Thoughts on Adobe + Omniture
Wow, I have to admit that I was surprised mid-day today at a new client meeting in Chicago when, at the same moment, my phone, my SMS, and my email all went off at the same time. When we got to a break I quickly glanced down and the SMS message said “Adobe buys OMTR for $1.8B!!!!!!”
Wow.
I didn’t get to talk to the press (John got the honors, congrats) and am just not getting a chance to cogitate a little on what Adobe’s entrance to the web analytics market means after non-stop phone calls for the past five hours. A lot of interesting comments have already been published so I will try and reference the stuff I think is insightful in an effort to avoid repetition.
- In general, the more I think about the deal the more it makes sense, at least for Omniture. Given increasing pressure from lower-cost (and free) solutions, the economy, and a customer base that is more and more prone to complain about service issues and the high cost of doing business with the company, exiting now makes good sense. Why fight the sea change in the analytics market when you can saddle someone else with the responsibility?
- Like others, I don’t really see the synergy in the deal, but I admit that I love Adobe and so I’m willing to be surprised. I think of Adobe as a software company for creative types; Omniture sells software-as-a-service to analytical types; these are different business models and very different customers. The idea that somehow this acquisition bolsters Adobe’s position in content management or as a global delivery platform just doesn’t resonate with me.
- Similarly, I don’t see this acquisition as creating anything new regarding measurement being embedded into rich media applications. Thanks, perhaps ironically, to Macromedia (owned by Adobe) we have been embedding tracking codes into Flash, Flex, Silverlight, AJAX, etc. for years … and while the integration is botched as often as not, I don’t see how adding a “Click here to Omniture-ize” button into Dreamweaver and Adobe’s RIA development suite will solve that problem.
- I do agree with Alex Yoder’s general thesis that this acquisition increases the overall visibility of the sector and that this is a good thing. I also agree that this acquisition is likely not the last — both WebTrends and Coremetrics are owned by investors and you know how those guys are. His citation of Microsoft and Oracle is interesting given both companies historical interest in the sector (although neither has had the chutzpa to actually pull the trigger — at least in a substantial way.)
- I also agree with Gary who is somewhat skeptical about acquisitions, especially out-of-sector ones like this (anyone remember NetIQ? How about you Deepmetrics customers?) and since the Instadia, HBX, and Visual Sciences acquisitions that Omniture made didn’t really generate the benefits promised. However, where Gary favored IBM (who I didn’t realize wanted back into the sector after selling SurfAid to Coremetrics) I liked the idea of WPP increasing their $25M investment by, well, I guess about $1775M or so. Given my position on how companies will deploy web analytics in the future, WPP adding a premium measurement brand to their analytics tools and giving them the ability to pass world-class analytics along to their best customers made sense to me. Oh well.
Regarding Omniture customers … I am getting feedback from across the spectrum. Some customers are encouraged by the news, largely because they believe that Adobe will bring a new level of rigor to product development, integration, and customer support. Others (including those customers still on HBX) are somewhat discouraged by the news, given that they’ve been hearing a lot of promises lately and they’re not sure what a new owner will mean. Still others have expressed that they really liked what the company had been doing this past year and so are bummed that things might slow down while the deal and integration are completed.
Prospects are a different question. Since I am working with a number of companies currently evaluating Omniture products … the best guidance I can give is “wait and see.” Again, I think Adobe is an awesome company and every interaction I have ever had with them has been positive. Hopefully this acquisition will be mostly painless and largely transparent to outsiders. We’ll know soon enough if Omniture’s recent aggressive pricing and willingness to cut deals to close business differs from Adobe’s business practices. And while competitors will almost certainly claim “Omniture is out of the game,” I am personally encouraging my clients to think carefully about what Omniture and Adobe have been able to do independently before writing the combined company off.
At the end of the day I’m really happy for the bright folks I know who have been plugging away at Omniture all these years in a variety of their companies. The teams at Omniture, HBX and Visual Sciences, Offermatica, and hell even Matt Belkin (remember that guy!) who hopefully get to participate in the largess that Omniture has created should all get credit for the thousands of hours they spent on the road, fighting for the big green machine, never willing to concede until they’d finally lost (and sometimes even after they’d been asked to go home!)
Congratulations to Josh, Chris, Brett, John, Kristi, and the entire senior management team at Omniture! Also, best of luck to the management team at Adobe with your new acquisition; your new customers are among the best in the business and will look to you to make a good thing even better.
