According to Fred

The musings of a marketer and tech geek.

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Adobe Buys Magento: A Good Fit or the Best of What’s Left?

Disclosure: I work for a company that is a Premier partner of Adobe and have partnerships with other vendors mentioned in this article. I do not have access to technical or product roadmaps or have any insights into M&A for any of them. The following is purely my thoughts and opinions and do not represent my employer’s opinion.

Last week Adobe announced that they were purchasing Magento, an eCommerce platform for $1.67Bn. The company has been bought and sold twice previously. eBay bought Magento for $180M, then sold it as part of their enterprise commerce platform to private equity firm Primera. We’ve had a week to digest what this acquisition means for Adobe and their overall Experience Cloud Solutions and what it means for Magento customers, who are primarily not enterprise. Let’s dig in.

The Need for Owning a Commerce Solution

It’s no secret that Adobe needed to do something around a commerce solution. While they have been filling out the other parts of their Experience Cloud with solutions such as voice with Sayspring, video advertising with TubeMogul and user-generated content with LiveFyre, commerce was a place they have flirted with in the past, but never got over the finish line. With a focus on the enterprise market, Adobe over the last decade only had a few options to really pursue — DemandWare, and Hybris. I can only assume Adobe did explore those options but as we know, Salesforce nabbed DemandWare two years ago and Hybris went to SAP five years ago. With those two companies off the market, a big hole was left in the marketplace from an M&A perspective.

Since then, Adobe seemed to focus on the remaining commerce platforms with what appeared to be more integration partnerships while they figured out their next steps. ElasticPath had a run at it, but have now appeared to be strategically aligned to BloomReach. If you look at the Adobe Exchange for their Experience Cloud, you will see there are plenty of commerce vendors that integrate with Adobe Experience Manager (AEM) such as Digital River, Elastic Path, IBM WebSphere Commerce, SAP Hybris, CloudCraze, Agility Multichannel (a PIM system), commercetools, and yes, Magento. So to say that creating commerce experiences within the Adobe Experience Cloud couldn’t be done before is clearly not the case. In fact, companies had options one way or another.

With all of those solutions out there already integrating with the Experience Cloud, why did they need to purchase one? I think there are a few reasons.

  1. It is always better to be in the driver’s seat of any major component of an ecosystem you are either building out or supporting. Many of Adobe’s customers have a commerce component to their Marketing Technology stacks and integration at times only goes so far.
  2. Products and commerce complement each other but are indeed different. While many companies can put product information into AEM and use taxonomies and other metadata to manage the assets, it’s not really built for commerce. It’s meant for content. But when you have product pages and search results, AEM shines. So like peanut butter and jelly, they need to go together.
  3. Their customers were asking for it. There are plenty of Adobe customers who own the entire Experience Cloud, but when it came to this part of their needs, customers had to go elsewhere. While that isn’t always the case and not everyone needs commerce, at the enterprise level which is where they play the most, many do.
  4. More revenue. At the end of the day, it is a missing piece of revenue from a subscription model for their software. So grab that last piece of the pie.

Looking at these tools above who are already integrating into the Experience Cloud, really only one tool could have been viable for an acquisition, and that was Magento. The acquisition does still raise a few eyebrows for a few reasons, but none that haven’t already been overcome by Adobe in the past.

PHP or Java or Cloud or What?

When we first heard about the acquisition in our office some of the first reactions were, “well isn’t Magento PHP based?” And it is. Even Forrester analyst Ted Schadler raised the question on Twitter.

Adobe finally found a commerce platform to buy. I like that it’s plugging a hole, particularly for manufacturers just starting out in commerce. But tell me how PHP/cloud Magento and Java/to-the-datacenter-born AEM are going to integrate? – @TedSchadler

So the short answer that I think all of us are responding with is clearly it will be API based….for now. There is a precedence at Adobe to purchase non-Java based solutions and spend the time and energy to rebuild them in Java and the most recent and still dual code-based solution is Adobe Campaign. When Adobe bought Neolane years ago it was a .NET solution and a fat client even. What is now Adobe Campaign “Classic” is still this .NET solution. The new Adobe Campaign Standard is the rebuilt Java/cloud-based solution that is working towards seamless integration with the rest of the Experience Cloud. (Also, again one of those situations where Adobe didn’t have a lot of choices after other email campaign tools such as ExactTarget and SilverPop were picked up by other companies). Whether Adobe decides to rebuild Magento into a Java/Cloud solution is yet to be seen. It could if it wanted to.

