Adobe’s $200 Billion Unshakeable Moat

Few brands can boast of being able to avoid disruption. Fewer still can boast of building a tailwind on the wings of it.

Adobe is a perfect example of a brand that had to change in order to grow. At the point of change is where the magic begins.

$11.17 billion! That’s how much revenue Adobe pulled in 2019 alone.

Every December since 2015, Adobe has hit a new revenue record, even ending 2019 with a remarkable 23.7 percent year-over-year growth!

As of today, Adobe boasts of:

• 4 billion backlinks
• 57 million+ organic visits a month
• 917,000 YouTube subscribers
• Rank for 15 million+ keywords
• 6 million combined Twitter followers
• $39 million+ worth of organic traffic
• $220+ billion Market Cap

How Adobe Avoided Technology Disruption

These are just some of the products offered by Adobe, as listed on its website. You probably can’t tell from this screenshot but notice some of the categorizations:

• Creativity and Design
• Marketing and Commerce
• PDF and Signatures
• Additional Services

Did they always start out with this clear-cut vision?

Let’s rewind to 1982. Adobe started with a focus on the creation of multimedia and creativity software products. Cut to 2020, they’ve adjusted to the current trends and market and made a foray into the digital marketing software world.

Do you remember the time when Adobe products came in a box? It was pricey. For example, buying a perpetual license of Photoshop would cost you $699— which made it restrictive for a particular set of people, say, students and freelance designers.

When the entire enterprise world was moving to the cloud, Adobe saw an opportunity, acted on it promptly, and adopted the SaaS model in 2013. Adobe products were now cheaper and the customers could stop using them whenever they wished. This resulted in them adding 4 million new users in two years.

Thirteen million customers had purchased the boxed software before Adobe switched to cloud licensing for only $10 per month. Adobe made this rapid transition by ripping the bandaid and stopped offering support for the licensed products.

As expected, the revenue dropped from 2011 through 2014 as the up-front earnings from boxed software ended, but eventually, the recurring revenue model began to yield profits.

By the end of 2024, Creative Cloud is forecasted to have 19.74 million subscriptions.

Adobe’s success has also been attributed to smart acquisitions. These include Macromedia in 2005, which gave them entry to Flash, or Magneto, Marketo, or most recently Workfront.

While the majority of Adobe’s earlier products were focused on catering to graphic design only — eventually, they learned that to be more valuable and irreplaceable, they had to expand their offerings to new verticals within the marketing and creative function. More recently, they’ve started to focus on providing  Artificial Intelligence (AI)-driven solutions to the entire marketing team, calling it ‘Experience Cloud’.

This strategy of bundling software and delivering them at a lower cost has proven favorable for Adobe. When enterprises choose vendors, they would rather deal with one vendor who can provide increased value than pile up more vendors.

Adobe’s wide portfolio of products gives rise to the million dollar question, “How are they managing support for all the products?”

SaaS customer support is no joke. But Adobe is managing Photoshop, Acrobat, Reader, Illustrator, Spark, Reader, Advertising Cloud, Magento, Behance, and more with excellence and ease, thanks to the active community they’ve built over the years.