Connection in the Cloud: How Adobe Is Transforming Its Business – And Beyond
The move from boxed products on shelves to constantly updated product/service hybrids delivered through the cloud is transforming an industry.
Adobe made its name, and built its business, on a traditional sales and marketing model. Moving to a service model offers the possibility to turn huge numbers of unlicensed users into customers – and to understand those customers’ needs and innovate to meet them.
When Adobe Systems was founded in 1982, software was sold on floppy discs. As programs got bigger, they moved onto CD-ROMs, and then digital downloads, but the sales model remained the same – and so did its weaknesses.
Photoshop, Adobe’s industry standard image editing technology – 90% of the world’s creative professionals use it – is often thought to be themost illegally copied software on the planet.
The Creative Cloud
The transformation of Adobe’s flagship design software bundle – Creative Suite – to Adobe Creative Cloud was in part aimed at fighting copyright infringement. It was a controversial move, and many predicted it would hurt Adobe’s sales and profits.
However, in its recent Q1 2014 financial results, announced on the 18 March, Adobe’s revenues were at the upper end of guidance, at a round $1 billion. Creative Cloud’s annual recurring revenue – income from annual subscriptions – grew to just under $1 billion from over 1.8 million subscriptions.
Moving from a product model to a cloud-based service model, with monthly subscription, transformed the way Adobe interacted with itscustomers – and how Adobe’s customers interact with their customers in turn.
Millions of users now provide regular user data, allowing Adobe to identify usage patterns, look for renewal risks and understand their needs better.
And, by integrating its creative and digital publishing tools in the cloud with the Adobe Marketing Cloud offering, Adobe enables itself, and its customers, to connect their digital products, online presences and marketing materials directly to their customer analytics and relationship management.
Understanding the relationship between particular marketing contacts and customer responses is a vital, and often frustrating, challenge. As the old saying goes, 50% of marketing spend is wasted – but understanding which 50% is the difficult part.
In a survey conducted by the CMO Club, the traditional, single-channel view of the customer prevailed. Asked how credit for a sales conversion was attributed, 47.1% said it was given to the last marketing touch, and 19.7% to the first – when a truly connected enterprise needs to see the value of a whole chain of contact.
Adobe’s response, based around in-memory computing, collates and interprets customer data from multiple touchpoints, across potentially millions of current and potential customers, and then employs data visualization tools to create understandable, actionable outputs.
A single view, a clearer picture
Adobe’s move to the cloud has the power to transform not only their own business, but the processes and workflows of the many companies that use Adobe services to develop and deliver digital products. Powered by the speed of in-memory computing, the Adobe cloud can process many disparate inputs and deliver actionable information in near-real or real time.
Simplified by the cloud, the interaction of traditionally separate functions enables new approaches to creativity and marketing without changes to the internal structures of the business. In a rapidly changing environment, businesses need to obtain accurate information quickly, and to innovate rapidly in response to that information.
The ability of businesses to connect to and exploit the cloud, as Adobe has, will be a major factor in their ability to compete and succeed. The cloud’s power needs to be leveraged by the right strategy and enabling technologies within the enterprise. SAP’s Business Suite is designed to integrate with cloud services, and SAP HANA’s in-memory computing provides the speed and capacity to process the many inputs going to and from the cloud.
To see how instant access to accurate, analyzed and appropriate data helped Adobe’s Marketing Cloud to realize record,billion-dollar revenues, download the white paper “ Adobe Gets Personal With Customers”.