Wednesday, 16 September 2009

Adobe moves beyond design and publishing with Omniture

(By Philip Carnelley, 16 Sep 09, 09:30) Despite Adobe Systems' presence in the market – we make it the 11th biggest software supplier to the UK market, and it had worldwide revenues of $3.6bn in 2008 – Adobe does not figure large in many organisations’ IT strategy. Despite the ubiquity of its pdf file format, its Flash player and its reader software, it rarely registers on a CIO’s radar outside the publishing industry where its Creative Suite is the gorilla in the market. Last night’s Q3 financial results reflected this, with revenues down 21% year-on-year, to $698m, and operating profits down 24%. EMEA revenues fell 34%, to $196m.

In an interesting move to extend its reach, Adobe announced yesterday a $1.8bn cash bid to buy Omniture, a company providing software to track website and online ads usage. The price for Omniture, which had 2008 revenues of $300m, is a 45% premium on its average over the last 30 days. The synergy between the two companies is not immediately obvious; however the idea, we believe, is for companies to monitor the effectiveness of websites they’re building with the Adobe software, embedding measurement tools into the development process. Omniture is delivered through a SaaS model. If Adobe can build a repeatable, annuity revenue stream from companies monitoring a significant proportion of the websites built with its creation and publishing tools, that could turn into a very solid revenue stream indeed.

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