Adobe, Figma Deal Signals New Era in Collaboration, Productivity

Adobe’s acquisition of a cloud-based collaboration and productivity platform for about $20 billion reflects the accelerated demand for technology tools that allow people to work together even if they don’t share physical office space.

The purchase of Figma, whose tools are used by designers and developers, is Adobe’s largest-ever acquisition and extends its reach into new areas.

Tools such as Figma’s interactive virtual whiteboards and its design and prototyping offering are especially vital in areas such as software development, which tend to rely on highly collaborative processes. The pandemic accelerated the adoption of such collaboration and productivity software, and the prevalent hybrid work environment among companies is leading to a new generation of these tools and software.

The rising popularity of social networks helped fuel interest in an earlier wave of collaboration technology companies, including Jive Software and workplace chat company Yammer, later acquired by Microsoft Corp. in 2012 for $1.2 billion. Facebook would later borrow from its own formula for Workplace, its enterprise social-networking tool.

In the years leading up to the pandemic, Slack Technologies and its messaging offerings defined enterprise collaboration, helping fuel Microsoft’s decision to launch a competitor, Teams in 2016. Slack was acquired by Salesforce.com Inc. last year for nearly $28 billion.

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Large tech companies, including Alphabet Inc.’s Google, Cisco Systems Inc. and Microsoft offer their own suite of products with new twists on collaboration and productivity.

Startups that employ concepts of collaboration, including digital work-space company Notion, document company Coda and app platform Airtable, took off among software, design and product teams. Their adoption expanded during the pandemic shutdown when companies switched to remote work.

“There were great examples of new forms of collaboration 10 years ago, such as Google Docs…It has taken a while for that to become more broadly applicative,” said David Wadhwani, president of digital media at Adobe. He will oversee 10-year-old Figma and its CEO and co-founder, 30-year-old Dylan Field.

Corporate executives say they expect collaborative software to continue growing in scope and ability, become more visual, and strive to fulfill the level of collaboration that occurs in physical office spaces. As companies grapple with return to office or hybrid policies, “Demand is very high across the board for helping on this problem,” said Jim Szafranski, chief executive of presentation software provider Prezi. In some ways, the focus has shifted from getting actual work done at the beginning of the pandemic to building culture and collaborative relationships in remote and hybrid environments, he said.

Mr. Szafranski said collaborative tools are becoming more visual, rather than simply being text-based, and are more focused on ensuring group participation so employees don’t get left behind in remote settings.

While tools like videoconferencing and chat apps play an important role helping teams communicate, what is on the market now still doesn’t provide the same level of collaboration as a physical workplace, said Paul von Autenried, former chief information officer of Bristol-Myers Squibb Co. and currently an adviser on technology issues to executives and boards.

The calls for workers to return to office are a sign that there is room for collaboration tools to get better, Mr. von Autenried said, especially in the areas of less structured, more spontaneous interactions.

Figma itself drew inspiration from Google Docs, basing itself in the cloud so people could work in one digital space together instead of creating different versions of the same project, Mr. Field said. Figma was different from other tools because it made it easy for people in a range of technical and nontechnical roles to collaborate in the design process on one platform.

Mr. Wadhwani said Figma’s next generation of collaboration and productivity tools also take inspiration from the world of gaming, in which many people are remotely participating in a task in real-time. “It is a multiplayer-game-like capability,” he said.

Adobe’s acquisition of Figma is a turning point, said Jake Saper, a general partner at Emergence Capital. The venture-capital firm, known for investing in Salesforce.com Inc. and Zoom Video Communications Inc., passed on a chance to invest in Figma during its B round.

“It is the old buying the new,” Mr. Saper said. “The old way of building productivity tools was the way Adobe started, [and it was] only intended for use by a narrow set of people.”

Figma isn’t just built for designers, but for a range of people involved in design, and that necessitates software that is easier to use and share, he said. To that end, Figma was built not as an app but as a web-based application because it is easier to share, Mr. Field said. He said his company has an app, but that it is a shell for web-based software.

“We thought the browser was not recognized for its power,” Mr. Field said. That web-based approach, which cuts the need to download software, made it easier for Figma to take off among a broader group of users, he said.

The fact that Adobe was willing to pay so much for Figma reflects that belief that its software was fundamentally different, according to Mr. Saper. He said there was no question that Adobe was buying a smaller but quickly growing rival, “but if Figma was just another piece of software with a lot of growth, Adobe would not have paid so much for it,” Mr. Saper said.

—Thomas Loftus contributed to this article.

Write to Steven Rosenbush at steven.rosenbush@wsj.com and Isabelle Bousquette at Isabelle.Bousquette@wsj.com

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