Adobe Acquires Workfront, Plays $ 1.5 Billion on Work Management
Digital and multimedia marketing software giant Adobe yesterday announced it has acquired work management pioneer Workfront for $ 1.5 billion. The price reflects the growth currently seen in the industry, which also includes the recent Asana IPO, developer favorite Atlassian and many smaller, venture-backed players. But with marketing teams taking the lead as early adopters of these platforms, is Adobe just acquiring an add-on to its existing tools for marketers? Or is he considering a much bigger opportunity?
Upon closing of the acquisition, Workfront will become part of Adobe’s Digital Experience business unit under the leadership of Anil Chakravarthy, who was CEO of integration provider Informatica before joining Adobe in January. Adobe’s announcement of the deal underscored the combination of Workfront with its Experience Cloud to “bring efficiencies, collaboration and productivity to marketing teams currently faced with siled work management solutions,” adding that one-third of Workfront’s 3,000 customers are already Adobe customers, including Deloitte, Under Armor, Nordstrom, Prudential Financial, T-Mobile and The Home Depot.
Workfront CEO Alex Shootman, who after the deal is closed will report to Chakravarthy, stepped up the marketing emphasis when he spoke to Bloomberg about the deal:
When you have the opportunity to work with the company that CMOs rely on to run their business, which is Adobe, and you are a company like Workfront, it takes us years to come. terms of what we could have accomplished on our own.
Workfront is not just about marketing
Yet characterizing Workfront as only targeting marketing teams doesn’t say the whole story. Take the case of its client Prudential Financial, whose adoption started within the marketing function but has since spread to many other areas of the company. Speaking at Workfront Analyst Day a few weeks ago, Kevin Brucato, who is not only vice president of creative operations but also head of the financial services group’s âFuture of Workâ internal transformation strategy, described how he uses Workfront to onboard new hires with integrations. in Workday, ServiceNow, Office 365, and Sharepoint. Workfront has become the default platform for automating a variety of processes that cut across many different applications and functions. He explains:
This allows our users [to] stay in those environments they are comfortable with, but then extract the data and move the conversation or information to a source of truth.
The same pattern of incremental expansion to other functions has been repeated with many other Workfront customers. Creative or marketing teams are showing what can be achieved by automating and tracking their work and others are starting to follow suit. Some of its largest customers are now using Workfront in more than a dozen different functions, after using exponential growth over the course of several years. Shootman has positioned the company as providing “an operational record system” that helps companies help all their employees achieve more through intelligent automation of collaborative work. He says:
We are managing human capital the same way we have learned to manage factories and equipment.
A double whammy for marketing teams
Of course, there are currently many opportunities for Workfront departments within Adobe’s customer marketing teams. This year’s pandemic has increased the importance of digital engagement while forcing marketing teams to work in a distributed fashion outside of the office. It has been a double whammy of increasing workload alongside having to adapt to new models of digital teamwork.
This is fertile ground for Workfront, which has defined a whole maturity model for work automation. It is able to deliver a level of sophistication by helping teams automate and manage the workflow that allows them to overcome the inefficiency of endless video meetings and Slack messages. The trick is to both automate the processes and start collecting and analyzing data about the workflow itself.
Workfront also has a lot of experience – for example at Under Armor or the CenturyLink marketing team – helping Adobe customers create workflows that span the different components of the Experience Cloud as well as the assets developed in Creative. Cloud. As Paige Erickson, SVP Business Development at Workfront, told Jon Reed of Diginomica in April 2019:
I think Adobe sees it too, that there is this workflow that has to happen between these two clouds, and we are this secret sauce that allows that …
[For example] If you’re in Creative Cloud, you don’t have to leave Creative Cloud. You can send proof of anything you want your manager to review through Workfront. They review it and send it back, mark it, and it’s very transparent. Once you’re done, if you’ve created a campaign or something like that, you send it through Workfront, and we’ll integrate it with our AEM integration, and then you can go ahead and deploy that campaign through Adobe.
But Workfront also has integrations and partnerships with many other vendors besides Adobe, including CX rival Salesforce, ServiceNow, Microsoft, and Google. They remain important for the automation of processes that customers value. Is the opportunity within Adobe’s own territory now so great that it’s worth restricting Workfront’s attention? Or is there a bigger shot waiting behind the scenes?
The deal is expected to close between December and February, in Adobe’s first quarter of fiscal 2021.
The dangers of a significant change in control for a supplier’s existing customers are well established. But I find it hard to believe that Adobe will simply reject Workfront’s broader ambitions and limit its remit to the marketing function. On the one hand, this may offend some of Workfront’s larger customers, many of whom are also major customers for Adobe. Of course, the focus will be on marketing, as this is where the lowest fruits can be found as a result of this deal. But Workfront’s experience beyond marketing allows Adobe to not only consolidate its hold over marketing teams, but also extend its reach across the enterprise.
Also, don’t forget that Adobe is already present elsewhere in the company through its Acrobat franchise. A decade ago, Adobe had an ambition to integrate this presence into a much larger portfolio of cloud-based productivity tools. Perhaps those ambitions will be rekindled following the acquisition of Workfront – and the hiring of Chakravarthy – to further expand into the digital teamwork market. If so, expect more acquisitions to follow, most likely in cloud content or perhaps messaging, as Adobe expands its collaborative canvas to guide the progression of teamwork across the board. ‘business.