Adobe’s acquisition of Marketo makes strategic and financial sense, according to Gartner research director Chris Ross.

In a commentary on the deal provided to Which-50 today, the Gartner analysts said both companies stand to benefit from the acquisition because of their complementary nature. And he said the hefty price tag could be justified if growth continues.

“Strategically, the collective value propositions and unique audience focus of each firm fits nicely,” Ross said.

“Both Adobe and Marketo have a sizeable installed client base that given the complementary offerings could be rich ore for selling the new combined suite of services. Adobe and Marketo both have large and active partner ecosystems who will be hungry for the additional professional services opportunities the forthcoming integration work will require.”

This morning it was revealed that Adobe would acquire rival martech firm Marketo for $US4.75 billion. In 2016 Vista Equity Partners bought Marketo for the now bargain price of $1.79 billion.

According to Ross, there is still potential for both companies to grow their client base following the sale as the combined offerings open up new segments and markets. Ross expects the acquisition will allow Adobe to expand its focus from enterprise level down to more mid-market customers, impacting the martech landscape.

“Adobe coming down market could create new competitive dynamics across the martech continuum,” Ross said.

Gartner Research Director Chris Ross.
Source: Gartner.com

The Gartner analyst also forecasted significant changes for Adobe and Marketo customers, however, those changes will take time.

“In the very near term, this will likely not mean a lot to existing customers as Adobe and Marketo will likely continue to focus on effectively serving current clients. Longer term this could have a significant impact on clients as product roadmaps take shape, new pricing evolves and the organisations begin to blend.”

And while existing customers shouldn’t expect significant changes in the near term, Ross expects the two companies will begin integrating their technology very quickly, identifying the integration of Adobe’s AI technology – Sensei – into the Marketo platform specifically.

Best of both worlds

According to Ross, the move allows both firms to leverage each others existing footprint and expand into new markets.

“B2B clients, has been seen by many as being very B2C focused. Marketo, in contrast, is heavily B2B focused,” Ross said.

“Given the transition from B2B to B2B2C many brands are experiencing and the entrée each company provides the other to new audiences each entity seems well positioned to benefit from the acquisition.

“Again, strategically this deal makes sense, whether it’s good or bad for either depends ultimately on how it’s managed.”

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