Good afternoon, and welcome to Adobe's 2018 Financial Analyst Meeting. I'd like to extend that welcome to those watching on the live webcast. And once again, welcome to MAX, where you've joined over 14,000 of the creatives in the world. For those I haven't met, I'm Mike Savage. I Head of Investor Relations here at Adobe.
It's a job that I've probably served for 19.5 years. But in Investor Relations, we don't count years, we count earnings calls, and it's been 78 straight earnings calls.
Thank you.
And more than 20 analyst meetings, we actually used to do this twice a year at one point. And over the past 2 decades, we've had some really important analyst meetings. If I think back certainly 2,005 after the Macromedia acquisition, that was an important time when we talked about the growth with Creative Suite. 2011 in New York City, where we unveiled our move to subscriptions, the move to the cloud, and we doubled down on a space that we're just starting out in creating digital marketing. And I feel like today is another one of those really important meetings.
And I say that because of our calls, of our meetings with all of you. In the last year, we certainly have been acknowledged as a leader. We've driven strong top line and bottom line growth. But questions come back to us as, can we keep it going? What will continue to fuel growth?
There's more competition. And so I think today it's important in that we address a lot of those questions that many of you had. We know that valuation is important when we think about a stock, but looking back isn't the way for that, it's really looking forward. And so today, we're going to really walk you through a number of growth drivers across all of our businesses and really set that story up as we look forward. To accomplish this, we have an agenda and we have more speakers than normal.
In addition to some of the people that you're familiar in seeing, we're going to introduce you to a couple of new people that have been presented at one of our analyst meetings before. Shatnu, in a few minutes, will kick things off and he'll articulate Adobe's vision and strategy and set up the context for the day. Following Chatnew, we're going to have Gloria Chen present. Gloria is Head of Strategy at Adobe, and she's one of the people that's been at Adobe as long as I have. And she's going to spend some time talking about the market landscape and how we look at it, how we look at our opportunities and how we make some of the strategic moves that we've made to set us up for future growth.
After Gloria, we'll have our business unit leaders present. Brian and Brad will walk you through a lot of the momentum, the opportunities, the strategy we have across Creative Cloud, Document Cloud and Experience Cloud. We'll also have Scott Belsky present, and he'll recap some of the news of the day but also talk about where we're headed from a product direction with Creative Cloud. After that, we'll have Avi, our Chief Technology Officer, present, and he'll review some of the key focus areas that his team has around investments we're making in our cloud platform and how we're investing in AI with Adobe Sensei and how that differentiates Adobe from any other vendor in the market. Finally, our new CFO, John Murphy, will lead a discussion on our financials.
He'll go into topics around scaling our organization. He'll cover some key topics I know all of you are interested in like RevRec 606 implementation, tax reform and other things. And he'll close with talking about our growth targets for next year. We'll close with a Q and A session. Of course, we ask that you keep all questions until then.
And we'll have a short break after the digital media presentation, and then we'll come back and finish the day after that. In addition to our speakers today, we have members of our management team here in the room as well as some of our business unit leaders. We also have members of our Board of Directors. Slides from today's presentation have been posted online, so you have not downloaded them yet. You can do so and watch see those on your PC or screen in front of you.
We've also posted a copy of today's press release, which crossed the wire about 1 hour ago. Today's meeting is being webcast, and an archive of the meeting will be available later today and will be available for a limited time. Today's webcast video and archive is the property of Adobe, and it cannot be reproduced or distributed without our permission. Finally, before we get started, our financial disclaimer. Some of the information we discuss today, particularly our revenue targets, contains forward looking statements that involve risk and uncertainty.
Our results could differ materially from those statements, and we ask that you review our SEC filings as well as a copy of the forward looking statements disclosure in the press release today for a complete understanding of those risks and uncertainties. With that, we thank you again for joining us, and let's kick things off with bringing to the stage our President and CEO, Shantanu Naray.
Thanks, Mike. And I'd like to also welcome everybody who is joining us via the webcast. But particularly warm welcome to those of here today with us in the room today. And if you were at the keynote earlier this morning and you saw just the incredible amount of innovation that we're delivering and I've always maintained that our core Adobe is a product company. And when you think about the kind of innovation we're delivering across multiple surfaces, multiple media types and really pushing the envelope with things like artificial intelligence and machine learning.
It always warms my heart because I believe that the core to great sustainable companies is ensuring that you continue to serve the customers well and you solve hard problems that nobody else is qualified to solving. And so I'm happy to be here and talk not just about the technology that we're investing in, but also the growth strategy that we've outlined for ourselves as a company. And it's always, I think useful to just remember the mission that the company stands for. It's a mission that has served us well for all of our time and existence, changing the world through digital experiences. And if you think about where these experiences are created, where they're consumed, the number of people who are participating in digital as a journey, whether it's the individual freelancer to the enterprise.
I think the scale at which Adobe has an opportunity to participate has never been greater. And so that's really amazing. Clearly, like all Silicon Valley companies, we have to say changing the world about something as part of our mission. But this notion of digital experiences and what we do, I think, is just incredibly relevant. In most companies, when you're in the tech industry and you think about tailwinds that exist, I think you'd be happy with 1 or 2 tailwinds in your industry.
But when we think in your industry. But when we think about the trends that are driving our business, in the creative space, for example, we always talk about the fact that every single individual has a story to tell, except that every single individual has a story to tell, except the devices on which people are telling these stories, the media types that they're using to tell these stories, the modalities that now exist for us to innovate, to take a creative idea or inspiration that exists in somebody's mind and bring it out in digital form, the business models that exist, the ability for us to be flexible in terms of targeting a new audience, I think that has just never been greater. And it used to be that everybody would ask us a few years ago about why we would be as relevant moving forward because a few years ago the importance of design or the importance of creativity was perhaps not as recognized as it is today. But when you look at the number of people who are embracing design as a profession today, when you think about how every single enterprise in the world has to either be a design led business in order to deal effectively with customers, It just feels like we have a tremendous amount of content that's being created and the Creative Cloud platform clearly enables us to be the platform of creativity for all.
So content is something that has always existed when the company, we've created the world's content. But I think what's been different over the last few years is the amount of intelligence that has come into not just the creation of that content, but in tailoring how that content is consumed and how that's monetized. And we clearly think that for every business that exists today, you have to recognize that customers are now buying experiences and not just products. So in addition to the product that you're delivering, wrapping it around in having sure that that's tailored to them, that it's personalized. We really believe in this notion that experience is the currency of all customer satisfaction.
And the interesting thing when we talk to customers, even if you're talking to customers in Financial Services, the bar that's set for them is not just the experience that's being delivered by other enterprises in the Financial Service. It's a bar that's being set for them by an experience that's being created by any other industry and any other enterprise. And so I think that's something that has dramatically changed in the landscape that we are. I think one thing that we find is going to be substantially different at Adobe moving forward is this notion of artificial intelligence and machine learning. And every decade or so you have some tectonic shifts that have happened in software, the move to the cloud and the move to mobile was certainly one of them.
But we believe that if we can harness the power of intelligence and we say that in 2 different ways. In the creative space, we have tens of millions of people using our products every day and 100 of millions, if not billions of assets that are being created with our products. Being able to harness what people are doing, their intent, how to make it more accessible, more enjoyable and more indispensable for customers is a luxury that only Adobe has and we're hard at work using that AI and using that machine learning as you hopefully saw this morning to make our products incredibly easy to use. And the same thing is true on the digital experience side. The fact that we process 100 of trillions of transactions enables us insight into behaviors and demographics and experiences that customers want that allow us to actually make our products better in a loop than nobody else can.
