Q2: Progress on Adobe’s Transformation
Adobe’s second quarter earnings announcement signals more progress in its transformation from “the PDF” company to a digital marketing giant.
The transitions are many. First, clients are adapting their businesses to mobile customer experience and marketing. Good news here: Mobile transactions are up 25%. Second, Adobe is on a path to provide tools for digital marketing, in addition to its strengths with creating digital content. Many of the steps on this path are furnished by acquisition, most notably of Omniture and its leading analytics, search, and other tools. It’s not clear what portion of creative users are now also using the marketing cloud. All we know is that of the $1.1B in revenue for the quarter, $230M came from Adobe Marketing Cloud. This represents a 17% year-year growth in revenue, and 25% growth in bookings.
In another transition, Adobe is shifting from licensed software to services delivered from Adobe Marketing Cloud. This is a stressful transition for some customers, especially those who hate putting their valuable data in some other company’s hands. An easier transition for many customers is the repackaging of 30 different products into 5 solutions offered thre Adobe Marketing Cloud. Adobe has given considerable thought to designing these solutions around its customers tasks and roles. It remains to be seen how well the new solutions match up to customers’ objectives and budgets.