M&A Alert—October 6, 2011
Adobe Acquires Nitobi Software
Transaction Size: Undisclosed
Adobe is as a leading provider of desktop software for creative professionals and software development such as Flash, Photoshop, Illustrator and Dreamweaver. Through its recent acquisitions of Omniture and Demdex, Adobe has been aggressively building its advertising analytics and monetization capabilities that are increasingly integrated with its software. Recently, Adobe has shifted its product focus to address the growing opportunity in mobile devices and cloud-based applications. This is important given the explosive growth of smartphones, handheld devices and cloud-based services. Adobe also recently announced TouchApps (the mobile app for Creative Suite desktop software) and CreativeCloud (the cloud-based sync enabler between TouchApps and Creative Suite desktop software). Adobe’s Flash platform has been under scrutiny in light of Apple’s non-Flash efforts and developers’ increasing preference towards HTML5, particularly for mobile applications. In response to the non-Flash movement, Adobe has increasingly showed its support for open-source platforms. The key executive sponsor of the Nitobi Software acquisition was Danny Winokur, GM of Adobe’s Flash Platform.
Transaction value is not disclosed. The PhoneGap platform is open source and available at no charge. The platform support is offered at various packages from $24.95 per month to $1,995 per month depending on level of support.
Other comparable transactions include Intel’s acquisition of Telmap (a cross-platform location-based service platform), Alcatel-Lucent’s acquisitions of Open Plug (cross-platform mobile app development), Programmable Web (cross-platform API mashup), ATT’s acquisition of Plusmo (cross-platform widget development platform) and Salesforce.com’s acquisition of Heroku (cloud platform for Ruby web apps).
Architect Partners’ Observations
With HTML5′s multimedia capabilities threatening to supplant Flash as the leading multimedia software for the web, Adobe had to meaningfully embrace HTML5 and expand its HTML5 offering.
Adobe also needed to support its developer base with a smooth migration path to mobile devices and Adobe’s Flash/Air solution was making limited headway with mobile developers.