And so I think most companies would be pleased with 1 or 2 of these trends of the businesses. We're just really fortunate in that we have a number of trends, the move towards digital, the move towards content, the move towards data and we're uniquely positioned and capitalized to take advantage of a number of these trends. And certainly, Brad and Brian will again touch in more detail about what's happening in each of those spaces. So when we look at these trends and you think about the mission of the company, our fundamental growth strategy continues to be the same and we represent that by saying we're here to empower people to create and we're here to help transform how businesses compete. And when we talk about empowering people to create again, we look at it and we say it doesn't matter what media type, it doesn't matter which customer constituency, it doesn't matter what device people are creating on, we want to be the company that steps up.
And I think you've seen remarkable evidence of products on the mobile space on products like Spark, products like Rush that we announced today that show that we're not just targeting the creative professional with the quality and breadth of our products, we're actually expanding significantly to a whole new set of customers. And on transforming how businesses compete, the single biggest issue that most companies have today is understanding how digital can either be a tailwind or a headwind as they embark upon the digital transformation that's upon them. And I think we're in a very unique position because when we made the decision to move to the cloud and we took our entire Box based business and moved it, we had remarkable insight into the benefits of that customer direct customer engagement that we would have. And so one of the really virtuous cycles that exist within Adobe is that everything that we're doing on the Creative and Document side with respect to engaging with our customers, we're customer 0 for our entire digital experience. And so I think it's a credibility that we get with every customer that no other enterprise software company has because one of the things we certainly talk about when we talk to CEOs is the fact that everything we're telling them about with the Digital Experience products are products that we use every day.
So we think this is a remarkable opportunity for us. Each one of these opportunities would be large. I think you're going to hear later today about we think we have over 100,000,000,000 dollars addressable market as a result of what we've created in both of these spaces. But it's also both markets in which Adobe is the clear leader and we intend to stay that way. What I thought I'd do is for each of the clouds just give you a little bit of a glimpse of why we're excited about the growth opportunities that exist.
When you think about the new design categories that are being created and at Max today I'll just maybe highlight a couple of them. If you have this fundamental belief that every device whether it's the connected car, whether it's the watch that you wear, whether it's the drive through that you do to order food, whether it's the retail experience that's going to have a screen. It's our intent to ensure that every single piece of content that's delivered for that screen is created through an Adobe application. And so we have brand new design categories that are being created from print to web to mobile to interactivity to augmented reality to virtual reality that we showed today. And Adobe is at the core of every one of those new design categories that are being created.
We demonstrated today how we can actually have voice also be created within Adobe applications and voice is certainly going to be one of those universal ways in which people engage with devices. The move beyond professionals is something that you have asked us for And in the past, it used to be a halo effect because we had one box that we would put in a channel and certainly that was used by creative professionals, but there was a tremendous halo effect. Brian is going to touch on our data driven operating model and how we are incredibly precise about how we acquire customers, what products we serve for them. And one thing that I like to talk about a lot, which is we believe that retention is really the new growth in every single business. And the fact that we are expanding to these non professionals, we know exactly what the targeted offer should be, we know how to personalize it, and it's all completely data driven, I think gives us unique insight and engagement with our customers.
We've also talked a lot about how we want to move beyond the desktop products into both the mobile era. We had a number of mobile announcements that I know, business. Okay. And then, And 2 of them that I'll highlight are both the stock business as well as the sign business. And the insight that we really got on the Creative Cloud was that the majority of the people creating content were using our products and the majority of the people buying content were using our Adobe products.
And the success that we've seen with stock as well as the success that we've seen with Sign as a result of the proliferation of the end user environment that we have continue to make us believe that growth in new services is going to be another way in which we continue to drive the business. And I think underlying all of this and for those of you who've been at Adobe or following Adobe for many years, we've always talked about the Adobe magic, but Sensei, which is our artificial intelligence and machine learning framework, we really believe that targeting specific domains, the domains of creativity, the domain of documents and the domain of what we can do on the digital experience is a way in which we can continue to enhance our lead visavis the competition. So in the Creative Cloud, we continue to think when you think about geographic expansion, when you think about new mobile offerings, when you think about new media types and when you think about how we can upsell all our customers from whatever product they might first experience Adobe through and it might be through a promotion all the way to having a lifetime value understanding of what they will serve with us.
We really feel like there's a lot of opportunity ahead of us. And I think you saw in our targets, our preliminary targets that we announced, we continue to expect to see Digital Media ARR grow very strongly in 2019. On the Document Cloud, I think a number of you have probably been very surprised by the success that we've seen with Acrobat units, But I think it stems from the simple fact that PDF continues to be the lingua franca for how documents are shared not just on desktops where it was clearly the standard, but also on mobile devices. We anticipate that we've had over 500,000,000 copies of the Adobe Reader downloaded for mobile devices. And one of the hard problems that we're really out there trying to solve with PDF is how can you take the billions of PDFs that were created prior to them being created for the mobile era and ensure that the viewing experience on mobile and the ability to automate paper to digital is incredibly good.
That's again the kind of AI and machine learning that Adobe is in the only unique position to be able to do. So making PDF an absolute first class citizen for this mobile era and modernizing PDF as everybody has known him. I hope you've caught the new release and the announcements associated with that. Brian certainly going to touch on that, but we're not resting on our laurels as it relates to what PDF has been. I think the future for PDF is way more exciting as a result of this business imperative that everybody has to automate their paper based inefficient processes.
One of the things that we are particularly excited about also in the Document Cloud is what we've been able to do with our sign business and ensure that that's embedded in other products like SharePoint and Office with Microsoft, so that we get the ubiquity not just within the Adobe reader of our PDF, but also within a much larger ecosystem with the intent again of ensuring that PDF remains one of the key elements of how you do a paper to digital transformation in your business. So tremendously exciting here. I think one of the other opportunities that continues to exist for us here is the massive installed base that existed of perpetual Acrobat and as we are moving that massive installed base to a subscription based model, we're also dramatically like we did in the Creative Cloud through the pricing mechanism, through the accessibility, dramatically improving the number of people who are new to PDF and are new to Adobe as part of that process. And what we talk about a lot with the Experience Cloud is how we continue to think that this is the largest new opportunity available to us in terms of an addressable market.
I constantly say that the 1st generation of Software as a Service, what happened was that everybody found a way to quickly install new software. On premise software was incredibly hard to install. It was incredibly hard to customize. And the 1st generation of software as a service, whether it was Adobe for marketing or whether it was Workday for HR or ServiceNow for IT management, what we were able to do was actually just change the ease of use of deployment. I think the much larger opportunity that exists right now is to ensure that all those silos that exist in an enterprise are unified through a customer profile that enables every one of these enterprises to deliver an engagement with their customer that's unified across every single channel.
And that's one of those hard problems that we've gone ahead and tackled. We have a new data platform that we've delivered, which has been years of technology effort. It's part of the basis of what Brad will talk about with the Open Data initiative and what we are doing with other companies like Microsoft and SAP on the core infrastructure, but also with other companies like Informatica and Unifi and SnapLogic because the hard problem that exists within enterprises today is still to be able to get all of those silos to work together to provide a unified interface. And for anybody who's trying to do machine learning or AI in an enterprise to provide a unified and a consistent view of the customer profile. 2 hard problems that we have done so that enterprises can unlock all of the data assets that exist.