Headless is the New Black

Notice I didn’t say eCommerce above, but just commerce. That’s because as we look at the future of experiences, it’s not always going to be about the traditional “e” solutions. In fact, we are hearing more and more about the headless experience. That actually is more of where Adobe is now headed when you think of AEM anyway, as a headless content management system. So to purchase a commerce solution that can power any experience from web to mobile to in-store to voice to AR and VR, it’s not going to be about just one channel. So be on the lookout for where this goes. I expect to hear more about “commerce” as the integration discussion, not eCommerce.

Taking Advantage of Sensei

AI be damned that it isn’t the biggest buzzword and probably misunderstood in the industry right now. That being said, Adobe sure has a gem on their hands with Sensei. Content, commerce, and data are the three biggest assets in building out smart AI and Machine Learning to build personalized experiences. It won’t just be about upselling/cross-selling. This is about delivering personalization at scale down to the individual. The “segment of one.” Sensei is already doing a lot in the Cloud for Adobe. Adding commerce data (products, pricing, attributes, etc) will just empower marketers and merchandisers to do more.

So…Good Buy or Best of the Rest?

Missing out on the larger, enterprise platforms like DemandWare and Hybris were stingers, for sure. However, those were big, hairy platforms and integrating enterprise to enterprise is no walk in the park. Going for something smaller, in a different market segment like mid-market might not be all that bad. There are only so many enterprise clients out there and three major experience platforms all vying for their attention. So maybe mid-market won’t be a bad move.

Adobe also has a history of purchasing solutions that have deep open source roots. Day Software, what is now AEM, was built on open source standards like JCR and OSGi. There is still a very deep developer community around AEM and having a deep community supporting Magento could be very good.

I think time will tell, but as we’ve seen with Adobe, there are very few instances where an acquisition doesn’t end up paying off for them. It will take some time to get the Magento platform integrated deeper into the Experience Cloud. It will take time to grow into enterprise clients more holistically. It will take time for the strategy to really come to fruition. In any case, Adobe needed to do something, and Magento is as good of a purchase as any other.

NOTE: A version of this was originally published on LinkedIn.

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My Love-Hate Relationship with Facebook

Unless you’ve been under a rock the last few days, you probably know about the recent Facebook news about the data breach/violation via Cambridge Analytica.  I had a brief discussion with my friend Ross Quintana on Facebook Live the other night too, but I, unfortunately, didn’t have time to really dig into the topics that have been on my mind around this whole incident.  I’m not going to lie, I struggle with Facebook.  We have a love/hate relationship and this incident with Cambridge Analytica is just the tip of the iceberg when it comes to things like data privacy, internet companies revenue models, the ignorance of “free” services, and possible regulation of the Internet.  Just to name a few.

I have drafted a post that I never published citing that I uninstalled the Facebook app from my phone about a month ago.  And I did.  But, I reinstalled it during a recent business trip where I wanted to share more content with my friends and family while gone and Facebook was the medium to do it.  And frankly, that pissed me off.

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Facebook Stopped Being Relevant

You see, Facebook has become a place where I don’t like to spend time, but I need to spend time for some valid reasons.  Let’s start with why I deleted the app a month ago.

I used to really enjoy catching up on activities my friends, co-workers, and family were doing.  We used Facebook as a platform to connect.  Wow, I feel like I could be an employee right now.  “We are here to connect the world.”

