Businessmodel of Adobe Systems

Customer Segments

Adobe has a segmented market business model, with slight differences between customer segments. The company targets its offerings at individuals, small/medium businesses, and enterprises that wish to use digital media and marketing services for varying purposes.

Value Proposition

Adobe offers three primary value propositions: accessibility, innovation, and brand/status.

The company creates accessibility by offering a wide variety of options. Customers can access its software from any device, including computers, tablets, smartphones, and televisions. Also, beyond its original offerings, it has acquired a number of competitors, which has enabled it to add many new capabilities to its portfolio. For example, purchasing rival Macromedia in 2005 allowed it to add Adobe ColdFusion, Adobe Contribute, Adobe Captivate, Adobe Acrobat Connect, Adobe Director, Adobe Dreamweaver, Adobe Fireworks, Adobe Flash, FlashPaper, Adobe Flex, Adobe FreeHand, Adobe HomeSite, Adobe JRun, Adobe Presenter, and Adobe Authorware to its product line.

The company has embraced innovation from the very beginning. For a long time, its PostScript was the only page description language available for multiple-computer environments, such as corporate office networks. Also, it created Display PostScript, a breakthrough offering because the language could communicate directly with a computer’s screen rather than through a printer. It also enabled users to control graphics on the screen. Adobe’s portfolio also includes groundbreaking products such as the image editor PhotoShop, the drawing program Illustrator, and the viewer Acrobat.

The company has established a strong brand as a result of its success. It is one of the largest software firms in the world, generating $4.8 billion in revenues in 2015, and bills itself as the global leader in digital marketing and media solutions. It processes more than forty trillion data transactions a year through its software-as-a-service products. Lastly, it has won many honors, including placement on the “100 Best Corporate Citizens” list by CR Magazine (2015) and the FTSE4Good Index (2015).

Channels

Adobe’s main channels are its website and direct sales force. It also acquires customers through retailers, distributors, software developers, system integrators, independent software vendors, value-added resellers, and original equipment manufacturers (OEMs). The company promotes its offering through its social media pages, online advertising, attendance of trade shows and conferences, and event sponsorships.

Customer Relationships

Adobe’s customer relationship is primarily of a personal assistance nature. It assists customers in the following ways:

Consulting Services – The company maintains a professional services team that designs and implements solutions for clients. It also utilizes partners such as system integrators, resellers, digital agencies, and solution partners to provide advisory services.

Customer Success Account Management – The company provides Customer Success Managers for its largest customers. The managers work with them individually to address unique needs.

Technical Support – The company offers enterprise support and maintenance services to subscription product and perpetual license customers. Specific offerings include technical support and product upgrades and enhancements. It also offers short term options such as fee-based incident support.

Training Services – The company offers a comprehensive selection of training services, including classroom and virtual course programs delivered by its training professionals and partners.

Despite this orientation, there is also a self-service component. Adobe’s website includes self-service learning options, tutorials, and answers to frequently asked questions. There is also a community element in the form of a forum where customers can interact with fellow users.

Key Activities

Adobe’s business model entails designing and developing its software products for customers.

Key Partners

Adobe maintains the Adobe Partner Connection Program, which includes the following sub-programs:

Reseller Program – Includes members who distribute and sell Adobe’s digital media products and solutions.

Training Provider Program - Includes members who provide commercial instructor-led training on Adobe products.

Technology Partner Program - Includes members whose products and services extend, enhance, and support Adobe solutions.

Adobe Solution Partner Program - Includes members who deliver end-to-end digital marketing solutions and services that drive successful online initiatives.

Program benefits include training and sales/marketing resources, discounts on Adobe Press publications, opportunities to evaluate prerelease software, listing in the Adobe Partner Finder directory, and access to the Adobe Partner Connection Portal.

Key Resources

Adobe’s main resources are its human resources. These include engineering employees who design and develop its software products, sales/marketing staff who promote them, training/consulting staff who provide instructional/advisory services, and customer service staff who offer support.

Cost Structure

Adobe has a value-driven structure, aiming to provide a premium proposition through significant personal service and frequent product enhancements. Its biggest cost driver is sales/marketing, a fixed cost. Other major drivers are in the areas of research/development and administration, also fixed costs, and cost of revenues, a variable expense.

Revenue Streams

Adobe has three revenue streams: product revenues, subscription revenues, and services/support revenues (from training, consulting, and technical support fees).