One of the things we always tell our enterprise customers is if you were to take every customer interaction, every behavior that they have with you and put that on your balance sheet, how much do you think that's worth? And I think that's the opportunity that Adobe has. Much like we've done with the Creative and the Document business, how do we provide that insight to enterprises as they increasingly move towards a digital direct engagement with their customers. And like with the Creative Cloud and the Adobe magic that you've come to expect, we're investing in deep technology moats here that will continue to ensure that we're the leader in this category, something that's being recognized by industry analysts, again, as Brad will touch on. So I think in all three businesses, what I think characterizes Adobe differently and distinctly is first, a really good understanding of the customer pain points that exist.
2nd, a belief on customer centricity in terms of how we address these customers to ensure that they get value out of it. And 3rd, a deep investment in technology that will continue to keep us at the forefront of all of these categories. When I actually take a step back and visit with customers, whether it's a K-twelve student or whether it's the largest enterprise in the world, What always makes us really proud of what we do here at Adobe is that the impact that we have. And it's always nice to say if you think about the world without newspapers and magazines and websites and mobile applications and the video that you consume on a web and increasingly with the new retail experiences, the world would be a pretty boring place. And we think that the ability for us to have even more impact moving forward across every area of content is greater than it's ever been before.
And it's something that I think motivates the entire Adobe population to continue to innovate at the pace at which we do. One of the things that I think Adobe has done incredibly well on the desktop was we recognized that not only did we have to deliver best of breed applications, so Photoshop had to be best of breed, Illustrator had to be best of breed, InDesign had to be best of breed, But the value that we could provide as part of that was to make sure that types and fonts and colors and the user experience across our products was second to none. So people had the ability to use our entire suite of applications. We're using exactly that same strategy with the digital experience side where we have to service practitioners, whether you're marketers, whether you're the advertising group, whether you're IT, but integrating those products across all of them is a unique opportunity. We're however thinking about it at an even deeper level.
It's not just about integrating our Experience Cloud products. It's not just about integrating the Creative Cloud. It's actually about providing a technology strategy where a core content and data platform is at the heart of everything that we've done imbued with Adobe Sensei, which again is our AI and machine learning framework. And we recognize that in order to deliver consistent value to our customers, all of our apps and services across the Creative Cloud, Document Cloud and Experience Cloud have to work in tandem so that we can enable people when they're thinking about a content problem to be able to plan, create, manage, deliver, measure and monetize. But I think the other unique thing that we think about when we think about a unified technology strategy is not all innovation is going to happen at Adobe.
And so providing access to developers and data scientists and again I think Abhay will talk a little bit more about this in-depth, we think will be a unique advantage. You saw a number of examples of that this morning with Adobe XD and what we've been able to do with voice so that you can actually create Alexa applications out of XD. But I think this is a core differentiator of what Adobe will continue to do across the entire content and data platform. So, I think in summary, when I take a step back and I think about the incredible success that we've had as a company, the fact that we've been driving top line growth as well as bottom line growth with an impressive margin, it just feels like we are on the cusp of being able to dramatically scale those opportunities across both the empowering people to create opportunity as well as the transforming how businesses compete. There is no question in my mind when we engage with customers, the brand permission that Adobe has to enter into new areas enables us to extend beyond the creative professional to the marketer, beyond the marketer right now to the CIO and actually the entire C level suite.
We continue to focus, as I said, on building deep technology moats, which is something that I think all long term investors should be pleased about, but we continue to see massive growth drivers that everybody will touch on to continue to grow and to continue to create categories in this space. So I'll be back later to take questions. But with that, I'd like to introduce Gloria Chan. Gloria has been at Adobe, as Mike said for over 20 years. She's been instrumental in helping us drive the strategy and I thought it would be really good for her to help frame how she sees the opportunities and our core competencies moving forward.
Gloria?
I remember when Photoshop came in a box all by itself. That was over 20 years ago when I first started at the company. And since that time, Adobe has transformed itself many times over. I've been fortunate to have been on the front lines of seminal moments in that history. From the launch of our first global e commerce site, our early entry into the enterprise and of course our move to the cloud and to significant acquisitions like Macromedia and Omniture and of course most recently Magento and Marketo.
It's been an exciting career, but I have to say it's never been a better time to be at Adobe to drive strategy and growth. Adobe has expanded significantly in the past 20 years and while we've grown through both organic and inorganic means, I'd like to use the lens of 2 important acquisitions to illustrate our transformation journey and that is of Macromedia and Omniture. So with Macromedia, we were the leaders in graphic tools at the time and we were investing in making print publishing workflows work seamlessly across our tools. But we had a broader vision, one for a complete Creative Pro desktop for all tools across all media all working together. And with Macromedia, we were able to plug an important gap which is in web publishing and interactive design and that turned Creative Suite into the leader of cross media publishing, cross print, web and video.
So we were not just talking about the next feature of any given product, but we were looking at a broader vision of workflow for our customers. And of course that story has translated into where we are today with Creative Cloud. Fast forward a few years, more than a few years, but to Omniture. So at that time, we were the leaders in creating, managing and delivering content. That's how we described our strategy at the time.
But businesses were going online and digital content was becoming paramount and digital content screams for measurement. And so with the acquisition of Omniture, we were able to close the loop of creating, managing, delivering and then measuring and optimizing the content to make it perform better. And with that, we were creating the digital marketing category and able to claim leadership in that category. Today, Creative Suite has become Creative Cloud and likewise, Acrobat has become Document Cloud and Digital Marketing has expanded to the Experience Cloud. And our strategy is to take that to the next level, these 3 clouds to become AI driven platforms for creativity, digital documents and customer experience management.
Empowering people to create and transforming how businesses compete, Shantanu touched on these as our strategic pillars. And in my new role, people often ask me, are these 2 pillars enough? And my answer is, it's an emphatic yes. Our 2 strategic pillars are so large that I'm confident in the growth opportunities they represent. A wise man once told me that the lens through which you look at an opportunity really defines how big it is.
And so let me share with you the lens with which I look at these opportunities. So from our leadership position, we look at 3 dimensions of growth. First, we look at the technology drivers that set the context for our strategy. Shantanu actually touched on many of these earlier. We then also look at opportunities to expand in categories, but also in many cases create new categories.
And then of course we look at customer expansion. So for creative for example, in the categories of screen design and AR and 3 d, we're investing in these new categories to ensure that we continue to deliver a complete CreativePro desktop. Of course, today, it's no longer just about the desktop. We're also looking at new customer segments like the YouTubers that we saw on stage this morning with purpose built tools that help to expand our opportunity. With Document Cloud, we're pursuing new mobile users and providing new services like sign in collaboration.
And with Experience Cloud, we're continuing to expand into commerce with Magento, completing that customer journey with our customers and with Marketo strengthening our position and our offering for B2B marketers. We're also going deeper into our relationship with the CIO by tackling one of the biggest challenges they have today, which is around customer data management with our experience platform. So these are huge growth opportunities and you're going to hear a lot more from my colleagues later. But before I go into quantifying these opportunities with the TAM, let me talk a bit about how we think about TAMs. So the reason we developed TAMs is to really help steer our 3 year strategy and our investments to make sure that we're investing where the growth opportunity is ahead of us and not just investing for today.
