Adobe to Acquire Frame.io for US$1.3 billion
On its way to become a digital transformation company, Adobe plans to acquire Frame.io, a video cloud-based software collaboration platform that allows multiple people to provide input on videos, for US$1.28 billion, the company said Thursday.
This acquisition aims to add enhancements to Adobe's Creative Cloud software, which gives access to a range of applications including Photoshop, Illustrator and Lightroom. According to Adobe, Frame.io can power Premiere Pro and After Effects for video editing with review and approval capabilities.
“We have entered a new era of connected creativity that is deeply collaborative, and we imagine a world where everyone can participate in the creative process. With this acquisition, we’re welcoming an incredible customer-oriented team and adding Frame.io’s cloud-native workflow capabilities to make the creative process more collaborative, productive, and efficient to further unleash creativity for all,” said in a statement Adobe’s Chief Product Officer and Executive Vice President of Creative Cloud Scott Belsky.
This move comes on top of other efforts Adobe has made to bolster Creative Cloud’s software through the acquisitions of Fotolia in 2014 and Behance in 2012. In 2Q2021, 60 percent of Adobe's revenue came from Creative Cloud, which also grew in revenue 24 percent year-over-year.
Over the past 10 years, Adobe has been working to achieve its goal of becoming a digital transformation company. In an interview with Mexico Business in February this year, Director General of Adobe Mexico Douglas Montalvao, said that this transformation process included starting to offer cloud services, "which made Creative Cloud more attractive as new version releases would be more frequent and would not require a reinstallation of the program.” Along with this change, Creative Cloud's business approach changed to a subscription-based model in an effort to break down the budget barrier to its product.
“The plan worked and people who did not buy Adobe because they could not afford it began to subscribe,” Montalvao said. “People who used the products illegally started to buy the official software. Also, people who thought that Adobe was just for professionals began to explore our portfolio.”
Besides Creative Cloud, Adobe runs a second business unit called Experience Cloud, which according to Montalvao is one of the fastest-growing in recent years within the company. This division is focused on helping other companies go through their digital transformation process. Currently, the California-based company is most active in Mexico in the retail, airline and banking industries.