It honestly perplexes me why any regulator would spend more than five minutes determining that this one’s a non-issue, but then again none of the regulators have ever designed or launched a software product, have they?Īdobe’s been building and improving Photoshop for something like 30 years. That’s exactly what Adobe is doing with Figma.īad argument 2: Figma would compete with Adobe if given the chanceĪ second objection-one that also doesn’t make sense-is that Figma might create a “Photoshop killer” or some other product that competes head-to-head with Adobe’s flagship wares. M&A 101 says that if you still want to be in that market and you can’t build it, you buy it. But your product never catches on, you miss the market and other competitors blow past you to the point that it’s impossible for you to catch up. To review, let’s say you identify an attractive product category adjacent to what you already offer, so you try to build something organically in that category. ![]() Meanwhile, Adobe’s product-development plate is very full with its down-market Adobe Express initiative and its Firefly generative AI tool. By the way, those contracts account for less than $20 million of Adobe’s $13 billion annual revenue-not even enough to be a rounding error. Adobe ultimately reassigned more than 90% of the people working on XD fewer than 20 work on the app now, and their job is just to keep it running smoothly to fulfill existing contracts. At one point, XD had 200 people working on it, but the product lacked the real-time collaborative element that drives Figma’s success, and sales never took off. In fact, Adobe leaders think it would be a bad idea to require anyone to buy a Creative Cloud bundle just to get Figma, because they believe that not many people would buy it that way, simply because most Figma users aren’t Creative Cloud users and vice versa.Īs for making a competing offering, Adobe tried for five years to get into product design software with the Adobe XD app, but the company’s own execs are remarkably candid about how that attempt failed. If you pay good money for a golden goose, you don’t throttle the goose.īeyond that, Adobe has publicly committed to leaving Figma freestanding, just like Ashley Still said above. Adobe is putting up $20 billion for a company with a product that inspires zealous loyalty from a user base that’s growing like kudzu. ![]() The idea that Adobe would kill Figma or strip it for parts is ridiculous. But neither version of this makes any sense. One objection to the deal has been that Adobe could build its own product that competes with Figma-or, in a more breathless version, that Adobe will buy Figma so it can kill off the upstart. Figma has been around for 10 years and Adobe for more than 40, so there’s no need to guess whether they compete in their well-defined markets. The market reality I’ve just explained gives the lie to the idea that Figma is a “nascent competitor” for Adobe-a major area of focus in antitrust law today. It’s important to note that the Figma and Adobe contributions came from different members of my team, and that these experienced pros chose the most appropriate tools without input from me.īad argument 1: Adobe competes with Figma and is buying it to quash competition All of the page designs came to me in Figma, while individual assets like header images, diagrams and videos were created on Adobe apps. The division of labor between these tools was recently brought home to me when I was reviewing plans for a revamp to the Moor Insights & Strategy website. Just try making a wireframe for a webpage in Photoshop you can kind of force it to work, but the results likely won’t be good, and the whole thing would be vastly easier in Figma. Sure, a collaboration space within Figma might include some digital assets made using Adobe tools, but the use cases for the apps are far from interchangeable. Meanwhile, product designers and the stakeholders who work with them-people like marketers and web developers-use Figma to create or give feedback on digital products like web-based or mobile apps. ![]() Graphic designers, multimedia editors, digital artists and the like use Creative Cloud to create pictures, videos, brochures and other digital assets. In fact, the apps that Adobe sells to creative professionals and Figma’s main offering for product designers are in some ways complementary, but for the most part they’re used by different roles. The lazy way would be to say that Adobe and Figma both make “design software” and pretend that they operate in the same market space. If we’re going to properly understand the likely impacts of this acquisition on innovation, competition and so on, it’s vital that we do a good job of market definition. Adobe and Figma are in complementary, not competing, businesses
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