Adobe focuses on subscription based services. Adobe used only a licensing model. The company switched to a subscription-based model after launching its Creative Cloud service. Customers are required to pay an annual or monthly fee to access Adobe services. Adobe has maintained its dominance in the software market thanks to its subscription model. Adobe generated more than $17 billion in revenue in the fiscal year that ended in June.
A brief history of Adobe
The company was founded in 1982. Both men worked at Palo Alto Research Center, where they collaborated on a programming language. After PARC refused to sell their invention to the public, they created their own company to sell it to the public. The page-description language was released to the market in 1985. In 1985 the company was able to make over one million dollars. The company went public in 1986 and was able to raise more money.
Adobe Illustrator was released in 1986 The company released a graphics editor in 1989. The 1990s saw the release of new products and improved products from Adobe. They released a new product called Adobe Acrobat in 1993. In the 2000s, Adobe acquired other companies.
Who Owns Adobe
Several shareholders of the company ownAdobe. State Street Corporation is the top shareholder.
Adobe wants to change the world through digital experiences.
How Adobe works
Adobe gives a wide range of software products and services to the public in return for money. There are some Adobe products.
The cloud is powered by Adobe.
Video editing, graphic design, and web development are some of the Creative Cloud applications. This suite contains examples of applications.
Adobe Document Cloud
There are applications for creating, viewing, managing, and sharing digital documents. This suite has Adobe Acrobat DC and Adobe Sign.
Adobe has thousands of fonts from different designers. It is easy to find the fonts in Adobe's creative applications.
Adobe Experience Cloud
Businesses can use Adobe Experience Cloud to create marketing campaigns. There are a few tools within this suite.
How Adobe makes money
Adobe makes money from a number of sources.
Adobe products and services are paid for by professions. There are a variety of plans that users can choose from. Individual plans, education plans, and business plans can be found. A lot of money is generated by each plan.
The license business model is used for some of Adobe's products. One of Adobe's products doesn't need a subscription. Licensing is required instead of it being an option. Adobe makes a lot of money from the one-time fee it charges customers who buy licenses.
Adobe sells advertising services in exchange for money. The Advertising Cloud platform is used by Adobe to generate money.
People can buy and sell stock images through the Adobe marketplace. Every sale on the Adobe Stock marketplace gives the company a certain amount of money.
Adobe Business Model Canvas
There is a business model canvas that explains the Adobe business model.
Adobe Customer Segments
The customer segments of Adobe are listed below.
- Creative professionals: Creative professionals like photographers, videographers, and graphic designers all use Adobe’s products, like Photoshop and Illustrator;
- Marketing professionals: Marketers and businesses who use Adobe Experience Cloud to create and manage creative campaigns are part of Adobe’s customer segment;
- Educators: Some educational institutions use Adobe packages to teach students digital skills;
- Students: Some students use Adobe packages while learning, especially digital skills;
- Enterprises: Organizations using Adobe products like Adobe Marketing Cloud and Adobe Document Cloud fall within this category;
- Individual consumers: Individual consumers are also part of Adobe’s customer segment.
Adobe Value Propositions
The value proposition of Adobe is listed below.
- For Creative professionals: Adobe empowers creativity and digital transformation among creative professionals;
- For Marketing professionals: Adobe provides the tools marketing professionals need to create and manage effective campaigns;
- For Educators: Adobe helps educators impact digital skills in students easily;
- For Students: Adobe helps students develop digital skills;
- For Enterprises: Adobe helps enterprises to digitize business processes;
- For Individual consumers: Access to high-quality software products and services.
The channels of Adobe are listed below.
Adobe Customer Relationships
Customer relationships are a part of Adobe's business.
Adobe Revenue Streams
The revenue streams of Adobe are listed below.
- Stock sales
Adobe Key Resources
Adobe's key resources are listed below.
- Talented workforce
- Technology infrastructure
- Intellectual property
- Brand reputation
Adobe Key Activities
The key activities of Adobe are listed below.
- Software development
- Intellectual property management
- Research and development
Adobe Key Partners
The key partners of Adobe are listed below.
- Tech companies
- Independent software vendors
- Educational institutions
- Creative community
Adobe Cost Structure
The cost structure of Adobe is listed below.
- Administrative expenses
- Cost of research
- Cloud infrastructure maintenance fee
- Microsoft: Microsoft is a leading tech company that creates varieties of software products and services. Some of its software products perform the same functions as Adobe software products, which is why Microsoft is Adobe’s competitor. A few examples of Microsoft’s software products that compete with Adobe’s products include digital media and marketing software;
- Google: Google is a technology company that offers internet-related services. The areas where Google competes with Adobe include analytics, cloud computing, and digital marketing;
- Oracle: Oracle is a tech company that creates software products and cloud services. The company competes with Adobe in areas like marketing automation and content management;
- International Business Machines Corporation(IBM): IBM is a tech company that provides a variety of software services to businesses and governments worldwide. The areas where the company competes with Adobe include analytics, digital marketing, and content marketing;
- Corel: Corel is among the top software companies worldwide, having over 100 million active users. The company is well known for creating high-quality creative software, just like Adobe. Some of its popular software products include CorelDRAW and VideoStudio.
