Adobe Systems is the house that desktop publishing software built, and now it helps customers create, distribute, and manage digital content in a variety of ways. Among the company's marquee brands are Acrobat, Photoshop, Flash, and Dreamweaver. Adobe serves customers such as content creators and Web application developers with its digital media products, and marketers, advertisers, publishers, and others with its digital marketing business. It not only offers products in traditional software packages but some, such as its Creative Suite (which combines many of its digital media products), are available as cloud-based versions. Adobe operates worldwide, but the US accounts for nearly half of sales.
While its print and publishing segment (about 5% of sales) has remained intact, Adobe consolidated its several other segments into two in 2012: digital media and digital marketing. Digital media (about 70% of sales) includes products such as Flash, Photoshop, and Illustrator. Its digital marketing segment includes a host of tools for creating, managing, and measuring digital advertising and marketing initiatives.
The US is Adobe's largest market, representing about 45% of sales. The EMEA (Europe, Middle East, and Africa) region generates about 30% of sales and the Asia-Pacific region, led by Japan, contributes about 20%.
Sales and Marketing
Adobe sells directly and through distributors, resellers, systems integrators, and retailers. In addition, it licenses its technology to hardware manufacturers for integration into their products. Ingram Micro has accounted for more than 10% of the company's sales in each of the past three fiscal years.
Adobe has seen a decade of strong growth. In 2012 revenue rose about 5% to $4.4 billion, primarily on the performance of its cloud-based subscription products, which grew nearly 50% year-over-year. That segment represented 15% of overall sales, up from 10% in 2011. The company experienced growth particularly in its digital marketing products on strong demand for Adobe Marketing Cloud, its suite of analytics, social, advertising, targeting, and web experience management tools. Adobe's digital media and print and publishing segments were relatively flat year-over-year. Net income in 2012 was also flat at $833 million.
Adobe's digital media and digital marketing strategy is focused in part on driving growth of its cloud subscription model, including converting existing licensing customers to the service. It plans to attract new cloud customers via more frequent product updates and enhancements. The company is also looking to expand into new industry verticals and geographies with its Adobe Marketing Cloud offering.
Mergers and Acquisitions
In 2013 Adobe agreed to acquire Paris-based Neolane, which provides cross-channel campaign management technology, for about $600 million. It is the latest in a series of purchases meant to enhance the company's cloud-based digital marketing suite. In 2012 it bought marketing management services provider Efficient Frontier. The acquisition brings ad campaign analytics and performance capabilities such as social ad buying for Facebook, as well as brand management and other multi-channel optimization functions. It also bought Behance, a social media platform Adobe plans to utilize in the cloud.
In 2010 the company purchased Day Software Holding for about $240 million; that deal expanded Adobe's enterprise content management product line and added tools for social collaboration and digital asset management.