The news dropped two weeks ago: Adobe snapped up Magento for the tidy sum of $1.68 billion.
This was not really a surprise, as the California software vendor had previously missed two great opportunities to add an eCommerce offering to its customer experience platform. First in 2013 by letting Hybris fall into the hands of SAP and then in 2016 with the acquisition of Demandware by Salesforce. Since Shopify was probably too mid-market for Adobe, there were only a few options left.
So, was this simply a default choice? A question of Adobe taking the last remaining eCommerce option available to it? And will there be problematic fallout from meshing Magento’s open source community with Adobe’s traditionally proprietary cloud offerings? Will this acquisition be a bad thing for the open source community in general?
On the contrary, I think this acquisition is a highly strategic move for Adobe and a fabulous opportunity for both the Magento community and open source in general. Here’s why:
This is not a repeat.
The long struggle following Magento’s acquisition by eBay in 2011 is still on everyone’s mind. In that ill-fated acquisition, Magento lost its founders (Yoav Kutner only a few months after the acquisition and Roy Rubin in 2014) and suffered from a near-total paralysis of development efforts. This deeply weakened the solution and, facing increasingly mature competition, Magento started to seriously lose its luster. It took an organizational reboot and a lot of energy from the new management team to revive the phoenix from its ashes after a late, but highly salutary, exit from eBay in 2015. However, I don’t believe that this history will be repeating itself at Adobe.
Open source software never dies.
First, we must remember the basics: even with the worst intentions in the world, one cannot kill an open source solution. Without going into the technical details of the various open source licenses, we must understand that we cannot backtrack in open source. The existing code cannot be deleted or blocked. This is the incredible strength of the model: as long as a community is involved in an open source project, it will continue to thrive and evolve. And the Magento community has never been stronger! Great efforts have been made over the last two years to provide a real place for community-driven development. Even if tomorrow Adobe decided to stop these efforts or try to stop any contribution whatsoever to the open source version of Magento, it is very likely that the community will quickly rebound and put in place an effective governance to continue to maintain and develop this product.
Open SaaS is the new SaaS.
The other issue that has many worried about this acquisition is the very strong cloud culture of Adobe. Some have too often treated open source and SaaS as if they were opposing and irreconcilable models. Open source was intrinsically linked to an „on-premise“ and highly customizable deployment. This was contrasted with SaaS’s lack of infrastructure issues and faster updates that came at the expense of customizability.
And yet the reality is very different. The vast majority of open source publishers (Talend, SugarCRM, Nuxeo, MuleSoft, Akeneo…) have evolved their model by offering cloud solutions based on an open source engine and delivering the same services as a SaaS solution. All delivered without distorting the strengths of both models (openness and community on one hand, and the serenity offered by an end-to-end managed solution on the other). Magento is no exception to this new Open SaaS rule: they dove in a little over two years ago with the launch of Magento Cloud Edition.
Adobe will undoubtedly promote and invest primarily in this Cloud offering. This is Adobe’s strength and will probably allow them to go even further in the Open SaaS direction while creating better synergies with the other tools of their Adobe Experience Manager platform. But Abode will also continue to rely on the incredible ecosystem around Magento and the strength of its community. Why? Because, more than the functional depth of the solution or the technology behind it, this community is what makes, and will continue to make, the differentiating force of Magento.
The acquisition by eBay in 2011 was not driven by a strong product vision: it was mainly motivated by the opportunity to accelerate the adoption of PayPal as a means of payment on the very large Magento installed base. We are today in a completely different situation. Adobe is a software vendor that has repeatedly demonstrated an ability to anticipate the fundamental transformations of this industry and to constantly reinvent itself. A prominent example is the successful evolution of their Creative Suite of products like Photoshop and Illustrator to a subscription model.
It would be hard to believe that Adobe’s choice to buy an open source solution has been made without a very fine understanding of what makes Magento strong. And it is precisely the recognition of the value of this model at the crossroads of open source and SaaS that makes this acquisition a history-making moment for open source. This acquisition is therefore not a default choice, but a deliberate and informed strategic move that should tell us much about the future of software and proprietary solutions.
Just months after the spectacular acquisition of MuleSoft (another open source publisher) by Salesforce, this takeover of Magento by Abobe is another strong message for the software industry. The open source of 2018 is no longer relegated to low-level technologies such as databases or operating systems and is no longer (if it ever was) the antithesis of SaaS.
Open source is reinventing itself to bring to life the most demanding and attractive solutions in the market while preserving its fundamental values of openness and collaboration. A very nice victory for open source indeed.