Currently, Adobe Inc. owns Magento after successfully acquiring the company in 2018 from then-owner Permira — a British global investment firm.
Magento was first launched in 2008 by Roy Rubin and Yoav Kutner. While attending college at UCLA around 2003–2004, Rubin and Kutner recognized a gap in the market left by the leading open-source product of the time, osCommerce. They found that the existing service providers for osCommerce weren’t sophisticated and that there weren’t many available for those that desired customizations. Through their company, Varien, they started advertising their web development services on Google Adwords, trying to attract osCommerce clients. After working in the industry for a few years, Varien had a great team of developers and was flooded continuously with work and requests from new clients. A large portion of these requests were from clients requesting advanced functionality that was both time-consuming and difficult to achieve using existing solutions. Seeing this, they decided to build a new platform from scratch that fulfilled all the gaps left in the market by the existing platforms. What initially started as a pet project soon became their primary focus, following which they announced Magento’s development for the first time in 2007.
After its launch in 2008, Magento gained traction instantly, being an open-source and highly customizable platform at the same time. By early 2009 it had already surpassed its main competitor osCommerce in popularity. Magento continued to grow in popularity over the years, and in June 2011, eBay fully acquired the company after having purchased 49% ownership back in 2010. After the acquisition, eBay integrated its payment system PayPal directly into the platform.
When PayPal split from eBay in 2015, Magento was acquired and formed into an independent company by its new owner Permira. Under Permira’s ownership, Magento launched its Enterprise Edition as a platform as a service (PaaS) in 2016. The Enterprise Edition used the core code of the open-source Community Edition . Their primary focus was to help larger businesses that required technical support with installation, configuration, and troubleshooting issues.
In 2018, Adobe announced that they would be acquiring Magento for a massive $1.68 billion intending to integrate it into their existing enterprise platform Adobe Experience Cloud. Adobe had noticed Magento’s success with the development of their Enterprise Edition platform, B2B, and order management functionality. This made them realize that making Magento a part of their Adobe Experience Cloud would help them fill gaps in their product and make it a complete solution. The fact that Adobe owns Magento means they will deliver a single platform catering to both B2B and B2C customers worldwide. Many open-source users anticipated that Adobe’s acquisition would mean the end of the open-source version. However, Matt Asay, then Head of Developer Ecosystem at Adobe, set everyone at ease by confirming on Twitter that Adobe would continue to support the open-source version.
Currently, Magento Open Source is made available to the public under the Open Software License (OSL 3.0). For online merchants seeking to use Magento to power their ecommerce stores, OSL 3.0 allows the Magento software to be downloaded, modified, used, and distributed. For developers seeking to customize and build on the platform, OSL 3.0 provides access to Magento Open Source’s code for further modification, customization, and distribution under the OSL 3.0 license. This helps merchants and developers enhance Magento in ways that are available and beneficial to all.
While OSL 3.0 provides access to the software, the use of Magento’s trademarks, service marks, and logos is restricted unless done using an express written trademark license from Adobe or within their expressed terms. Keeping Magento as an open-source solution is one of the main reasons behind its success. With contributions from its diverse global community of developers and online merchants, Magento is continuously evolving and adapting to the industry’s demands by adding new features and functionality and updating its code to work with new and emerging technologies.
When a store owner uses the Magento platform for their website, they’re bound by the OSL 3.0 terms, which allows for worldwide, royalty-free, non-exclusive use. This means they’re not required to pay Adobe any royalties for using the software, and the profits they make through their business are theirs to keep. For new online businesses, an open-source product like Magento is the perfect solution to starting without paying any licensing or transaction fees while utilizing functionality comparable to premium solutions on the market like Shopify and BigCommerce . For established stores seeking a premium solution, Magento’s Commerce edition delivers technical support, advanced functionality, and complete customizability.