And so with that in mind, we take a very systematic approach to how we develop our TAMs. We focus on product areas where we have active or categories where we have active product offerings or where we have committed product plans and strategies. And then we take our both third party sources as well as our own internal bottom up assessment of addressable customer demand and triangulate to develop those TAM opportunities. So, our digital media TAM, which includes both Creative Cloud and Document Cloud, have grown from CNY29.5 billion in 2020 to CNY36.7 billion in 2021. In both Creative Cloud and Document Cloud, these growth the growth has been driven by both a combination of organic growth across the core user base and core markets as well as market expansion, for example, as I touched upon previously, new users with purpose built products as well as mobile users.
Likewise, with value expansion opportunities expanding into new categories like stock, sign and collaboration. Brian is going to touch on the specific drivers of the TAM growth in a bit. And for digital experience, our strategy has been a combination of expanding our TAM and strengthening our position in existing TAM. As you can see here, our digital experience TAM has grown from RMB53.2 billion in 2020 to CNY71.2 billion in 2021. And this CNY18 billion increase comes from organic growth across all the segments as well as Marketo, which is represented in the Marketing Cloud number, the Experience Platform, which is represented in Analytics Cloud and of course, Magento Commerce.
So across both Digital Media and Digital Experience, our company TAM has grown from KRW83 1,000,000,000 in 2020 to KRW108 1,000,000,000 in 2021. And when I think about this tremendous growth opportunity, it's absolutely critical that we invest in the capabilities required to execute and fortunately, we have a lot of strengths to leverage. So first, there is our incredible innovation engine. From our labs to our product teams, we are inventing the future. And we serve a broad range of customers and we have the go to market scale to go with that and a thriving ecosystem that helps to amplify our strategy and our growth.
Last but not least, we have an exceptional brand and team. So let me touch on each of these a bit further. We're here at Max and Max is always a mind blowing experience. It's an explosion of innovation, demos, technologies, announcements and it shows us at our absolute best. We've always prided ourselves as Shantanu mentioned as a product and technology company and we aim to solve tough problems, those that are worthy of our engineers' time and energy, those that create deep technology moats.
And while our individual products and solutions get rave reviews, it's always gratifying to see the recognition that we get from publications like Forbes and Fast Company. You're going to hear a lot more about this from Brian, Scott, Brad and Abe, and you will be blown away even further. Next, of course, we have to get our products into our customers' hands. We serve a broad and diverse set of customers, those who spend from $99 a month to those that spend over $10,000,000 a year. And that requires us to have a go to market scale across both B2C and B2B.
Our direct to consumer channel is adobe.com. It's one of the top 100 most traffic websites in the world and it drives a significant portion of the digital media ARR. And just as importantly, it serves as customer 0 for Adobe Experience Cloud. By using Adobe Experience Cloud, we're able to drive that business with a data driven operating model using data to plan, engage and measure across the entire customer journey. And that makes for a fantastic case study for our enterprise sales force to take to our customers.
Our enterprise go to market is world class and we are becoming increasingly mission critical to enterprise brands around the world. And they are looking to us not only for their vision, but for implementation and customer success in their digital transformation. One area that you might not have heard a lot about from us is the mid market. Now what you may not know is that we've actually had a significant mid market go to market for a long time, for decades. We have an extensive reseller channel reaching small and medium businesses around the world with digital media products.
But with the acquisition of Magento and Marketo, we have a new opportunity to expand and bring digital experience solutions to the mid market segment. We have a tremendous go to market machine, but fortunately, we're not doing this alone either. Adobe has many partners who are invested in our shared vision of where we want to go together. For example, we have a community of over 300,000 open source developers supporting the Magento platform. Have technology partners like Microsoft and SAP who are collaborating with us to solve and tackle industry wide problems.
And we have leading system integrators and agencies who are extending our go to market and helping our mutual customers succeed in their solution design and implementations. Our strategy is clearly resonating with them and they are investing in our mutual success. But execution ultimately comes down to people and we have a fabulous brand and a fabulous team. Adobe strives to be a great place to work and a great company to do business with And our efforts are paying off in external recognition. For the past 3 years, we've been one of the top growing brands on the Interbrand's best global brands list, and we've been on the Fortune best companies to work for list for 18 years.
And this is reflected in our ability to attract and retain great people, and that ultimately is the engine of our innovation and our growth. I love change, and I love being part of building something big. And I really believe that we're on the cusp of a new era of growth for Adobe. That's why I'm as energized as ever to be here. We have a $108,000,000,000 growth opportunity, a proven track record of transforming ourselves, a robust strategy and the capabilities to execute and turn that opportunity into growth.
There's never been a better time to be at Adobe and there's never been a better time to be an Adobe investor. Thank you and I will turn this over to Brian.
Thanks, Gloria. I'm both a committed employee and a committed Adobe investor, so I'm paying off on both sides. All right. It's great to be back at MAX with all of you and to share the duties with Scott. And I think I'd like to give Scott a round of applause for him and the team for the job they've demonstrated today.
I've been heading up Digital Media again for the past 4 years. And during this time, we've driven against an expanded set of growth drivers and really established a phenomenal growth trajectory, and we're all really proud of that. Scott and I are going to walk you through both the business momentum and the product strategy that underlies this momentum, and we'll also brief you on our expanded opportunity, which resulted in a substantially larger TAM for Digital Media into 2021. Continuing our mission and sharing some of Shantanu's slides, Adobe is all about empowering people to create. And if you didn't believe that ever, I think you believe that coming out of the meeting today, an awesome set of new products and innovations that really enable storytelling in a much broader level.
The pace of innovation, the passion that we all have and the excitement that the customers have around our technical achievements are at an all time high at this point. As Gloria mentioned, Adobe has an exceptional brand and an exceptional team behind that brand. We're focused on giving every communicator in the world the best tools, both through Creative Cloud and through Document Cloud. Let's touch on just a couple of key customer trends that are really behind and creating the tailwind around this business. The demand for content, we focus on this a lot.
The demand for content continues to explode at an unparalleled rate. And part of this trend is the continuing push from paper to digital, really moving all of our document processes online in a modern digital world. The proliferation of mobile devices, we don't view mobile as a discrete island. We view mobile as part of a multi platform, a multi surface ecosystem that serves customers better and the need for brands and individuals to stand out on social media. These are all some of the core drivers that are behind the huge momentum that we've created in this business.
Talk about our customers. Everybody has a story to tell, from creative professionals, students, knowledge workers, everyone is looking for a way to communicate with higher impact. This week at MAX, we host over 14,000 of these storytellers, customers who've come to share, to learn, to be inspired by each other. And clearly, none of this would be possible without these customers, ranging from freelancers all the way to governments and enterprises. Let's take a quick look at the numbers.
Over the past 5 years, we have continued unprecedented momentum since we switched the model from perpetual to subscription. And in Digital Media, we've put up an additional $1,000,000,000 plus ARR each of the past 5 years. So an incredible amount of momentum that the pace of innovation and the business model change have brought to this business. We've achieved this through a core set of drivers, an expanded set of customers and a high rate of product innovation. And you saw our 2019 targets.
We're not about to relax that pace of innovation nor our aspirations for the targets that we've set. We will continue this momentum and continue this market leadership. I'm going to talk to you a bit about what we've set up a fair amount in the earlier talks by Gloria and Shantanu, and that's this thing we call DDOM, the data driven operating model. When you think about the scale of business that we're managing here, a multibillion dollar recurring revenue business, it's important for us to get pretty organized about how we go about do that. And so we've implemented what we call the data driven operating model to deliver a personalized experience across the entire customer journey.