What it has turned into today, with algorithm changes, ads, friends and family publishing the most inane, irrelevant crap (I don’t care which answer you picked on this “thing from my childhood that isn’t around anymore” posts) it drives me insane.  It is an endless scroll of just junk.  I’ve clearly clicked “Like” on too many pages of interest (Runners World, please….you don’t need to post 18 times a day, I promise) where if it isn’t crap from my friends and family, it is just published content from these pages.  My thumb is getting cramps just flipping through irrelevant stuff to find the one or two pieces of gold that I care about.

via GIPHY

I’m pretty sure my friends and family are indeed publishing stuff I care about.  Facebook just doesn’t seem to want to show it to me anymore.

Why I Can’t Just “Quit”

I really wish I could.  Just export all my data and “let go” of Facebook.  However, I can’t.  I can’t because there are valuable reasons and tools that Facebook offers to connect communities together.  Specifically, I run a private running group and I’m a leader/contributor to my son’s Cub Scout Pack and we use Facebook Groups and Pages to communicate and recruit.  In addition to all of that, my company has several pages where I need to be an admin.  If I were to quit I’d be taking myself out of some key responsibilities that I’m currently assigned to.

To be fair, these tools work.  We have the engagement we want and it continues to grow, so we are getting value.  It is a positive thing.

We’ve Created Our Own Mess

If we want to put a blame on why Facebook has become so important to many of us (and as a Nation) we have no further to look than in the mirror.  As a culture and society, we are creatures of habit, greed, narcissism, empathy, and followers (and leaders).  Facebook started as something exclusive.  Then it grew to be where all the “cool kids” hung out.  They opened up the walled garden because they know they could profit with more users, more data, more opportunity for advertising.  Then the people came and we ate it up like a hot fudge sundae.  We got the dopamine hits when we got a “like”.  Then we got “love, laugh, ha ha, WOW!” and more.  We just can’t stop.  It’s “free”, so, share with the world and maybe we will go “viral” and get more attention.

Look, folks, Facebook is a melting pot of all that is good and bad with the world.  It connects communities, it profits from our “licensing” of our data and information so they can create hyper-targeted ads for companies.  We are feeding the beast because we can’t quit.  Sigh.

I’m Going to Stop Here

So this is where I’m going to stop.  I have several other thoughts on all of this, with the topics mentioned above.  However, I’m going to try to record some of these thoughts with video and then publish those as my medium of discussion.  What are your thoughts?  Let’s discuss below.

 

 

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Mining for Personalization: How Far is Too Far?

How far are companies willing to go with technology to mine data and gain insights to deliver personalization to us?

I was in a conversation last week at work and somehow we got on the topic of voice and other “creepy” examples we see or interpret that leads to ads appearing on our devices. One example given was a co-worker was in her office with our summer intern at the time and was discussing a purchase she made on her computer on Amazon. The next day our intern stated that she started seeing ads for that same item on her Facebook feed. Two different users, different devices, not even an item the intern would have purchased, but ads are showing up now on her computer.  This wasn’t the first time I had a conversation like this where ads would start to appear based on verbal conversations.

The conversation went further with someone else stating that they read Facebook was experimenting with analyzing the dust patterns on your photos from your cell phone lens to match people who are or are not connected and other data mining like Geo, proximity to each other, behavior patterns, etc. Now, Facebook isn’t actually doing this, but the idea that using location data or even dust to identify people who may show up in the “you may know” area, it does get creepy when you think about it.  (NOTE: Facebook does neither, but not without admitted experimentation. See link above.)

We’ve heard the stories of apps using the microphone to listen in on conversations and TV shows for ad targeting. How far are tech companies willing to go to mine your data, behavior, and other attributes to deliver personalized, content, experiences, or in many cases just ad targeting?  Farther than many of us realize.

Let’s be clear, if the dust analyzing freaks you out, you are uploading photos to a “free” service in which I’m confident somewhere in their Terms of Use states they can do this. You agree to those terms every time you use the app or website. A nice reminder of what “free” means in the age of the Internet. So when we are willingly providing data to a third party, how can we not expect them to mine this data to experiment and possibly deliver more value to you?  It’s a fine line of value vs. trust.

Even as a marketer, I myself feel there is a limit we need to adhere to. I’m right there with the next marketer who wants as targeted of an audience as possible. We all want the Segment of One. To get there, it will take a lot of technology and analyzing data points. But dust specs on a smartphone lens from a photo that was uploaded? Seems a little too far to me.

