Adobe vs Figma: Has the Competition Come to an End?

Adobe vs Figma: Has the Competition Come to an End?

Published: October 10, 2022

By now, it’s no secret that Adobe is acquiring Figma. On September 15, Figma co-founder and CEO, Dylan Field, published a blog post about recent developments and the latest agreement with Adobe. The $20 billion acquisition is by far the largest one in Adobe’s history and a crossroads for many designers and creatives.

While the new agreement should prove mutually beneficial, the Figma community has greeted the announcement with distress and concern regarding its beloved tool’s future as part of the Adobe family.

The details of the acquisition reveal little besides both companies’ optimistic outlook on their joint existence, so it’s too early to speculate on any developments.

For now, there is much to say about each company’s contribution to modern UI/UX developments, web design, and all types of creative pursuits.

Adobe and Figma at the Forefront of Creativity

Adobe is one of the longest-standing titans of the design industry, transforming the world through digital experiences. While it is a design-oriented desktop-first company, it evolved over time to encompass digital marketing with Adobe Experience Cloud and moved to the cloud to keep up with rapidly-evolving technology.

We have Adobe to thank for defining electronic documents through PDF and turning Photoshop into the powerhouse that it is today.

Figma, on the other hand, is less of a household name, which is to be expected of a company founded in 2016. However, the startup’s overnight rise to stardom speaks volumes about its simplicity, accessibility, and applicability.

The world’s best web-based, real-time collaboration tool has brought teams and individuals together, professionals and beginners alike, and given them the tools to create and communicate.

Visual collaboration and multiplayer capabilities allowed Figma to make product design what it is today. With its free subscription tier, a sprawling community of designers and creatives, and impressive performance, Figma is the true leader in its field.

Together, Adobe and Figma both stand to benefit from an agreement such as the one Field announced in mid-September.

With Adobe’s expertise and resources, and Figma’s aptitude for innovation and a community-centric approach, the two can redefine the future of creativity on the web, and introduce a new era of product design.

“Adobe’s greatness has been rooted in our ability to create new categories and deliver cutting-edge technologies through organic innovation and inorganic acquisitions,” said Shantanu Narayen, chairman and CEO of Adobe.

“The combination of Adobe and Figma is transformational and will accelerate our vision for collaborative creativity.”

An Inside Look at the Acquisition

So far, very little is known about the agreement, except several transaction details and some information on Figma’s leadership structure following the finalization of the acquisition.

Adobe is buying Figma for $20 billion, half cash and half stocks.

The deal is set to close in 2023, so it is still “subject to the receipt of required regulatory clearances and approvals and the satisfaction of other closing conditions, including the approval of Figma’s stockholders.”

Adobe will also provide about six million additional restricted stock units to Field and other Figma employees. RSUs will vest over a period of four years after the deal is closed.

Given the unusually high price of the acquisition, it’s likely that Adobe will get a loan to cover the cash portion of the cost. The company will probably make it its priority to pay off the debt in the near future, before tackling any other acquisitions.

As far as operations go, once the deal closes, Field will continue leading the Figma team and report to David Wadhwani, president of Adobe’s Digital Media business. Figma employees will report to Field in order to retain a certain level of autonomy.

“Adobe is deeply committed to keeping Figma operating autonomously and I will continue to serve as CEO, reporting to David Wadhwani,” Field said.

“David is someone I’ve known for a few years now and we have a strong relationship of mutual respect; I’m very excited for us to collaborate with him on how to continue growing Figma’s business. The entire Figma team will report to me. We plan to continue to run Figma the way we have always run Figma — continuing to do what we believe is best for our community, our culture and our business.”

Until the deal closes, each company will continue operating separately from one another.

Both Adobe and Figma Stand to Benefit

The mutually beneficial agreement should prove invaluable to both companies as they merge their collective expertise and combine resources.

Adobe will be adding a new asset to its lineup, expanding its product portfolio with Figma’s cutting-edge collaboration tool with support for real-time interactions, entirely web-based.