You see that journey here before you from discover to try and buy to use and renew. As part of the process, we need to consider a number of factors in driving a truly digital experience engine at scale. Different customer personas and customer segments, different sources of customer acquisition from adobe.com to partners and mobile app stores in the channel, different regions and countries that we're serving, really understanding very deeply, given all these factors, the customer intent as they start to engage with us. And then stepping back and looking at the stage of the journey that a customer is at and what are the desired actions both that that customer wants to take, but we want that customer to take to deepen their engagement and to deepen their success with our products. So how do we tailor a personalized journey that solves for all of these various factors?
Let me take a few minutes to walk you through this customer engagement funnel. At the Discover stage, on the left, we first engaged customers through a range of organic and paid media activities across a variety touch points from social to web search engines like Google to YouTube, mobile app stores both on Android and iOS with Itunes and Google Play, and partnerships with, for example, via device OEMs. We have deep insight into our marketing spend, into the attribution by touchpoint and the performance of that marketing mix to drive that engagement so that our CMO, Anne Lunes, and her team can optimize the spin mix in real time. For TRI, we acquire a massive number of customers via free trial. At the same time, we know that customers behave differently at each stage of that journey.
For example, customers in Japan and Germany, when at the trial and the consideration stage, they need more information during the consideration phase. They want to dig deeper into the product. They're trying the product, but they also want to understand more deeply than other markets the technical specifications around that product. So in these countries, we tailor the web experience in a different way to provide more detailed product specifications than we would necessarily in the U. S, for example.
Also, with multi surface app systems, and if you haven't learned that buzzword, you know it after today because this is a lot about what we talked about in the morning. These multi surface app systems like Lightroom, where we have an app on the desktop, an app on mobile, we have a web app that's hosting a web experience. For these systems, we don't just deliver a desktop trial experience that's time delimited, we deliver a trial experience that lets the user test and use the full range of the product across mobile, web and desktop. So that changes how we actually facilitate trial. For Buy, we use a variety of different tailored paywalls, both time based and feature or usage based, and we tailor the offer to distinct geographies, different segments and channels.
For example, with the introduction of Lightroom CC last year, we also introduced a $4.99 plan for Lightroom CC in the App Store. We also offer things like special pricing for students and graduates. We allow businesses to pay on multiyear contract. And we actually support and go to great effort to support the relevant payment types that are going to optimize conversion in different markets. So in Germany, we allow for bank transfers and debit cards.
In Japan, bank transfers and convenience sort payments, which wouldn't be very common here in the U. S. I typically don't buy Creative Cloud when I buy a Slurpee at 711. So okay. For use, ongoing engagement is the lifeblood of any subscription business.
I think we all know this. And early in the journey, we really work hard to understand user intent. What does this person want to create? Why are they coming to us? Our goal is to help them create and to create compelling content, but do so as quickly as possible.
So we start by steering them to the right application experience, to the right apps. As you saw in the keynote this morning, we are investing a lot in that first mile experience, getting the customer into the funnel, getting them into the journey and making sure that we're helping them with training and the right content to get them started very quickly. And not just on the website, but embedding that deeply into the first mile of the application experience. And we also triggered discovery of what we call high value actions. These are valuable actions that lead to product success in terms of getting the result out.
If I want to publish my video to YouTube, I want to make sure that we want to make sure we're presenting the right actions to get them there quickly. And correspondingly, that leads to more commitment and deeper engagement from those customers to Adobe. In renew and up sell, the final stage of the journey, understanding the user persona lets us deliver relevant up sell and cross sell offers. For example, we offer Creative Cloud students upon graduation a promotion to graduate with us to Creative Cloud Individual to the full plan and we're very successful with that promotion. Similarly, for small businesses who are using Creative Cloud and Document Cloud, we have the ability to target and market stock or Adobe Sign to really get them to purchase more value and to engage more deeply with value in the applications.
Or if a Lightroom CC customer, for example, who's using this new product Multi Surface, who's storing all their photos in the cloud starts to hit the storage limit, we present them with an offer for additional storage directly within the application experience. So that's a summary of DDOM. DDOM is an incredible engine that lets us scale and manage a very complex digital business. We're beginning to take these same concepts and apply this framework to the enterprise to enable understanding and targeted programs to accelerate the enterprise lifecycle as well. Running a business at this scale and inspecting performance across the different factors requires us to operate fundamentally differently, to operate like a machine with a high level of precision and sophistication, and I can say that.
That's what DDOM is all about. Every morning I wake up, I get a cup of coffee and I log into my DDOM dashboard. And here's a representation of that dashboard. Clearly, we've matched out a little bit of the data or the website is not loading, I don't know which. But if you look at this, from left to right, I can select the quarter, I can select the geography down to the different country, I can select the offering, I can look at the performance, I can look at the KPIs that we've set across each stage of the DDOM journey and understand how are we off performance and specifically work with my team to take an action to correct that delta.
So this is a very much a living, breathing system that we run. I can change my views by time period, journey stage, offering, customer segment, etcetera. And my staff knows that this is the first thing I do in the morning, so they've become early risers as well. So hopefully that gives you a sense of the overarching Digital Media drivers and what's behind the success of this business and how we're managing this business at scale. What I'd like to do now is dig into each one of the businesses separately, starting with the Document Cloud.
And then I'll set up Creative Cloud and invite Scott to the stage to really go into the product strategy on Creative Cloud. Adobe Document Cloud is the platform for digital documents. Document Cloud lets you access everything that you've done with PDF across devices. So the power of PDF has always enabled people to transcend the limits of the physical document with amazing reliability, fidelity and security. That's really been the value proposition of PDF and Acrobat.
We've been very busy moving all of these verbs of actions, all the things that you can do with a PDF from create, scan, edit, sign and collaborate, and moving them from the desktop to mobile and to the web and lighting up powerful new services on top of that like sign and like collaboration. And this is a huge opportunity. There's a big opportunity still moving from paper to digital. There's still a lot of paper out there and I think that there's that drives a lot of core organic growth for our solutions. But the real unlock is when you've already moved to digital and you start to take advantage of being digital and you start to activate other processes and ways of actually manipulating and working with PDF at an organization level.
And that's where the real unlock comes for being in the cloud with PDF. Clearly, very strong momentum. This is a business that's operating at very, very large scale and reach. There are not many companies that can talk about having things like over a quarter trillion PDFs opened in Adobe apps over the past 4 quarters. So that's a pretty massive number, more than 600,000,000 mobile app downloads and growing at a very rapid pace.
We've been very successfully migrating, as we call it, feathering in the subscription model into this business and expanding the user base in the process. In the channel, we've seen a 10 point increase in the subscription units over the past year alone. And like Creative Cloud, we're seeing that subscription model bring in a lot of new users into the franchise as well with more than 40% of users coming in new to the Acrobat franchise. And this has led to 5 quarters of greater than 20% subscription growth in this business. There's a considerable amount of remaining opportunity with customer migration, but I have to underline that new user acquisition given the subscription model, just like Creative Cloud, is also a core driver in this business.
And we're also seeing acceleration in momentum in the sign business with more than 50% of Fortune 100 accounts using Adobe Sign. Documents are truly the currency of business and we have broad and deep relationships across different verticals. But our enterprise government and education customers aren't just looking to Adobe to provide an e signature solution. They need a partner to help them accelerate their digital transformation with documents writ large. I'd like to highlight just a few examples of how Document Cloud is powering digital transformation today.
