“Adobe today announced it has entered into a definitive agreement to acquire privately-held Fotolia, a leading marketplace for stock content. Fotolia will be integrated into Adobe Creative Cloud, providing current and future Creative Cloud members with the ability to access and purchase over 34 million images and videos, significantly simplifying and accelerating the design process. The acquisition of Fotolia cements Creative Cloud’s role as a vibrant marketplace for creatives to buy and sell assets and services as well as showcase their talent to a worldwide audience. Adobe also plans to continue to operate Fotolia as a standalone stock service, accessible to anyone.” [Read More]
The VentureBeat article makes reference to AutoDesk’s purchase of Creative Market, but as reported on DAM News back in July, Adobe have also launched a stock design marketplace with source media from an earlier acquisition of Behance so this appears to be the second similar announcement this year. The Fotolia transaction, however, is quite a lot larger and more significant; it follows the vertical integration trend that appears to be in-play currently in digital media, the Shutterstock acquisition of WebDAM being another example.
This news probably won’t be much of a surprise to many and the commercial factors behind it appear to make sense: they want to take a slice of the revenue action at different points in the digital asset supply chain and construct some kind of cloud-based environment where users could theoretically carry out all their creative media production exclusively with Adobe owned products, software services and materials (i.e. digital assets). Although their Experience Manager (AEM) DAM platform leaves plenty to be desired currently, I can’t imagine they are not going to invest heavily into trying resolve the limitations. Unlike Microsoft and Google (and noting that they are relative minnows by the side of those two) DAM is an area where Adobe need to successful because there is an obvious relationship with their current stable of established software products like Photoshop, Illustrator, Premiere etc which provides a ready-made route to market or sales channel. If they don’t establish a strong presence across the whole digital media supply chain, their other application brands which currently pay the bills and provide them with capital to invest are at placed at risk (more about that later) so this might well be a ‘death or glory’ type of undertaking as far as their management are concerned.
As should be becoming blatantly obvious to anyone who may have been late understanding the wider significance of DAM (as Adobe themselves apparently were) a repository of digital assets is going to become one of a small number of core rich media delivery infrastructure components that organisations increasingly rely on as we advance further into the 21st century. Adobe are busy implementing a strategy that revolves around you going to their DAM and never leaving it to limit the opportunity for others to usurp their dominant position in the creative production market and provide them a platform to push on further from there.
This is an obvious manoeuvre and the opinion a lot of people might be forming is that Adobe have juggernaut-like momentum that will smash through anyone who dares to stand in their way. But as ever in a competitive scenario, when it appears as though one protagonist has acquired a position of absolute supremacy, the seeds of their potential downfall are also sewn. So what might be some of those be? One of them is the Creative Cloud itself. Adobe’s strategy is predicated on users switching to this, but it presents something of a PR problem for relations with their existing users.
My understanding is that the subscription model has not been well received by a lot of long-term Adobe advocates who have previously supported them for multiple decades. I don’t associate with as many creative production people as I used to, but those I still stay in contact with are not at all pleased at effectively being converted to de-facto software ‘tenants’ rather than home-owners – if they plan to remain on the Adobe estate. Right now, they will probably stay and pay the monthly fee, but an opportunity for someone to offer an alternative has been opened.
A further issue is Adobe’s propensity to start competing with their own customers and partners. This seems to be something they don’t have too many problems with historically and there are several cases where Adobe liked the revenue opportunity presented by a partner who had spent time and money building an extension, so much that they built it into the core product. To an extent, this isn’t really something you can argue about with software and those producing extensions for someone else’s platform must always consider that as a risk factor. In the case of stock media, however, it’s now the users also who Adobe consider fair game. I would imagine that senior managers at Shutterstock, Getty, Corbis etc, might be less than thrilled at the prospect of using a new (and major) competitor’s tools as an integral element of their own production processes to retouch digital photos etc. Some might at least be contemplating the possibility of developing alternatives, perhaps based on existing applications in the same way that buying up DAM software firms has been successfully executed. They might initially not wish to release this to the wider public while the issues were resolved, but it would certainly be considered as an opportunity to both recover any development costs and return some of the competitive fire back (with interest).
One trend which seems to be gathering momentum is the appropriation of mobile OS like Android etc for wider purposes (for example, in Smart TVs etc). I still find myself needing at least a laptop running a more conventional OS to do proper work but the gap between them in terms of what you can do is now closing so the lines between devices are becoming more blurred. I gather Adobe do produce mobile-based versions of their applications, which are broken down into individual apps so again, they do have a ready-made channel, but the transition from older desktop-based delivery model to mobile offers an opportunity for a competitor to present an alternative. By dividing the applications into more specialised functional roles, they make it more convenient for users to mix and match and employ their own self-directed best of breed techniques to achieve some production related task. What is advantageous for end users, however, might not be desirable for vendors who want to lock users into a single platform and use inertia as a tactic to keep them there.
I would have to acknowledge that betting against Adobe on the basis of the points mentioned above would be a high-risk strategy. Based on Adobe’s marketing communications output, their courting of some sections of the analyst community and the whole ‘experience management’ proposition, I think it’s fair to say that they have bet the ranch on all this paying off handsomely. Because of that, a lot of time, money and senior management attention will get devoted to trying to ensure it does not fail. With that being said, I have identified at least three areas where they could get it wrong and become irrevocably damaged as a result. Adobe have form for making critical errors of corporate judgement in the past (although none have been fatal, thus far). Alienating existing customers to secure a big prize is not without hazards and by vertically integrating down the digital asset management supply chain, they will have added a few more competitors who now also have a vested interest in taking them on.