For Adobe, Figma’s platform could prove to be the perfect venue for accelerating the delivery of Adobe Creative Cloud tools, expanding its reach exponentially.

It could also become Adobe’s main collaboration tool, depending on what the company decides to do about Adobe XD, its current collaborative offering.

Figma could potentially use Adobe’s resources and expertise to skyrocket its growth and build faster. It’s also an opportunity for Figma to expand into new areas and develop its current product lineup.

“There is a huge opportunity for us to accelerate the growth and innovation of the Figma platform with access to Adobe’s technology, expertise and resources in the creative space.”

“For example, we will have the opportunity to incorporate their expertise in imaging, photography, illustration, video, 3D and font technology to the Figma platform. Additionally, we will have the opportunity to reimagine what the best creative tools could look like within the Figma technology stack,” Field explained.

Adobe could also supplant Figma’s current community plug-in model with native support for a variety of tools and add-ons. It’s not certain whether something like this will happen at all, but it would streamline the pair’s product offerings.

Both companies seem optimistic about what the other one brings to the table, and see numerous opportunities for development. But what about the community?

Figma Rises, Adobe XD Sets

It didn’t take long for Figma to claim the collaborative tool throne.

Whereas Adobe XD was slowly drifting away from its community, Figma was building a loyal user base that is cooperative and dedicated to education.

Adobe used to let users vote on improvements they’d like to see in UserVoice forums, but abandoned such interactions altogether, leaving a community that felt alienated and unheard.

In the meantime, Figma was flourishing with tutorials, templates, and a thriving community willing to lend a hand.

There were also astounding differences in performance between the two. Creative Cloud always runs in the background, causing unnecessary bloat. On the other hand, Figma is incredibly fast and simple to use.

The pricing structure is also one of the major concerns for Figma users. Whereas both platforms have free tiers, there’s a huge difference in what you get out of them.

Sheila Mahoutchian, Forrester senior analyst, claims that Adobe was simply “late to the game.”

“Figma's best-in-class collaboration workflow platform has changed the landscape for design tools, moving the world of design from individual contributors to collaboration-based team enablement,” Mahoutchian said. “We're looking forward to learning more on how Adobe will integrate these trends and learnings into its expansive suite of design tools.”

The community, at large, has accepted Figma as a collaborative standard, prompting an outcry following the announcement of the acquisition.

Acquisition of Figma Raises Concerns

The community’s negative reception of the news stems from the idea that Adobe will cut Figma, implement it poorly, or include it in the Creative Cloud package.

Worse yet, there are claims that the acquisition of Figma is a case of market elimination, and that Adobe plans to get rid of it so as to propel Adobe XD to success.

“From a business perspective, Adobe has, once again, eliminated a major competitor,” said Darren Hood, experience design manager at Arity. “There are reports they will allow Figma to operate independently, but even the most novice of businesspeople knows that wouldn't be smart or savvy.”

However, there are plenty of reasons to doubt such claims.

For one, Adobe has a long history of acquisitions. They are part of its identity, and a never-ending effort to deliver only the best and most comprehensive tools to design professionals.

For the very same reasons, Adobe likely won’t hinder the unparalleled growth of Figma. And if Substance 3D is anything to go by, Figma could also evade Creative Cloud inclusion.

While there have been misguided decisions in the past, Figma is certainly not going to be one of them.

It is too valuable and potent for Adobe to cast aside so that they may continue developing the struggling Adobe XD, not to mention the price the company allocated to get its hands on Figma.

IBM design executive Michael Hammonds explained a possible outcome:

“Back in the early 2000's Adobe acquired Macromedia and slowly took features from Freehand, Fireworks and other products and integrated them into their core offerings. My hypothesis is that this is what they will do with Figma. I would not be surprised though if Figma becomes a core product and XD actually gets sunset.”

Since Adobe XD is practically obsolete, and Figma is the start of the show, neither market elimination claims nor assumptions that Adobe will ruin the new asset have any merit.

It’s too early to say anything with any dose of certainty, but it seems like Adobe has grand plans for Figma. Here’s hoping that’s the case.

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