ 1m $ 6.2b N/A $ 600m $ 1.8b $ 552.5m $ 65.4m
Companies
Points of comparison
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One of Adobe’s key strengths was its ability to transition from a perpetual licensing system to a
subscription-based licensing system. This led to an increase in their Annualized Recurring Revenue
or ARR which will help provide the company with reliable cash flows in the future
Adobe products are used and preferred all over the world, thereby adding to its brand equity. Its
strong global presence can be rivalled only by a few of its competitors. In fact, few of Adobe’s
competitors have been able to consolidate a vast array of products under its portfolio like Adobe has
Adobe distributes its offerings through a network of value-added resellers (VARs), original
equipment manufacturers (OEMs), a detailed network of distributors and independent software
vendors (ISVs)
Adobe has an almost pure monopoly when it comes to designing, as Photoshop overshadows its
competitors by miles. Similarly, Adobe caters to the film industry, the web development industry, and
the video game industry, to name a few.
The Adobe brand has been growing over the years and is now perceived to be a trusted one amongst
designers and other users. It has steadily captured the market share by defeating all of its rivals.
Weaknesses-
The primary weakness of Adobe is its high price that deters many potential customers due to which
Adobe products are sold more in developed markets and less in emerging ones
Poor customer service is also one of the key weaknesses of Adobe
Adobe’s poor presence in the video animation industry, especially in 3D modeling is also a potential
weakness as it is just left out to competitors to grab
Opportunities-
With increase and growth in industries like Digital Marketing, PR, Branding, and a host of other
industries, Adobe still has plenty of room to grow and expand globally
With increasing demand in cloud computing, and coupled that with the subscription model can lead
to increased profitability for the company. Adobe Creative Cloud Desktop Apps are a set of Adobe
Products that give the user control to a set of applications that have optional cloud services as well.
Adobe needs to expand on this cue
Adobe and Microsoft have entered into a strategic alliance wherein each company will help the other
in transforming businesses globally by leveraging the latest developments. Adobe has chosen
Microsoft’s cloud platform Azure as its preferred choice for its cloud offerings- Adobe Document,
Creative, and Marketing clouds.
Source
Threats-
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The major threat for Adobe is the threat of piracy due to the thriving torrent sites and peer to peer
networks. This severely harms the company as it essentially is robbed of its revenue. This mostly
happens in emerging markets like Russia, Africa, Pakistan, and India, to name a few.
There are several substitutes of Adobe products that are either free or cost minimal to purchase. Some
of the best Photoshop alternatives are- Luminar, GIMP, Pixlr, Paint.NET. There are alternatives to
other
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Security Threats are another set of worries that Adobe has to carry around with it all the time. Adobe
has a lot of information about its customers, which are of confidential nature. Hackers often try to
attack Adobe servers, and they also are continuously developing malware and viruses for this very
purpose. This also harms the Brand Image that Adobe has so painstakingly created over the years.
H. Success in India and its reasons
Adobe has gained a lot of traction in India, and in addition to the growth drivers mentioned above at the start
of the article, a few key pointers that needs to be highlighted-
Adobe earned a spot in the Top 10 Best Places to work in India in the year 2019 and came in at a
respectable 7th
In 2018, Shantanu Narayen, the CEO of Adobe India, won the Global Indian of the Year. Shantanu
has been with Adobe for long and has helped it in its key projects like transition to cloud-based
subscription model rather than one-time licensing software.
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Adobe first came in to the country in the year 1997 and as of 2017 has more than 5,200 employees
across four campuses in the cities in the cities of Bengaluru and Noida
The India Business for Adobe is one of its fastest growing in the Asia Pacific regions
The strong growth is spearheaded by growing industries such as education, e-learning, fintech,
insurance and retail
I. Evergreen market
The picture below proves that Adobe’s very business model and the products it has been dealing with has
suffered little to no consequences because of the global pandemic. Being largely digital products, they can be
facilitated over the internet and the need for Digital Marketing and associated activities are always on the rise
thereby contributing to the company’s revenues even during a global viral pandemic.
Source
About me-
Biswadeep Ghosh Hazra, 26 years of age has graduated in Electronics and Communication Engineering
from Haldia Institute of Technology, Haldia.
He has worked as a Software Tester/Quality Engineer in Tech Mahindra, Hyderabad, and as a content writer
and manager in a company called ExamFocus. He is now studying Business Management (BM) at Xavier
Institute of Management, Bhubaneswar.
Biswadeep has a passion for writing poetry, short stories, novellas and plays and has published his works in
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various national and international magazines, books and journals. He has more than 8 years of content
writing almost any kind of articles, web contents, brochures, marketing materials, for a multitude of
companies, websites and people alike.
He can be reached at-
Facebook: - https://www.facebook.com/biswadeep.g.hazra
Email: - biswadeep93@gmail.com