So how far are we willing to go?  How desperately do we need data, attributes, behaviors to map to get that customer?  Are we willing to play the “everyone just clicks accept” to get the app or use the site?  How much are we willing to build then break trust with our customers to get to the segment of one?

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Pick Your Words Wisely in a World of 140 Characters and 5 Minute Talks

Two things happened this week that reminded me of the need for concise, clear, communication.  First, I gave an Ignite presentation and the second was that Twitter announced it was going to up the character limit from 140 to 280.  In both instances, brevity is the key.  Be clear, concise, to the point, and get on with your day.  There is something to be said for being concise, and the act of Tweeting keeps me on my toes every day.  Planning and prepping for an Ignite talk…even more so.

Ignite: 5 Minutes, 20 Slides that Auto-Advance – What Could Go Wrong?

About three weeks ago I submitted a talk to Ignite Chicago with the hopes of doing what many think is insane.  Besides it being public speaking, it follows a very specific format.  You get 5 minutes, 20 slides, and they auto-advance.   I’m used to giving 20, 30, 45-minute talks.  In those cases it is often a challenge to keep a flow going, thinking about how to keep the audience engaged, and delivering key points.  With an Ignite talk, if you blink an eye it will be over before you know it.  It often takes 5 minutes just to tee up the topic, let alone get through it!

The good news is that I was selected which meant ‘Game On’ to find a way to talk about a somewhat complicated topic — digital assistants and voice tech — and make it worthwhile to the audience.  The challenge was mapping out a series of slides that told the right story with the right words.  You had to be quick and concise because that slide was changing whether you liked it or not!

Two things played into my advantage.  First, I think having done public speaking before helped me know only you really know your mistakes (for the most part).  Second, I talk fast!  The only time when talking fast might be beneficial.  Though, I’m not really sure it is.  You sound rushed and appear to be trying to do too much in the time allotted.  I will say that night there were better presenters than me, but the crowd was complimentary none the less.

140 Characters Gets Tough at Times.  280 May Be Too Much

We all know Twitter is used in many cases as a sounding board, a content curation machine, a two-way, or one-to-many conversation, and sometimes just a bullhorn.  The premise of Twitter was always to be concise and to the point.  Then this happened.

The Twitterverse collectively lost its mind over it.  Which is to be expected when you start to monkey with something that has been established and comfortable.  140 characters made us all editors, get creative with our writing, and introduced a ton of acronyms to help shorten the messages.  Twitter has its reasons for expanding the length of a Tweet.  However, many are criticizing that 140 is enough.  I even took a poll of what feature should Twitter actually implement.

The expanding the character limit wasn’t even selected. More people wanted an Edit functionality than anything else! That even caused a spirited debate with my circle of friends on what should be done, how an Edit feature should work, and even went to the extent that Twitter’s bigger problem is about community engagement, not the length of a Tweet.

When Being Concise is an Art and a Science

This leads me to the general point.  We spend a lot of time writing things, talking, engaging with others and at some point wasting everyone’s time because we aren’t concise and to the point.  There is a fine art and science behind having brevity and clarity in your communications.  Twitter was one of those few platforms (certainly not a blog like this one) where you had to be concise or it didn’t work.  With Ignite talks, you only get five minutes to talk.  It was a challenge, to say the least, and one that I want to do again, so I can be better at it.  So I challenge you.  Regardless if Twitter goes to 280 characters, or if you have a 60-minute presentation coming up.  Try to be as concise as possible.  Get to the point in the least amount of words possible, but with clarity and consistency.  You can apply this to all parts of your work and personal lives.  So give it a try and see what happens.  You might find yourself with more time to get things done.  Not a bad trade-off.

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Did Google Have a Better Choice Than to Partner with Walmart?

Short answer?  Probably No.

Let’s dig in.  Amazon is the 800lb gorilla in the e-commerce world.  They dropped the bomb of the Echo years before anyone could respond, and Google was the first at-bat with their Google Home.  However, both companies have very different pedigrees and therefore are tackling the same problem – how to command more of their consumer’s wallets and kitchens/living rooms – two very different ways.

