Adobe: Success Story of the Digital King is Worth Looking at

Adobe has made many savvy business decisions to stay competitive and successful. The software company is best known for products like PostScript and Photoshop that paved the way for modern visual design, while acquisitions of companies like Omniture and Macromedia cemented their hold on the market.

One of their most impressive moves was transitioning from a licensed software company to a completely cloud-based company. This was an incredibly expensive and arduous process and is almost impossible for a company to get right- but Adobe did it, carving out a permanent place in the changing industry. And that's only the latest example of how Adobe has continually made difficult and forward-thinking decisions to help the company thrive.

Just like Microsoft or SAP, Adobe has made a lot of tough product decisions over the past 35 years, shifted and reconfigured the business, and maintained a loyal core audience. These decisions have paid off- Adobe closed 2017 with over US$7 billion in annual revenue and currently has a market cap of over US$95 billion.

To achieve this level of success, Adobe had to make a few smart product, market, and financial decisions. We'll take a look at how they did:

• Helped create the desktop publishing revolution with some of their first successful software products for designers
• Made a series of smart acquisitions to broaden their market and move more into the consumer space
• Fully transitioned from a licensed software company to a cloud SaaS company

Adobe is one of the largest software companies in the world. The firm's flagship offering in its digital media business is Adobe Creative Cloud, which allows customers to download the latest version of Adobe Creative Suite products. The firm also continues to focus on digital marketing solutions. It was founded in 1982 and is based in San Jose, California.

Roughly 90% of Adobe's revenue comes from recurring sources. Recurring revenue streams provide ample visibility as it concerns Adobe's future financial performance and results in stronger cash flow profiles. Adobe continues to gain traction with respect to Creative Cloud subscriptions, and we love this recurring, subscription-based model. Adobe Marketing Cloud is becoming a favorite of Chief Marketing Officers, as digital marketing bookings continue to expand at a nice clip. The firm expects years of growth ahead of it.

The software industry to which Adobe belongs was last valued at US$389.86 billion in 2020, the compound annual growth rate (CAGR) of which is estimated at 11.3% from 2021-2028. The overwhelming growth of the software and the services and their innovations is expected to continue since more or less every other industry is riding the digital waves. 

Adobe offers three primary value propositions: accessibility, innovation, and brand/status. The company creates accessibility by providing a wide variety of options. Customers can access its software from any device, including computers, tablets, smartphones, and televisions. The company has embraced innovation from the very beginning. For a long time, PostScript was the only page description language available for multiple-computer environments, such as corporate office networks.