Adobe bought Magento from Permira Holdings LLP in June 2018 for $1.68 billion. They first announced their intent to acquire the company on the 21st of May, 2018 and completed the acquisition less than a month later, on the 19th of June, 2018.
History of Magento
Magento was conceptualized and created by Roy Rubin and Yoav Kutner through their company Varien Inc. back in 2008. Soon after its launch, the popularity of Magento in the open-source community began to grow, and it surpassed its main competitor osCommerce, within its first year on the market.
In 2010, eBay purchased a 49% stake in the company and less than a year later fully acquired the company from Varien Inc. Rubin and Kutner continued to work for the business with eBay until 2015 and made significant contributions to the platform. In 2011, they began working on Magento 2, and it was during this time that eBay decided to integrate its payment processor PayPal into Magento 2 as a core module.
In 2015, eBay sold Magento as a part of eBay Enterprise to a consortium of private equity funds for $925 million, of which the valuation of Magento was approximately $200 million. Following the acquisition, the group split Magento from eBay Enterprise, and Permira Funds took ownership of the company intending to grow the company and expand its existing offerings.
In 2017, Hillhouse Capital, an Asia-focused equity firm, invested $250 million into the company to further grow Magento, and it was after this investment that Adobe acquired the business entirely in 2018.
Adobe was no stranger to the platform before the acquisition. They had initially partnered with Magento in September 2016 to integrate their platforms and services. Together they built an integration framework that allowed Adobe Experience Manager, Adobe Analytics, and Adobe Target to transmit data to and from Magento Commerce and Magento Commerce Order Management.
They intended to create a solution that would provide both B2B and B2C merchants worldwide with unified shopping experiences, more personalization, common architecture, and greater business agility. Adobe and Magento shared existing blue-chip customers like Coca-Cola, Cathay Pacific, and Warner Music Group, making the partnership a natural fit.
Immediately following Adobe’s announcement of its intent to acquire Magento on the 21st of May 2018, many became concerned about the future of Magento Open Source. Magento’s open-source license and its diverse global community of developers and merchants contributed significantly to its success. In contrast, Adobe wasn’t known for offering open-source solutions.
However, the very next day after announcing the acquisition, Matt Asay, then Head of Developer Ecosystem at Adobe, put out a tweet and an article on Medium to assure Magento’s global community of their intentions to keep Magento open source indefinitely.
True to their word, Adobe has continued to keep Magento Open Source free for all and has shown no intentions to monetize the platform in the future. At the same time, they’ve actively integrated Adobe’s products and services into Magento, which has been mutually beneficial in many respects.
One of the most recent changes by Adobe has been the complete overhaul of the Magento Certification program. Beyond simply rebranding it, Adobe has made crucial changes like increasing the test durations and setting a validity of two years for the certifications. Thus, improving the quality of the program and ensuring those certified remain updated with the platform’s latest developments.
Adobe has also introduced the power of artificial intelligence to Magento users. Magento Commerce uses Product Recommendations, a feature powered by Adobe Sensei, that leverages the power of AI and machine learning to recommend products automatically. Adobe Sensei performs a thorough analysis of aggregated shopper data and tailors its product recommendations to shoppers to increase conversions and boost engagement.
Other highly anticipated functionalities like the introduction of a Page Builder and the Magento PWA project developer tools were also made possible by Adobe.
Considering Magento’s progress under the ownership of Adobe, it’s clear that it has a bright future ahead of it. Adobe has one of the most significant and influential software company portfolios and is always looking to grow and expand its Adobe Experience Cloud.
As recently as December 2020, Adobe acquired Workfront, a cloud-based work and project management software. Workfront, like Adobe’s recent acquisitions, will eventually integrate into the Adobe Cloud universe and such software will surely benefit businesses using Magento Commerce. It’s more than likely Adobe will continue building up its portfolio with more software and tech that would be mutually beneficial to both Adobe and Magento’s user base.