In a world where T-Mobile acquires Sprint, Disney acquires 21st Century Entertainment, and Activision acquires Blizzard, it seemed like Adobe had a chance to acquire Figma. Adobe, known for its popular suite of software in the creative and design industry, announced in September 2022 that they had agreed to acquire Figma, a collaborative design web application that has become the top pick among users across the globe.
The two companies have been working with regulators for over a year to turn this opportunity into a reality. But it hasn’t all been smooth sailing. That’s why many people were surprised when yesterday marked the termination of Adobe’s $20 billion acquisition of Figma. This comes over a year after the Figma community lamented the potential acquisition as the death of collaborative design.
What happened, and what does this mean for their users? For many, it’s a sigh of relief.
For many professionals, Adobe was their introduction to creative software. Adobe set industry standards with its Creative Cloud suite, including well-known products like Illustrator, Photoshop, Premiere Pro, InDesign, and many more.
However, users faced a common hurdle with Adobe products: the lack of synchronous editing capabilities. Only one person could edit an Illustrator or Photoshop file at once. Collaborators often copied and emailed files back and forth, leading to version control challenges.
When Figma released in 2016, their web-based application solved these collaboration challenges by enabling designers to synchronously work on the same file while saving their progress to the cloud. Figma’s innovation allowed teams to speed up asset creation and rely on a single source of truth for their files.
So when Adobe and Figma surprised the world with their announced merger, users around the world wondered about the implications it would have for the industry, because both are major players in the space.
For many users, the news of the failed acquisition brings relief. It was clear a year ago that the Figma community had their complaints about an acquisition. Commenters flocked to Reddit to air their concerns. These were a few of the common complaints.
Figma offers a free option and is permanently free for students and educators, while Adobe offers brief trials before requiring users to pay a monthly fee. For their more popular programs, like Photoshop and Illustrator, that fee is $22.99 monthly, a bit steeper than Figma’s $12 monthly fee per editor, which includes unlimited Figma files. Currently, Adobe’s UX/UI software, XD, can only be purchased with a Creative Cloud subscription, which is priced at $59.99 monthly.
Needless to say, Figma’s more affordable pricing plan and superior collaborative features made it a strong competitor. However, the design community started to wonder whether the acquisition would lead to Adobe raising the price for Figma in the future.
Adobe’s suite of products suffers complaints for issues like crashing, requiring constant updates, and lacking an autosave feature, frequently resulting in hours of lost work. Figma fans were worried that the acquisition would lead Figma to the same fate once it gets absorbed into Adobe Creative Cloud.
Another complaint about Adobe is that its monopoly on the creative market eventually ceases innovation in its acquired products. Once a product is consumed by the parent, it tends to become bloated with features, leading to slow performance and frequent crashes. A smaller competitor, like Figma, entering the market would focus on providing the most value to its users.
Designers speculated that Figma would eventually cease to exist, as Adobe would likely absorb its features into its own UX/UI software program, XD. Adobe stopped investment in XD in light of the merger and put it into maintenance mode.
Users speculated that Figma would fill the gaps that XD wasn’t able to bring to the market. The tool that everyone had learned to love would become just another Adobe product, waiting to be disrupted by the next innovative competitor.
Adobe and Figma are going their separate ways, independently, after a year of scrutiny with the DOJ, European Commission, and UK Competition and Markets Authority (CMA). Regulators were concerned that by acquiring Figma, Adobe would harm innovation in the UK product design software industry; it might reduce competition if Figma weren’t to continue operating on its own.
A similar event occurred in 2022 when Meta was forced by the UK CMA to sell off their recent acquisition of Giphy. The reasoning behind the order was competition concerns in the UK social media and display advertising markets, in which Meta controlled about half of the latter. The decision ended with Meta taking a more than $260 million loss by divesting Giphy to its eventual buyer, Shutterstock.
Ultimately, Adobe couldn’t agree to the CMA’s remedies to their regulatory concerns. After an anti-trust probe, the CMA suggested Adobe sell Figma Design, the core offering from Figma, as it had “overlapping operations” with Adobe’s XD application. However, the offering is likely what Adobe was aiming to acquire in the first place, making the move pointless.
It wasn’t long after that suggestion, and the findings altogether, that Figma and Adobe announced they would remain independent.
Based on the initial negative reactions to the announced acquisition, users won’t be missing out on a future where Figma and Adobe are one company. The Figma community seems to be hopeful that Figma will continue to bring innovation to the product design tooling space.
However, Figma was optimistic about their future working with Adobe. For starters, Adobe has garnered a vast subscriber base for its suite of tools. By joining forces, Figma would’ve had access to a larger pool of users and be able to leverage Adobe’s existing offerings to provide an enhanced workflow for users.
For example, Adobe’s generative AI engine, Firefly, could’ve quickly enhanced visuals within Figma. Or a Figma prototype could easily transfer to an After Effects file to use in an animation. And imagine having over 300 million Adobe Fonts and Stock images at your fingertips within Figma.
Let’s not forget Figma’s latest creation, FigJam, a collaborative whiteboarding tool that provides designers with a digital space to brainstorm ideas. Adobe has yet to enter the space of creative collaboration, and it seemed that FigJam could have played a significant role in shaping the future of productivity and working together when combined with Adobe’s massive user base.
Both companies have strengths they could leverage with each other, but now the Adobe-Figma future will only live on in our imaginations.
It’s not all over — at least, not yet. The CMA and Adobe have a hearing scheduled on December 21st, which is also the deadline for Adobe to offer remediations. However, it seems highly unlikely that this deal will turn itself around given that Adobe is against the CMA’s remedies, and given their public declaration to the contrary.
But there is still hope for the future. Figma continues to make advancements in its offerings, introducing new features in the past year like Dev Mode, variables, and AI features in FigJam. There’s no doubt: the team works toward its founding vision to “eliminate the gap between imagination and reality.” Whether they ended up merging with Adobe or not, Figma has a great track record of giving their users the tools they need to succeed.
As for the direction Adobe is headed, the future is still uncertain. Would they continue searching the market for a smaller competitor to Figma to potentially acquire? That might ease regulators’ concerns by leaving Figma alone. Or would they bring XD back to life and try to steal market share with their own UX/UI tool?
Regardless of what ends up happening, users shouldn’t put too much weight into their tooling. After all, what matters the most are your abilities to solve problems, analyze data, communicate with stakeholders, and design great experiences.
The tools that you use to create are just tools. They will continue to evolve and be replaced by new, innovative ones, but your skills and expertise are what make you a professional.
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