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The digital experience platform market size is estimated to grow from $9.7 billion in 2021 to $10.9 billion in 2022, a compound annual growth rate of 12.6%, according to The Business Research Company.
Adobe forecasts 2023 revenues for its DEP market segment will reach $5 billion, making the company a dominant player in the market. Some of its most prominent competitors in the digital experience platform market include Salesforce, Acquia and Sitecore Experience Manager.
Salesforce has felt the weight of economic pressures pushing customers to be more diligent about spending. The company has also experienced executive churn with the departures of Co-CEO Bret Taylor and Slack CEO and cofounder Stewart Butterfield. Additionally, the company has laid off hundreds of workers in the past few months.
Despite Adobe eliminating around 100 jobs in early December, as reported by Bloomberg, the company has not seen the same end-of-year turmoil as other tech companies.
“In short, Adobe has created a true vertical supply chain: content design, creation, content management, omnichannel distribution, analytics and tying it together with Experience all the way through payment,” Scott Bickley, advisory practice lead at Info-Tech Research Group, said in an email. “While not immune to economic downturns, Adobe’s Digital business may see improved investment compared to other areas of spend as it is core to the overall commerce engine in the enterprise.”
The design software company touted its enterprise customer deals from Cigna, Disney Parks, Wells Fargo, Office Depot, and Delta Airlines. Adobe is also looking to beef up its capabilities. The company entered a definitive merger agreement to acquire web design platform Figma for approximately $20 billion in cash and stock in September.
Acquisitions and mergers, especially when significant, can be costly and add stress to the balance sheet, according to Bickley.
“Adobe is more in the position of a Microsoft versus a Salesforce in that they have a very healthy balance sheet and can afford this purchase,” Bickely said.
The deal is still under review by the Department of Justice and the Competition and Markets Authority in the U.K.
“We expect that the transaction will also be reviewed in the EU,” David Wadhwani, president of digital media business at Adobe, said during the company’s earnings call. “We continue to feel positive about the facts underlying the transaction and expect to receive approval to close the transaction in 2023.”
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Businesses must reconfigure the development process, tackling the biggest issues first on the road toward software redemption.
Not all $1 billion tech investments are equal when it comes to paying down technical debt.
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