Like many in the industry, I’ve been mulling over the reasons behind the deal announced by Adobe and Omniture for the former to acquire the latter. My initial reaction was that of many observers — it makes no sense.
If finally dawned on me, though, that this deal isn’t about advancing how analytics is used in the enterprise. Much more simply, it’s a business development dream come true. For Omniture, it is simply about gaining access to more page views. The more Adobe assets that can be tagged automatically upon creation (or delivery), the more revenue can be generated through the Omniture business.
Adobe benefits from this too, as any incremental revenue to Omniture benefits Adobe overall. But, for Adobe, the deal is not about owning an analytics solution provider. It’s about being able to provide performance measurement data at the asset level. Its not about getting data into Omniture, but rather, using the Omniture infrastructure to provide performance data in whatever applications Adobe wants to.
The synergies, upon thinking about it this way, are stunning. And its easy to imagine adobe developing new applications or solutions based on this newly acquired analytical capability. With some work and maybe another acquisition, I wouldn’t be surprised to see Adobe become a serious contender in CMS with an offering that married asset (content, images, applications) creation, storage, delivery with a runtime that does targeting and testing, and with data available from the perspective of each of these tools processed and provided back to the system by Omniture. This deal is more about adding value to Adobe’s existing assets and creating something new than it is about bringing something new to Omniture customers or advancing how “web analytics” are used in the enterprise.
I also would not be surprised to see Adobe get into the ad serving game, taking advantage of the move toward social apps in advertising. Adobe Air is positioned here for app development, and Scene7 as well as other products have serving capability. Leveraging the data infrastructure of Omniture could provide for built in measurement, without needing an Omniture account directly.
One of the big criticisms of Omniture (and other web analytics vendors) has been that they’re headed headlong into competing directly with Google Analytics. The underlying assumption of that criticism has been that Omniture somehow didn’t get that. I think Omniture understands that at its core. This deal reflects Omniture’s understanding that Google will completely commoditize the stand-alone web analytics solution market, and that the future of any current stand-alone analytics solution is to become embedded in other solutions.
We as an industry have been trying to understand this deal based on our own navel gazing about the importance of web analytics to the enterprise, making projections about how the vendors’ products would have to evolve for our daydreams to come true. We forgot that just because analytics has growing strategic importance to the enterprise doesn’t mean that the products we know today are what will ultimately provide the data and insight needed by the enterprise.
We all forgot to put on our strategic business development hat and so missed the the real factors that drive a deal like this…the need to make more money. Analytics, at least from a market perspective, is not an academic pursuit. It’s a commercial pursuit, and the industry will move in the direction that leads to greater commercial success for the participants. With this deal, Omniture is leaving the “analytics as a standalone product” market behind while they still can. What they have triggered is a new era of processed and enriched data embedded where it is needed, and Omniture (or what was Omniture) is powering that new era.
Similar deals for the other vendors are inevitable. They cannot continue to function independently indefinitely with Google at their heels. The challenge for them will be to figure out what their core value is, and start looking for deals where that core value can be leveraged as an asset embedded in a larger solution.