No one wants to print out a form to open a bank account in this day and age, and that's why we've worked with HSBC to modernize the process of opening accounts and to help them accelerate their business. Documents should be online, not at the DMV. No one wants to stand in line at the DMV, right? So we worked with the State of Hawaii to put 400,000 documents online and to power e signature to improve citizen engagement. And while some sales leaders are pretty good at making up excuses, no one wants to explain why their outdated technology kept them from closing a deal, right, Matt?
Okay, bad joke. That's why we worked with Merck to reduce their time to close from 7 days to mere hours. This customer success starts with product innovation, and we just announced the biggest release of Document Cloud since its inception. Central to the release is Acrobat Reader and Acrobat and reimagining how work gets done with PDF. This is PDF for the mobile era, turning your phone into a scanner with Adobe Scan.
And that document is a form, and if the document is a form, filling it out and signing it, keeping all of your documents at your fingertips in a multi surface system, streamlining the dreaded process of reviewing documents with an online review service. We've also touch enabled PDF with editing on tablets, and we've made signing any document with Adobe Sign an integral part of every experience within the Document Cloud, including Reader and Acrobat. Acrobat and PDF are very well established franchises, but we want people to understand how quickly that we are transforming the platform with powerful new mobile and cloud capabilities. In other words, this is not your mother's PDF. So we are investing in high impact campaigns.
I don't know how many of you remember the Buick ad, okay, that resonate with today's expanding customer base. Here's an example of a campaign that Ann's team has been very creative and really driving the new message and the new position for Document Club, playing on the Like A Boss meme that exudes confidence and control. We are letting the world know that Acrobat lets people get their to do list done with PDF with capabilities like scan, edit, sign, review
like a
boss. So this investment in product and brand will help us realize key growth drivers that we see in the Document Cloud business. And as a reminder, and Gloria has laid this out, we see the growth drivers across the core product and customer base. Our market the expanding market to address new customers and expanding the value that we actually take to both the existing and new customers in the franchise. For the core, we see increased demand for PDF capabilities, particularly as we reinvent the category.
And we also see the migration from perpetual that continues to be an important growth driver. We are increasingly proficient at converting free reader users to paid users to Acrobat subscribers, and we also see significant seat expansion in both SMB and in enterprise. And we're investing in both international and domestically to drive this growth. With our market expansion strategy, we're adding a new source of growth drivers to the Document Cloud. We've already achieved significant scale on mobile with the FreeReader and Sian apps that I've talked about on the business momentum slide.
In 2019, we will increase our focus on paid services for both mobile and cloud centric customers and begin to monetize those customers at a more aggressive rate. We're also expanding distribution of reader mobile and scan, both through mobile app stores and through partnerships. For example, we integrated scan with Samsung's Bixby AI assistant and reader mobile will now ship pre installed on Google's newly announced Pixel Slate. So really expanding the reach that we have with the products in these partnerships. And of course, we're leveraging the corporate level partnership that we have with Microsoft to tightly integrate Document Cloud with Office 365 and Dynamics 365.
So these are all important partnerships for us to continue to proliferate Document Cloud and expand the market. And then finally for value expansion, as I mentioned, our enterprise customers aren't asking Adobe to just help modernize their signature solutions. They want us to help them modernize their document processes and experiences around business transformation. This includes e signature, but also encompasses broader value that Document Cloud provides beyond signing documents. As you've seen from our latest release, we've added a number of growth drivers, including collaboration and are increasing our investment in document intelligence as a key differentiator with Sensei to differentiate the Document Cloud platform.
So these are all across core market expansion and value expansion, very important drivers to the available market that we'll talk about. This all translates into a projected 2021 Document Cloud TAM that expands 42% from the last time we shared a TAM with you from $5,300,000,000 to $7,500,000,000 $2,500,000,000 is represented by the core. As I mentioned, this includes migration, but we will also see real expansion in the TAM with increased Acrobat demand. The go to market expansion and our availability to convert free reader users to paid Acrobat subs, So all that happening at the core. The newly added market expansion TAM is about $500,000,000 and that represents the opportunity for mobile and cloud service offerings.
And we also capture the value expansion TAM that increases the opportunity for enterprise digital transformation, adding collaboration to the previous TAM and document intelligence to round out the market expansion. So now let's turn to Creative Cloud. I'll do a brief setup and then hand it over to Scott. I'll touch on the business momentum and then we'll wrap up by outlining the key drivers for Creative Cloud and the resulting 2021 TAM. As Shantanu shared earlier, our vision is for Creative Cloud to be the creativity platform for anyone who has a story to tell.
The proliferation of touch devices, social media, the new mediums of creativity and artificial intelligence have really accelerated the democratization of creativity. So anyone can tell that story with impact. Creative Cloud is the platform for creativity, the world's best desktop apps like Photoshop, InDesign, Lightroom and Illustrator. We've been focusing increasingly, as Scott mentioned this morning, and called out several new applications. It's not just mobile apps, but apps that are now part of a multi surface system like Lightroom, what we're doing with Photoshop, what you saw with Adobe Premiere, Rush, etcetera.
So a big part of this momentum going forward is these multi surface systems that we talked about. An integrated marketplace for images with Adobe Stock for fonts, 3 d assets, motion graphics templates that are brought into the video workflows, etcetera, so users don't have to start with a blank page. An integrated community where users can learn from others and this is at the heart of the Creative Cloud is really this community that has grown from 1,000,000 when we acquired Behance 5 years ago to now more than 14,000,000. And across this experience, we leverage Adobe Sensei that drives a lot of the magic, but also a lot of the productivity improvements that we talk about around Creative Cloud and lets people get their work done faster. The CC business is continuing its very strong momentum itself, as demonstrated by our financials and other key indicators.
We continue to attract new subscribers at a high rate to the franchise. For the period ending Q3 this year, over 45% of the members are new to the Creative Cloud franchise. And for those of you who have been tracking Adobe over the years, this used to be below 20% when we first started the transition to Creative Cloud. Mobile as a platform is an important contributor to growth. We now have more than 110,000,000 mobile customers who downloaded 1 or more mobile apps and have a mobile ID with Adobe.
And last year, as you remember, we introduced Lightroom CC as our photography offering across all these different surfaces. We introduced the mobile phone offerings that I referred to earlier, and that's brought a lot of additional customers into the franchise and has helped us grow the overall photography offerings at greater than 40%. Innovation is our in our products and our services has been a core driver in overall adoption. Since the introduction of XD, we've seen its adoption grow significantly. More than 3,000,000 unique users who have downloaded the XD app overall, and you can see the pace of innovation that we're driving as we demonstrated this morning.
Our enterprise business continues to advance and we've continued to our new customers continue to adopt services at a rate of 82% of the enterprise seats that are now licensed with services as part of their contract. And finally, we continue to add more and more content types across all the full spectrum of content from 3 d, 2 d, video, graphics templates, etcetera, and integrate those directly into the Creative Cloud workflows with Adobe Stock, where we've enjoyed more than a 30% year over year revenue growth. So very strong growth on Adobe Stock as well. Now I'd like to welcome Scott up to recap the product strategy and some of the announcements that we went through today and the key initiatives that will continue to drive momentum and product on Creative Cloud.
Well, it is my great honor to lead the product organization for Creative Cloud. I mean, I've been passionate about building products for creative people for about 12 years, starting with the beginnings of Behance back in 2,005, 2006, the acquisition by Adobe in 2012, ran a number of parts of our creative business and product for those 3 years that I was here. And then now I'm called, we call it a boomerang internally. When someone comes right back because they still feel like we're in the early innings, which I really do. There are a few lenses that I look at the opportunity for Creative Cloud through.
