Updated: Marketing industry sizes up Adobe's US$1.5bn Workfront acquisition

Adobe acquires work management software vendor, Workfront, to bring collaboration tools into its customer experience and creative cloud portfolios

Adobe's acquisition of work management software vendor, Workfront, for US$1.5 billion has been described by analysts and thought leaders as an interesting but ultimately unsurprising deal given the growing maturity of marketing and CX capability globally.

Adobe confirmed the agreement this week, positioning it as an acquisition that will bring collaboration management capabilities into its customer experience and creative cloud platform portfolios. Specifically, the vendor highlighted Workfront’s deep leadership and enterprise-grade ability to orchestrate marketing workflows as a key reason for the deal. The two companies have been partners for some time, and Workfront already offers APIs connecting its software straight into Adobe Creative Cloud and Adobe Experience Cloud.

Among the 1000 customers Adobe and Workfront have in common are Deloitte, Under Armour, Nordstrom, Prudential Financial, T-Mobile and The Home Depot. Workfront boasts of more than 3000 customers globally and 1 million users. Core capabilities of its platform including the ability to manage content, plan and track marketing campaigns and execute workflows across teams.

The transaction is expected to close during the first quarter of Adobe’s 2021 fiscal year subject to final conditions. Under the deal, Workfront CEO, Alex Shootman, will continue to lead the Workfront team, reporting to Adobe executive vice-president and general manager of Digital Experience Business and worldwide field operations, Anil Chakravarthy.

“Adobe is the undisputed leader in content creation, management, delivery and measurement and a trusted partner to digital leaders around the globe,” Chakravarthy said. “The combination of Adobe and Workfront will further accelerate Adobe’s leadership in customer experience management, providing a pioneering solution that spans the entire lifecycle of digital experiences, from ideation to activation.”

Satisfying B2B and B2C customers today requires large volumes of content and personalised marketing campaigns delivered at lightning speed and scale, Adobe continued. The vendor noted this must be executed across increasingly dispersed teams and remote workforces.

The combination of Adobe Experience Cloud and Workfront will bring efficiency, collaboration, and productivity gains to marketing teams currently challenged with siloed work management solutions, the companies stated. It also brings a management solution that runs across both the creative and execution sides of developing marketing and customer engagement programs of work.

“Adobe and Workfront share a common affinity to help the modern marketer thrive in an ever-evolving, increasingly demanding setting,” added Shootman. “We’re excited to join Adobe and believe this will be a tremendous opportunity for our customers and partners.”

Commenting on the deal, Pund-IT founder and industry commentator, Charles king, told CMO the purchase is possibly a more significant one for Workfront than for Adobe.

“The former finally exits private ownership after nearly two decades to become a sizable cog in a much larger and more complex organisation. That said, the deal should add additional value/heft to Adobe's marketing collaboration solutions,” he said.

Given the two companies' existing synergies including shared customers, and integrations, it isn’t a terribly surprising deal either, King continued.

“At this point, given the continuing, severe disruptions of Covid-19, offering customers a unified, optimised solution set is smarter than leaving them to cherry-pick solutions from competitors that might try to peel them away,” he said. “Workfront is a good addition for Adobe.” 

Raab and Associates founder, David Raab, agreed the deal was a sensible one. “Broadly, this makes sense as marketing becomes more cross-channel and personalised, which makes workforce management and collaboration more important,” Raab said. “It opens a new front in the battle of the marketing clouds, so I guess we can expect similar acquisitions by others.”  

Constellation Research VP and principal analyst, Liz Miller, pointed out Workfront has been leaning into the idea that marketing, from creation to deployment and optimisation, has a very specific pattern of work for some time. By focusing on the people doing the work, as opposed to just looking at the process or workflow first, Workfront has tried to separate itself from the more creative-centric work platforms a la Asana or Basecamp, she explained.

"The significance of the deal rests primarily on the Adobe side that has had a gap in how workflows and the actual pattern of 'work' across the entire marketing ecosystem is managed and aligned, potentially even bridging the work-gap between Creative and Experience clouds," Miller continued. "While there are existing workflows that connect the clouds, the addition of alignment around strategy and workflows becomes a compelling offering as a marketing operations booster. Thanks to Workfront’s integration portfolio, teams already working on collaboration tools like Slack and Teams don’t have to 'relearn' collaboration on yet another tool…they can keep working in the way in which they want to work."  

As for what the acquisition says about Adobe’s efforts to own CX management through its software solutions, Miller noted Adobe has long championed the business and the work of marketing and creativity. "This new move is in line with that heritage," she added.

"While there is a compelling argument to be made against the nomenclature of 'experience management' – something if we are being honest can only truly be managed by the customer but has to be delivered by the entire organisation – Adobe has made significant strides in owning the tools that empower marketing to effectively and efficiently execute their part of the holistic CX strategy.

"And, with significant partnerships with the likes of Microsoft and ServiceNow, Adobe takes the reigns as a significant enabler in the advancement of digital business. "

According to Miller's colleague at Constellation, VP Nicole France, the whole idea of managing a customer’s experience is fundamentally flawed. "No one can manage what is inherently personal to the one experiencing it," she commented.

"That said, if we look at trying to own the landscape of tools required to shape experiences and coordinate across all aspects of a customer relationship, yes, this is an important step in that direction. This acquisition has the potential to change the way marketing teams work as a whole. It sill, however, leaves some major gaps in other key aspects of customer experience, most notably sales and service."

IDC martech analyst, Gerry Murray, was another to position the deal as an interesting extension of Adobe’s value proposition to global marketing teams. "This has been made all the more urgent with working from home," he told CMO.

"Workfront has strong project and portfolio management capabilities relative to other PPMs and is adding more sophisticated AI/ML. The combination is extremely popular with customers especially those with more complex marketing campaigns and operations that span regional teams and multiple partners."

Also from a Workfront perspective, Constellation Research VP and principal analyst, Dion Hinchcliffe, pointed out work coordination platforms such as Workfront's, focus on driving collaborative outcomes at scale, and have increasingly becoming enmeshed in creative, marketing, and advertising teams as a core operational component.

"Adobe was seeing Workfront being used successfully to drive uptake and effectiveness of their products and it's clear they saw the strategic value in being more operationally connected to their customers, to drive both adoption and higher customer success," he said. 

King said was also worth considering how this deal reflects companies coming to terms with the likelihood that Covid-19 will continue to be a factor and drag on businesses and markets for many months to come.

“With that in mind, it's important for vendors to continue adding features and value that customers can use to improve efficiencies and strengthen their own offerings. The Adobe/Workfront deal looks like a good deal for all involved,” he added.

The Workfront purchase is just one of a succession of acquisitions Adobe has made in recent years to build out a more comprehensive, enterprise-grade marketing and CX management solution.

Two years ago, Adobe purchased B2B marketing automation player, Marketo, for US$4.75 billion, bringing the platform into its Adobe Experience Cloud. This was preceeded by the acquisition of ecommerce software provider, Magento, in May 2018 for US$1.68 billion.

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