Adobe: a Digital Transformation CompanyBy Andrea Villar | Thu, 02/04/2021 - 05:00
Q: Adobe's market value has increased twelvefold in eight years. What were the keys to this achievement?
A: Adobe is a technology company known for its program portfolio that includes Photoshop (PS), Illustrator (AI) and InDesign (ID). The company went through a major transformation in 2010. The digital transformation in industries had not yet begun but the company began to look for ways to grow exponentially, considering the advantage of having a leading product in the market, with loyal customers and few competitors.
As a result, we decided to reinvent the company. Many years ago, customers had to visit a brick and mortar store to buy Adobe and then install it at home. Even so, customers did not have a close relationship with Adobe, meaning that users did not know when there were updates or any news regarding the programs. That is how the idea of making the business 100 percent digital came about. But it was not just about digitalizing processes. Adobe also extended its product portfolio and began to offer cloud services, which made the Creative Cloud more attractive as new version releases would be more frequent and would not require a reinstallation of the program. Moreover, the business changed to a subscription model. Customers stopped buying the software and moved to cheaper monthly subscriptions. The high price previously paid was an entry barrier for new users, which also contributed to clients choosing counterfeit alternatives.
The plan worked and people who did not buy Adobe because they could not afford it began to subscribe. 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.
These efforts helped the company achieve record quarterly revenues of US$3.13 billion in 2Q20, representing 14 percent growth year-on-year.
Q: Why did Adobe decide to add digital transformation solutions for businesses to its product portfolio?
A: Adobe needed technology for its own digital transformation and began to hire smaller startup technology services. The challenge was to integrate all this technology from different providers. Adobe recognized that there was no technology company in the market that offered enterprise solutions to help other companies go through their digital transformation process. Once the company saw this opportunity, it bought the companies that were its first suppliers and created the Adobe Experience Cloud.
Since then, the company has had two businesses: Creative Cloud and Experience Cloud. The latter is the business that has grown the most in recent years. A few months ago, Harvard Business Review published an analysis on the last decade’s digital transformations and placed Adobe at No. 2, only after Netflix. Likewise, during the first months of the pandemic, The New York Times issued a study on the companies that grew the most during the crisis and Adobe was ranked 17th. We know that the future is digital and evidence of this is that the company recorded its all-time high in terms of revenues during the pandemic.
Q: Which industries does the company tackle with its Experience Cloud business?
A: Our greatest presence in Mexico is the retail industry, along with airlines and banks. The latter is an interesting industry because it is a sector with a very traditional business model. However, when fintech companies entered the market, they disrupted the sector’s playbook. They demonstrated that it is possible to have more modern, digital and consumer-focused business models. In Brazil, for example, we have Nubank, a neobank that traditional banks underestimated when it first arrived in the market. Today, it is one of the largest banks in that country. Digital transformation is not an overnight occurrence. It is a process that takes years as technology, culture, processes and business models transform.
Before the pandemic, companies believed they still had time to start their digital transformation process. However, startups have grown at an accelerated pace and are now the leading players. What traditional companies had planned to do in three years, they had to do in two months.
Q: What has been the transformation process for Creative Cloud?
A: Adobe's motto is Creativity for All. The company's purpose is to democratize the use of technologies so everyone can be creative and tell their own stories. With technologies like Spark Post, Ps Camera or Premiere Rush we want to provide ordinary people with tools they can use to be creative and express themselves. In the past, to be an Adobe user you had to be a photographer or a designer. The world is mobile now and we understand that. The first thing people do before they get out of bed and go to sleep is to check their mobile phones. Creative Cloud’s objective is to migrate our apps to mobile phones. Meanwhile, Experience Cloud makes the mobile experience an integral component of the corporate strategy. In each solution we develop, we take into account that the client has their mobile phone at all times.
Adobe is an American software company known for its multimedia and creativity software products like Photoshop, Illustrator and InDesign. It also offers digital transformation solutions