Adobe SWOT Analysis
There is a detailed analysis ofAdobe.
- Strong Global Presence: Adobe’s products are widely used across the globe. The company even offers localized versions of its software in various languages like Spanish, French, Chinese, and more to reach everyone. Adobe has offices in more than 40 different countries worldwide;
- Outstanding portfolio: Adobe has a very wide range of products in media and marketing segments. The large number of dependable products in Adobe’s portfolio is one of the company’s strengths and the reason for continuous growth. While Adobe’s portfolio is very broad, the company ensures that each product within its portfolio has top-notch quality. In fact, some Adobe products seem to have no close competitors. Adobe Photoshop, for instance, is the most dominant graphic design software worldwide;
- Strong Brand Reputation: Millions of people around the world trust Adobe company to continually provide quality products and services. The company was able to gain a strong reputation for itself as a result of its focus on quality products and services;
- Creative community: Adobe’s creative community serves as one of the company’s strengths in a number of ways. The community helps Adobe get timely feedback on its products and even boosts brand loyalty.
- Expensive Products: The cost of Adobe’s products is unattractive to customers, as they are widely considered to be very expensive. Software products from other companies performing similar jobs as Adobe are quite affordable compared to Adobe products. The rate at which customers patronize Adobe might reduce significantly in the future if alternative software products with cheaper licensing fees or monthly subscription fees continue to come into the market;
- Low Traction in the Video Animation Market: One would expect Adobe to have a strong presence in the video animation market, just as it does in the graphic design market. However, the company has a very low presence in the video animation market despite having software products for creating 3D animation. Animator creators prefer to use software products from other companies since other products seem to offer better features compared to Adobe Premiere Pro;
- Limited support for Linux Operating Systems: Adobe’s failure to officially release most of its applications for Linus OS is widely considered to be a major weakness for the company. For instance, Photoshop isn’t officially compatible with Linux OS. While Some Linux users can still use Photoshop on their computer via virtual machines, only a few Linux users will choose to go through the complex processes required to set up Photoshop on Linux. They will instead use alternative image editing software;
- Complexity: Almost all Adobe software packages have several advanced features that require significant effort and time commitment to master. The advanced features are usually overwhelming for starters. The complexity of Adobe packages might discourage beginners from testing Adobe packages, but rather try out other beginner-friendly software packages.
- Expansion: Adobe can use its strong position in the market to expand its products, either by acquiring other promising tech companies or creating new products. The company may even expand the capabilities of its existing products, especially in the video animation market. A few examples of segments where Adobe has the opportunity to expand include Artificial Intelligence (AI), Augmented Reality (AR), and Virtual Reality (VR);
- Ability to Leverage Cloud Computing: Cloud computing gives Adobe a significant number of opportunities that the company can utilize to grow. For instance, Adobe can create AI-powered tools using cloud computing;
- Partnership with Other Tech Companies: As a reputable brand, Adobe has the opportunity to partner with other great tech companies like Microsoft to achieve bigger goals. For instance, a partnership between Adobe and another top tech company can help Adobe access new markets and integrate its technology with top hardware manufacturers.
- Security Threats: As a leading software provider, Adobe is one of the top targets for cybercriminals. In the past, hackers have developed various kinds of malware and viruses for Adobe packages just to gain unauthorized access to the devices of people who use Adobe packages. Cybercriminals aren’t the only people who pose security threats to Adobe and its users. Adobe’s contractors and even employees also pose some level of threat as they have access to very sensitive user data, and they may wish to exploit the data if they lack integrity;
- Piracy: Piracy is one of Adobe’s major threats. Piracy harms the company by significantly reducing the revenue Adobe gets from subscriptions. If pirated versions of Adobe products continue to increase excessively, the company may no longer have enough financial resources to invest in research and expand;
- High competition: Adobe is one of the tech companies facing the highest level of competition. Adobe faces increased competition in areas like video editing, marketing, graphic design, marketing, and more. If the company fails to keep improving its product, its competitor may succeed in making Adobe irrelevant in the market;
- Open Source Software: Open source software like Blender, GIMP, and Inkscape perform almost the same function as Adobe packages like Photoshop and Illustrator. These open-source software serve as threats to Adobe, since some people will prefer them to Expensive Adobe software packages.
After paying a monthly or yearly fee, customers can access Adobe products and services. The company makes more money from sales of some services. As it diversifies into new markets, the company is likely to increase revenue.