Adobe Buys Day Software to Bolster ECM Portfolio

Adobe Buys Day Software to Bolster ECM Portfolio

Adobe Systems this week announced it will pay $240 million to acquire Day Software Holding, a Swiss maker of Web-based enterprise content management (ECM) software applications.

Along with giving Adobe (NASDAQ: ADBE) customers more options for managing all the digital content floating around their networks, the purchase will give the San Jose, Calif.-based publishing and document management software leader another established installed base of customers to push its ubiquitous Flash, Flex, PDF and LifeCycle applications.

[login]Day Software’s flagship CQ5 suite provides Web content management, digital asset management and social collaboration tools to help enterprise customers create, manage, organize and distribute digital content online and throughout their organizations.

“Adobe’s acquisition of Day represents a key milestone in our efforts toward delivering best-in-class customer experience management solutions to enterprises and governments worldwide,” Rob Tarkoff, general manager of Adobe’s Digital Enterprise Solutions group, said in a statement. “With the addition of Day to our enterprise portfolio, we will be able to enhance the value of our offering and deliver on our vision of the Web as the hub of customer interaction.”

IBM (NYSE: IBM), Oracle (NASDAQ: ORCL), Microsoft (NASDAQ: MSFT) and EMC (NYSE: EMC) are all slugging it out for the lion’s share of a worldwide ECM market that Gartner predicts will grow at almost 10 percent a year for the next three years.

Gartner says that while on-demand offerings only represented about 4 percent of total ECM sales last year, the SaaS model will become an increasingly larger part of the overall revenue mix starting in 2010. The IT researcher predicts worldwide ECM software sales will eclipse $5 billion by 2013, up from the $3.3 billion in sales reported in 2008.

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In June, Oracle released an update for its Enterprise Content Management Suite 11g, an applications suite that company officials touted as “a universal repository” that brings content and content management tools “to where people work.”

Adobe officials said the acquisition is expected to close in the fourth quarter and will have no material impact on the company’s earnings for the 2010 fiscal year. However, it is expected to be accretive to the company’s earnings in 2011, though Adobe wouldn’t quantify exactly how much more income it expects the Day Software unit to contribute to its fiscal 2011 results.

Day Software will be folded into Adobe’s Digital Enterprise Solutions unit. Day CEO Erik Hansen is expected to join Adobe and will report directly to Tarkoff once the deal is completed.

Adobe Systems shares trimmed $0.39 a share, or 1 percent, to $28.83 in Wednesday afternoon trading.

TAGS: Adobe, ECM, software, Web content, acquisition


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