Established in the 1980s, Adobe has grown by developing its own applications (e.g. Acrobat, PDF manager) and through acquisitions (e.g. Magento, an e-commerce platform).
Key to Adobe’s staying power is how crucial it is to the operations of many enterprises, particularly those within the creative industries, with brands such as Photoshop synonymous with digital creation. Adobe was one of the first software companies to transition from a perpetual software model (i.e software licenses that authorise an individual to use a program indefinitely) to a cloud subscription model (i.e. software-as-a-service), improving their earnings visibility and addressable market. They have become the standard to which other business cloud transitions are measured against, with revenue growth compounding at >20% p.a. between FY16 -21.
Adobe is now focusing on digital marketing, a growing area, driven by a usage shift towards web, mobile and social. However, digital marketing is still relatively nascent for Adobe where it does not enjoy the same status as in its traditional creative markets; competition is more intense against several thousand providers. Although digital marketing offers growth potential for Adobe, it is likely to be more challenging to realise.