Pandemic-induced collaboration: Adobe's billion-dollar acquisition

1 month ago 22
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While the acquisition focuses on video, it rounds out Adobe's collaboration capabilities and extends them to the final frontier of video—a medium that has been notoriously difficult to collaborate within.

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Image: iStock/deagreez

The pandemic ripped off the Band-Aid for collaboration. Hybrid and completely remote environments drove businesses to adopt new ways of working. Videoconferencing, virtual events, and collaboration capabilities surged. One by-product is the red-hot acquisition market for these technologies. Most recently, we saw Adobe's intent to acquire Frame.io, a company that makes video collaboration software. 

While the acquisition focuses on video, it rounds out Adobe's collaboration capabilities and extends them to the final frontier of video—a medium that has been notoriously difficult to collaborate within. 

The acquisition also signals that Adobe is serious about enabling collaboration in creative workflows. In addition to concepts like creative systems and features like creative libraries, it has been acquiring companies. Late last year, Adobe acquired marketing workflow company Workfront. Together with that acquisition, Adobe will now have spent approximately $2.8 billion acquiring collaboration and workflow companies in the last year. These are the first significant acquisitions since its 2018 Magento and Marketo acquisitions for marketing automation and e-commerce capabilities. 

Why is Adobe leaning so hard into workflow and collaboration? Because there's a big opportunity to smooth the rough edges of many creative workflows, and it's going to be essential. Seventy-five percent of CEOs said that they expect their office spaces to shrink in the future because of anywhere work. Other leaders recognize that their technology investments haven't positioned them for successful anywhere work. Forrester's Q3 2020 US Future Of Work Survey found that only 52% of US employees agree that their company has the technology resources to allow people to work from home as necessary. 

But the outlook for Adobe isn't all rosy. Potential challenges with its collaboration strategy include: 

  • Competition. Figma's digital product design focus and real-time collaboration led to meteoric growth and a five-times growth rate in its valuation. Both Figma and InVision have centered what they do on enabling collaboration. Then there's Microsoft Teams, Slack, Zoom, and any number of other collaboration methods. 

  • Potential adoption issues. Many businesses have already standardized collaboration on other tools. Sure, it might be easy to switch it out for a different technology, but we've found that's often not the problem; it's the people. Creatives and designers will be hesitant or outright resistant to process change. 

  • Pricing and packaging. We hear that Creative Cloud is already a significant expense at enterprises. With additional capabilities, will the price increase? Adobe could perhaps position this as a way to reduce customer churn. 

This all gets easier if Adobe is able to weave Frame.io capabilities into other products (much like Workfront) rather than a standalone product. 

This post was written by Senior Analyst Nick Barber, and it originally appeared here

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