Adobe's Transformative Digital Turnaround

The road to digitalization is not for the faint of heart. What starts as a digital transformation strategy in the boardroom that promises financial sustainability, in reality means difficult decision making that affects both top and bottom lines. This is what Adobe experienced too.
Similar to Microsoft’s successful licensing software – Microsoft Office – the majority of Adobe’s revenue came from its standalone licensed products such as Adobe Photoshop. The recession in 2008 hit the company in their most profitable division: B2B customers. Companies no longer had the desire or the capital to invest in newer versions of Adobe’s product range. Adobe knew they had to pivot. Cloud-based products were the future but announcing that route came with heavy criticism from investors and customers.
The shift to a subscription-based model suddenly required customers to shell out an annual or monthly fee. Adobe had to double-down on the quality of its service in order to stay on top of the market. And they did. Adobe Creative Cloud was a complete reinvention of the business. Now, customers have a seamless experience of the product, whether they are using mobile or desktop. Content is saved in the cloud and accessible anywhere, and Adobe’s digital transformation to SaaS now allows for collaborations and added services previously deemed impossible. The road to digitization is a test of patience. Adobe suffered declining revenues for three years straight, from 2011 to 2014, until finally in 2015 the recurring subscription model caught on and the company has never looked back since. Revenue in 2008 hit $3.5 billion, in 2020 they had grown to $12.8 billion. A truly successful turnaround that took guts, patience, and a clear focus on the value for its end user.