Currently, Adobe Inc. owns Magento after successfully acquiring the company in 2018 from
then-owner Permira — a British global investment firm.
History of Magento
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.
Acquisition by eBay
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.
Acquisition by Permira
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
platform as a service (PaaS) in 2016. The Enterprise Edition used the core code of the
. Their primary focus was to help larger businesses that required technical
support with installation, configuration, and troubleshooting issues.
Acquisition by Adobe
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
Adobe would continue to support the open-source version.
Open Software License
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
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
For established stores seeking a premium solution, Magento’s Commerce edition delivers
technical support, advanced functionality, and complete customizability.