I would say the first is what Brian touched upon, the value expansion. Think about it. I mean, creativity is no longer an isolated pursuit. More and more people want to work with a team of people. That is the migration from the CCI plan to the CCT plan.
And everywhere we look, we see creative professionals that now want to start to collaborate in new ways with other people. And as we evolve our products to multi surface systems where this content lives in the cloud, that unlocks so many opportunities for collaboration. And that's value expansion for our business. Market expansion, we saw the launch of Premier Rush today, democratizing creativity, allowing anyone to achieve that professional grade output with tools that they can actually learn quickly and use and be successful and quickly. So I'll talk about that.
And then of course, the core, helping creators be more successful more quickly. I have never met a creative professional who would rather take 3 hours to do something they could do in 3 minutes. That's what Adobe Sensei does, as well as thinking about the edge of every creative segment that we're in. There's so many interesting things happening in the edge of every segment and enriching that core is just a huge opportunity for our business. Also personally, when I get to sell candidates on joining our product organization every day, from some other great Silicon Valley companies.
I love to talk to them about the short term low hanging fruit opportunities we have to just make our products so much easier to use and to really help people be more successful more quickly. And that is, we are in the early innings of doing that and that's low hanging fruit for us. The mid term opportunity of bringing a product like Photoshop to other surfaces, which we preview today. And then I get people really excited about the long term opportunity. New mediums like augmented reality and voice.
I mean, this is Adobe's playbook, helping people go from print to web, from web to mobile, from mobile to what's next. We are really good at that. And we just have a very good sense, I think, of what the future mediums are gonna be, and how to help our customers be successful in them. So let me just go through a few highlights from today and then also just talk to you a little bit about our product strategy. So today we highlighted a lot of just to start really enriching the core, shipping great updates across our entire product line, whether it is Acrobat and new ways for people to share, get feedback and review their work within the PDF.
InDesign, I mean, we got a huge applause when we showed that you can make a, say it's an annual report and then you'd suddenly decide you're going to change the format. And without knowing it, you probably created just 5 to 10 days extra work for designers. Well, no more. InDesign automatically reformats something and uses a lot of Adobe Sensei intelligence to save so much time and anguish. And I could just go across each of our products.
There are just so many great updates that we ship today across the core. We also talked about some new products and previewed some new products as well. So Premier Rush, I mean this is extraordinarily exciting. I mean until now, video professionals would have to really spend a lot of time and even sometimes going to school to learn a product like like Premiere Pro and After Effects and how these work together, it takes years to become a real expert in these products and there's so much incredible technology in those products that now we take in some parts and we made them accessible to anyone. And so Premier Rush is a cross surface solution.
You can do something on phone, you can do something on tablet. You can do something on your desktop. And it's a very empowering product. Millions of people who aspire to make professional grade video, this is relevant to them and of course this is billions in terms of TAM of value because video is everywhere these days. YouTube and company communications and marketing and social media, you have to create video every day with high frequency.
This product was made for the modern video creator. We previewed Photoshop on iPad and we showcased Project Gemini. I mean, this gives you a sense of where we're going across our products with this multi surface strategy, turning our products into systems. And the promise we made to our audience, our customers today is that you will no longer be bound to the desktop. But this is capitalizing on something we know already works.
Lightroom. Lightroom was a product that was limited to the desktop. Now it's a multi surface strategy and what we're seeing, we're seeing tons of customers come in on mobile first and then start using the desktop or come in on web and start using the desktop and then start using mobile and some customers only use mobile And what we realize is that the more surfaces a customer uses our products on, the higher they retain, the more they engage, the more collaborative they become with other people. So we know the playbook. We're going to bring that to other parts of our product line and with high confidence.
And then Adobe XD, I mean, we really showcased the leaps and bounds that this experience design platform has come over the past year. We've been shipping updates every month. We also showcase some bleeding edge technology that no other experience design product has like voice interface design today. And that's the vision of XD is to help people be successful on building interfaces for any experience, whether it's voice or augmented reality or and of course, every screen that we know of today. We also showcase Project Aero, right, which is the future of augmented reality and making sure that our customers can be successful in it.
So actually, I think we have a 1 minute video of Premier Rush for those of you that missed it and then I'm going to pick up where I left off.
What's up everybody? I'm about to shoot
and edit my video today with Adobe Premiere Rush.
All
right. So we really are excited for Premier Rush to do what Lightroom has done for photography, just make it a much more an expanded market of folks that can be successful in that segment. So when I think about Creative Cloud product strategy, these are the initiatives that we are focused on. We're focused on the 1st mile, rethinking the customer experience, getting ramped up to speed and being successful in the product. We think about experience design as this platform and this ecosystem of 3rd party plug ins and making sure that customers can design for an interface.
We think about expanding to non pros, the market expansion opportunity, multi surface systems, those products assistance that I talked about earlier. The Creative Cloud services that are really the connective tissue across all of our products, new mediums, which we talked about a little bit this morning and new stakeholders, making sure that creativity becomes a more inclusive process. Every company that says design is our competitive advantage, we want to actually help them deliver on saying that. So let me quickly walk through what these mean for us, just give you a few examples. And anyone on my team will tell you that the common term this year has been 1st mile, 1st mile.
What is that customer experiencing in their first mile of the product? This is also a key part of the DDOM that we're using to manage the business that Brian shared with you, that data driven operating model, making sure that someone comes into the product, we know who they are, we can personalize it for them. If they're professional and they're experienced, we're not going to treat them like a beginner. But if they've never used Photoshop before, we're going to help them be successful from the get go. We're also going to help them learn through live streaming.
And this is actually a quick fascinating tidbit. I shared with you this morning how many minutes of live streaming an average customer is watching 100 minutes of live streaming when they're discovering it. They're sticking. This is how they're learning. Bringing live streaming to our products essentially makes them viral for the first time.
And you could be in a product, you could click live stream in the future and share a link that anyone could see on Facebook or Twitter of you working in that Project Gemini that we previewed this morning or Photoshop on the iPad or some other product. And then imagine those people watching you create, getting inspired and clicking download and then they start using the product. That's why we're so excited about the potential of live streaming growing our market. Experience design, so really transforming the world of interactive design, making sure that people can create for any interface, making it super easy to do that at high velocity. When I go into customers and teams and ask them what they're struggling with, it's always the same thing.
We are creating for more and more devices and sizes and surfaces. And it's just like, can we possibly scale our design team at the speed of the scale of the number of devices we have to support, the number of surfaces? The answer is no. They want a product that will help them do that. So that really is something that experience design and our and Adobe XD aspires to do.
When you think about expanding to non pros so we've talked about Rush, Lightroom, just it continues to be a great example. Brian outlined the 40% year over year growth of photographers using this product. I'll also point out Adobe Spark. So this is actually an ecosystem of products, 3 products that work together that are next generation, can create quick videos of like animated sort of stories and it's really a visual storytelling platform. You can take any sort of graphic template and customize it and make it for yourself.
It's become a real success among students. Over 2,000,000 students have access and are using Spark now. And, and we have, it's just, it's an entirely new market of folks that are coming in. And some of them may come in saying, I want to Photoshop something. And what they actually might realize is they want to create compelling graphics and help tell a story.
And so one of our challenges and opportunities is to direct them to a product in which they will be successful. And Spark is an example of one of those products and how we expand to non pros and build that build the market. The multi surface systems, extending creativity beyond the desktop. And so I think everyone understands what this means. The one thing I would just underscore is the tremendous unlock that we have when suddenly this content lives within the cloud as its source of truth.
