alt=Art RaymondLEHI — Even a decade ago, Twitter was first to ignite the news bomb.
Ben Gaines was managing social media for Omniture, the Orem-based web analytics company, at that time and recounted the moment he found out his world was about to change dramatically.
“At the time, I was the social media public representative for Omniture,” Gaines said. “So I was on Twitter all day ... checking in with customers and answering their questions and things and I just saw a search column on TweetDeck for Omniture all of a sudden just exploded with the news: ‘Adobe purchases Omniture for $1.8 billion.’”
The way the news broke in Utah was seismic. At that point, even with high-level, local tech success stories like WordPerfect and Novell a part of the narrative, a fresh-faced Utah County startup had broken into a realm that had been a purview dominated by California’s Silicon Valley.
The deal would also play a pivotal role in helping fuel Utah’s homegrown tech realm into the still-burgeoning juggernaut it has become today.
Gaines, who is now a director of product management for Adobe, said while he and his team were the first among Omniture’s rank-and-file to pick up on the news, a companywide email a few moments later lit the fuse for the rest of the office.
“The rest of the floor just erupted as people got word,” Gaines said. “Most of us were pretty young and new to the tech world. We didn’t know what the thinking was behind the acquisition and I think the first question for all of us was, ‘What does it mean?’”
It was a question widely shared at the time by tech industry watchers as well as investors. What was the logic behind Adobe — a company best known for revolutionizing desktop publishing and innovating a suite of creative tools that would become industry standards — in acquiring a Utah startup that was making its name in the emerging field of web analytics?
Adobe CEO Shantanu Narayen, just a couple years into the top job when the Omniture acquisition went down, had a game plan. And it’s one he shared with his new Utah employees just days after the news of the deal broke when he visited Utah for an in-person, all-staff chat with his new Utah County employees.
“And that was really the first time, I think, that we heard from (Narayen) and his staff and the people that run the company, what their vision was for blending the left brain and the right brain and using data to enhance the customer experience by improving everything from web content to visual content to even, you know, printed material in some cases,” Gaines said. “And at that moment, I think it started to click for all of us that, ‘Oh, this actually makes perfect sense.’”
The epiphany, Gaines said, was one about how the kind of data Omniture was specializing in mining and interpreting could be merged with the tools Adobe had perfected in a way to create a broader experience, and utility, for its customers.
“The world is one of experience and we’re constantly experiencing something,” Gaines said. “And if the people who have a say in those experiences can be informed with data, and can better understand the people who are having those experiences, they can, in turn, produce better experiences.”
In retrospect, the move was a first step in a mission expansion for Adobe that has been nothing short of phenomenal.
A series of acquisitions following the Omniture deal would help fuel Adobe’s move from a software-in-a-box, consumer-focused company to one with a much expanded set of products that it moved to the cloud while segueing to a subscription model and retraining its sights on enterprise clients.
The company is also constructing a new, second facility next to the one it opened in Lehi in 2012, and will add 1,000 new employees on top of the 1,300 or so it currently employs in Utah.
One need look no further for proof of Narayen’s prescience than the meteoric rise of Adobe’s market value since the Omniture acquisition.
On Sept. 18, 2009, just a few days after the deal was announced, Adobe’s stock was trading at $32.95 per share. At the end of trading on Monday, Adobe stock was valued at about $278 per share, for a market capitalization of $134.9 billion, or about an 840 percent increase since creating a presence in Utah.
Clint Betts, executive director of Silicon Slopes/Utah Tech Council, said Adobe’s acquisition of Omniture and its decision to maintain the operation in Utah afterwards was nothing less than a “seminal” moment for Utah tech.
“Josh (James) and John (Pestana, Omniture co-founders) proved you can get a Silicon Valley exit without building a company in Silicon Valley,” Betts said. “It was a seminal moment for a variety of reasons and unquestionably sparked what we’re seeing now in the area.”
Betts said Adobe’s willingness to make a monster investment in a Utah company, and keep it in Utah, reflected back on the crop of Utah startups that, at the time, were working to get their efforts off the ground, not the least of which were companies like Qualtrics and Pluralsight.
The cash earned by Omniture’s principals also, in part at least, flowed into other companies and startups, including James’ subsequent venture, business analytics platform Domo. And Betts noted the deal really showed a whole generation of Utah entrepreneurs that building a top-level company, one that could rival any in its class around the world, was eminently doable.
The data behind what’s happened in Utah since Adobe swallowed Omniture is further testament to a decade past in which both Adobe, and the whole of Utah tech, has done very well, indeed.
A comprehensive study of the state’s tech sector conducted by the University of Utah Kem C. Gardner Policy Institute and released in July shows a Utah tech sector that’s grown by leaps and bounds since the late 2000s and is likely headed for more of the same.
From 2008 to 2018, Utah’s tech employment grew by an average annual rate of 4.9 percent, outpacing the national average by 350 percent and more than doubling the in-state rate for other industries over that time period. The tech industry now directly and indirectly accounts for over 310,000 Utah jobs, or about one in every seven. And over the past decade, the wage growth for Utah tech positions has been among the highest in the country, jumping up over 21 percent between 2008 and 2018.
Levi Pace, senior research economist for Gardner and the lead researcher on Utah’s Tech Economy report, told the Deseret News after the report was released that the growth cycle really began in the aftermath of the housing bubble collapse. That, of course, was right around the time Adobe came to town.
”Coming out of the Great Recession is when we started to really pull away from the rest of the U.S. in terms of growth,” Pace said. “Now, Utah is getting a much larger share of out-of-state investment dollars, and even with wage increases, the state is very attractive as a location to expand or relocate.”
Pace also noted that there’s no reason to believe that, based on the data he and his team evaluated, Utah’s tech sector explosion will not continue in the near term.
“Utah has shown it is very competitive and that will keep rolling,” Pace said.
Betts also sees a continued growth arc for local innovation efforts and believes another landmark Utah tech deal that involved a very big outside player coming to Utah via a megabuck acquisition will, like Adobe, pay dividends that are both deep and wide.
“I think what Qualtrics just did with SAP could have as big, or bigger impact on the state as the Omniture-Adobe deal,” Betts said. “SAP’s and Ryan Smith’s commitment to Utah is pivotal.”
That acquisition, announced late last year, saw European software giant SAP purchasing Utah-born customer experience giant Qualtrics for $8 billion. Like Adobe before it, SAP is keeping Qualtrics’ Utah DNA in place, as well as its leadership team. Just last month, Qualtrics announced its name will appear on a new, 38-story office tower in downtown Seattle. The Qualtrics Tower will serve as co-headquarters with the company’s Provo office and help house a workforce that is expected to double in the next four years.
Betts said the state’s portfolio of current, up-and-coming tech interests is bigger than it has ever been and he sees both the volume of new startups, and the realms into which they’ll venture, as both on healthy growth paths.
“For sure, business enterprise has been our bread and butter,” Betts said. “And we’re as good at building enterprise tech companies as anywhere in the world. But I see more consumer companies, more product-focused companies in our future and just a much more diverse local playing field.
“I predict we’ll be looking down the road and, like the Adobe deal, see this time as a benchmark for the Utah tech community.”
