Integration and Disintegration


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In September, Adobe Systems, Inc. shook up more than one marketplace when it announced its acquisition of web analytics vendor Omniture, Inc.

The deal caught nearly everyone by surprise, especially Omniture's customers. Whenever there's an acquisition such as this, customers tend to suffer (at least in the short run) as vendor employees shift or depart and product development stutters. In the longer run, these sorts of marriages either prosper (the buyer invests more resources) or wither (the buyer struggles with the new platform and lets it erode over time). Adobe's rationale for the purchase sounds plausible, if only in PowerPoint. The idea is that Adobe Creative Suite (CS) and Flash Platform customers can start integrating usage metrics into their development.

I would be more sanguine about this approach if the two customer bases were well-matched. Adobe sells most of its technology cheaply and in quantity. In contrast, Omniture marketed its devilishly complex and expensive offerings only to the world's largest enterprises. Those customers are also Adobe licensees, to be sure, but I suspect that they are dealing with much bigger challenges right now than exposing usage metrics within InDesign interfaces.

Of course, you can't separate any discussion of this deal from the broader march toward nearly ubiquitous rich internet applications (RIAs) on the web. In theory, Adobe could make it easier to embed Omniture measurement hooks into Flash elements than those of competing analytics vendors.

If so, that would be a loss for everyone. What web marketing people want, I think, is the ability to use their web analytics package of choice-including the free Google Analytics service-with whatever rich application framework their business employs. To be fair, small and medium-sized businesses often prefer bundled solutions. But larger enterprises require flexibility.

Then again, maybe this deal isn't really about analytics. Maybe what Adobe really wants is a proven SaaS platform on which to build other hosted services. Adobe presently offers few solid tools to deliver content and enable business users to easily manage Flash content. However, if it gets more serious about that, SaaS would probably be the way to go.

In fact, when you look at the challenge of rich internet services, surely authoring, managing, updating, personalizing, and simulating are at least as important challenges today as measuring. The typical enterprise web team is probably less interested in empowering the Adobe-fueled Flash designers and more interested in disintermediating them, similar to how website managers (mostly) disintermediated IT when they implemented a web CMS to update text content. "Give me the Flash template and let me take it from there." Adobe doesn't have many good answers for this today.

That's why I think SaaS-based web CMS vendors are watching this deal closely. Vendors such as Clickability, Inc. and CrownPeak, Inc. have venture capital backers that are inevitably going to get impatient and push for an "exit." Some of those VCs doubtless choked when they saw potential suitor Omniture get snapped up.

On the other hand, a fellow SaaS vendor being purchased by a "traditional" software player probably bodes well for that industry as a whole. It opens the door for other creative pairings of on-premise software vendors and SaaS suppliers. I think we'll see more M&A activity here, and soon.

What's a technology customer to do? First, remain wary of vendors extolling the benefits of bundled solutions that mean long-term lock-in for you. Also, look beyond putative product road maps to acknowledge that most major acquisitions are made for financial reasons rather than technical reasons. A vendor product manager may talk about "synergies," but those benefits rarely materialize, at least not for customers.

Then, keep your options open. In part, this means pressing your vendors to remain open to integrating with other services even as they acquire more adjacent technologies themselves. Omniture actually had a bad reputation in this regard-the company didn't seem to want to integrate its analytics services with third-party emarketing and content management services.

Yet there are some success stories here. CrownPeak integrated its web CMS with Omniture's Test&Target multivariate testing service. Content managers can deploy alternative content packages from CrownPeak into Omniture for testing. You have to return to an Omniture dashboard to see the results, which is too bad, since ideally you'd review the metrics in a content management interface where they become actionable. Still, it's a promising example.

Going forward, I think the real action will continue to revolve around integrating management and metrics, less so than integrating design and metrics. And that's why I also think that Adobe isn't done acquiring yet.