Foundations Set the Tone and Challenges

The battle for consumer’s homes is in full force.  Amazon is now on their second version of their Echo in-home speaker, one with a screen, continues the push even more.  Google responded, finally, in the last year with their own speaker.  Both companies have been going head to head with features such as outbound phone calling, access to news and podcasts, and skills/actions galore.  However, the root of the why each company wants to be in your house has to do with their core services – e-commerce and search.

For Amazon, they’ve always been about e-commerce.  Whether it was becoming the marketplace that everyone compared prices to while in-store, to creating physical devices such as tablets and phones, it was always about content and purchasing that content.  The creation of Prime just solidified their presence as a dominant e-commerce vendor.  With the launch of the Echo and putting a direct ordering system in the kitchen of more than 11 million Echos according to Morgan Stanley at the beginning of 2017, it’s no wonder why everyone wants to catch up.

But Google’s history and money making are rooted in search and ads, not commerce.  For Google to make money with their in-home speaker, it needed to have a different approach and needed to go head to head with the e-commerce giant.  An uphill battle to say the least.  Google made some smart choices when it launched to play catch up to Amazon.  It didn’t focus on e-commerce out of the gate.  It focused on its strengths — organizing the world’s information and delivering it via voice.  Ask your Google Home anything related to information and it would beat out an Amazon Echo and Alexa the majority of the time.  But searches don’t’ make money.

 How Do You Beat a Giant?  You Partner With Others

I wrote earlier about my dissatisfaction with Google trying to beat Amazon when they moved their “list building” from Google Keep to Google Express.  While I knew Google had to figure out a way to make money, I didn’t think the time was right to move one of the key functions I found most valuable of the Google Home.  While my list couldn’t order and deliver goods to my door, I really just wanted the convenience of building my grocery list with my family.  It wasn’t until recently that I even tried to order some goods from Costco via Google Express.  The experience wasn’t as nice as I would have liked.  More on that later.

Then Google announced they were partnering with Walmart to take on Amazon.  Amazon had since acquired Whole Foods and again, everyone is fighting for the kitchen and the home.  At first, I will say I wasn’t thrilled.  Walmart?  Really?  Maybe it is personal preference on where I shop, but my initial reaction was why not Target?  It took me about a day and some conversations at work for me to realize it isn’t about any opinions or personal feelings I had about Walmart or shopping there in person because I wasn’t going to be “shopping” there in person.  It is about distribution, access to masses of goods, both grocery and textiles and electronics.  Google doesn’t have the logistics network that Amazon does.  Google doesn’t have the huge inventory of goods that Amazon does.  If Google was going to compete with Amazon at the e-commerce level, it couldn’t rely on all the niche stores in Google Express.  It needed the next best e-commerce retailer in their corner…and Walmart, is it.  Walmart needed Google because they couldn’t innovate fast enough and needed to get direct access to their Google Assistant.  Oops, did I just say Google Assistant vs. Google Home?  Yes, because that’s really what Walmart wanted access to.  The millions of devices that will have the Google Assistant on board which is not just Google Home, but Android devices.

It’s Game On

So it’s game on in the hunt for the voice-driven e-commerce world.  Digital assistants like Google Assistant and Alexa are going to go head-to-head for a long time.  Both Google and Amazon are taking hardware and software routes to get to the most consumers possible.  The reality is that Google is fighting an uphill battle as it relates to e-commerce.  The partnership with Walmart was a smart one.  Amazon is fighting an access battle.  While Google and the Google Assistant is not just in a Google Home, but third-party speakers and millions of cell phones, Amazon’s phone attempts have failed.  It is only with a recent partnership with Motorola that Alexa is getting baked into handsets with the MotoZ2.  It’s going to be an interesting next 18 months as the Walmart/Google relationship gets off the ground.  Did Google have a different choice of who to partner with?  Not really.  Currently, Amazon is #1 according to the National Retail Federation of top e-commerce websites.  Walmart is #4 and Target is #26.  Enough said.