And Abhi, who will talk in just a bit about the technology infrastructure that's supporting our cloud efforts. I mean, this is a serious feat. But once we have this working, we can start to deliver customers' experiences anywhere customers can easily collaborate on documents in the cloud. And that notion of emailing files to one another and stuff will just be something of the past. So we've really built a native cloud solution that is unique to Creative Cloud that we think is better than anything else
else out there.
The services, I don't know if you were in the keynote this morning when I shared some of the announcements around Adobe Fonts and I got somewhat unexpected applause from people. People really get excited. Creators really get excited when they then services that connect all of their products just work seamlessly. And the idea that we removed a lot of the limits around fonts just made it so much easier for all of your fonts to be wherever you are, whenever you need them. This is something that's super important to our core customers and increasingly to everyone.
I mean, fonts make everything look great. Stock, making sure that stock is integrated in the perfect way in all of our products, the customers can find the image they're looking for
with the
help of Adobe Sensei. We have so much intelligence now around this inventory of assets And so stock is something that we are just continuing to invest in. And people are the attach rate of stock is growing and the importance of stock in the product is becoming more is growing as well. And then last but not least, close to my heart Behance, but it has grown remarkably. It's now I think Behance is one of the top 200 or so websites in the world with over 15 14 or so 1,000,000 members and growing.
And the live streaming piece that I talked about earlier is a really important part of what customers of Creative Cloud get and how they learn. New mediums, whether it's voice, whether it's virtual reality, whether it's augmented reality. There are a lot of debates about what are the future mediums and which one will be the one in which we're all living in, which one will be as big, if not bigger than the internet as we know it today. What we do know is we need to help customers succeed in whatever that is. And that's something that we take very seriously.
We don't expect our customers to always learn brand new tools. We want to meet them where they are. And again, that's something that is an established playbook we have from the past migrations of print to web and web to mobile, and we're continuing to do that. So you saw a little bit of that with Project Aero today for augmented reality. You heard a little bit about our partnership with Apple, and we're partnering with all of the major device makers to think about the future of augmented reality.
With voice, super exciting, a new way of interfacing with the world around us, and we're powering and supporting voice design and XD shipping today. And we're also thinking about 3 d and just the world of 3 d creation and what is what are the Photoshop like features for 3 d that we need to support. So we have exciting things and work underway in that department. New stakeholders. It's really exciting to think about the potential of collaboration and what this means.
And when I talk about the value expansion opportunity, first of all, I don't think any creative wants to or should work alone in the future. And that's a distinct difference from the past where you might have gotten your copy of Photoshop and worked at your desktop and that's it. These days collaboration, this is the mindset of the next generation creative professional, which is why our migration to cloud was just so important and why the multi surface system offering is so important. And this is going to be a big part of our business going forward. In the organization with Adobe XD and experience design, every experience design essentially ends in a prototype and every prototype starts an entirely new part of the process of the creative process sharing that prototype, getting feedback from different stakeholders.
The legal department now wants to see the prototype so they can plan around what the implications of this new product are going to be. The C suite wants to see product because again design is a competitive advantage in the enterprise. And so they want to be a participant. They want to be a constituent of creativity within an organization. And so we are building our tools to support this natively.
And there are great implications for us on a business level as well. I mean, this is really the sell becomes not how many creatives you have in your company, how many people want to be a part of product in your company, of design, how many people actually want to have a say. That number is quite a bit bigger. And then so finally, I'll just wrap up by saying I just couldn't be more proud of our teams. The folks that I get to work with every day are some of the most brilliant, passionate, inspiring people in each particular creative field.
And they're always thinking about the future, about getting closer and really driving towards that empathy with customers. And we all feel like we're actually still in the early innings. So I couldn't be more excited. So thank you so much. And then I'm handing it over to back to Brian.
Thanks, Scott. You can feel the passion. Clearly, we're driving a huge amount of innovation across those initiatives. Let's jump in real quick and I'll cover the key growth drivers for Creative Cloud and then get into the projected TAM for Creative Cloud and wrap up with the aggregate TAM for Digital Media overall. So consistent with Document Cloud, we think of the core growth drivers for Creative around core market expansion and value expansion, so no surprise there.
Core TAM includes the existing revenue for Creative Cloud, Adobe Stock and Acrobat sold through the CC funnel. I'll remind you again that the momentum that we have in Document Cloud and Acrobat is very strong. We have we capture some of that on the Document Cloud side through the Acrobat funnel and then a proportion of that on the Creative Cloud side through the Creative funnel. We also have unpenetrated Creative Professionals. We have growth in education and we have the remaining installed base of creative suite user and that's dwindling over time, but there's still a material installed base that we're moving over to Creative Cloud.
So the major growth driver in the core category is the growth in Creative Pros, especially in emerging markets like India and China. And we've actually conducted a broader segmentation and really have a better understanding of the growth in those markets. There's also growth in the number of creative occupations like web design, game development and online publishing. And finally, in Creative Pros, they're also being fueled by people who are actually reskilling and moving into the creative profession as well. The remaining core drivers are very similar to Document Cloud.
We have expansion and seats in SMB and the Enterprise Business segments. We have growth in demand in the Student segment. And then we're also converting from our anti piracy efforts overall. The market expansion TAM includes opportunities that really align with a lot of what we shared with you today around the opportunity in mobile with creative imaging, the opportunity with video and really going after that online and social video creation category with products like Rush. Visual communication overall, but particularly with Adobe Spark, there's a that's a growing base and there's a lot of opportunity there.
And then we still have some legacy opportunity with perpetual customers on the Elements and the Lightroom basis that we count in that segment. We continue to see broad interest in Creative Expression in general. And we're really seeing momentum that we're creating actually with the mobile solutions and the cloud centric solutions for creativity. A great example of that is the introduction as we mentioned several times today of Lightroom CC, where we have we've seen a dramatic expansion of the free base of Lightroom CC, but much more encouraging is the momentum that we're gaining and actually converting users on mobile to the Lightroom CC franchise. In addition to photography and creative imaging, we talked about video, which is a large opportunity.
And we have new audience in emerging markets where particularly as you move to cloud and video based solutions, they are going to naturally skew that direction because they're less desktop centric with their use cases. We've updated the TAM to reflect the opportunity for online video creators and social influencers who are passionate about building that social following. And the market expansion TAM also includes the opportunity for Spark that we've mentioned before. Finally, we're representing expansion in that TAM with the launch of new applications on the mobile devices. And then we talked about that earlier today, there's expansion opportunity that we're capturing as we grow the footprint in market expansion with the partnership activities that we're engaged in with some of the device manufacturers.
Finally, for value expansion, this reflects the opportunity to deliver and monetize incremental value to both the core and market expansion audiences with new solutions around Adobe Stocks, so content, collaboration stakeholder seats and opportunity in Creative Services. So based on the broad trends and drivers that I just shared with you, we expect the overall CCTAM to grow to $29,200,000,000 by 2021. That's our estimate. And this represents roughly a 20% growth rate over the $24,200,000,000 TAM that we shared with you last year. In core, we expect that TAM to increase from $11,400,000,000 to $14,500,000,000 and the key driver is growth in the creative occupations.
In the case of market expansion, our TAM by 2021 is projected to be 7.2%. Again, the major drivers here increased opportunities in video, creative imaging, multi surface offerings with Photoshop and the iPad and then mobile only offerings as well. And then on the value expansion, our TAM is estimated to be 7.5 percent, and that will be natural growth for some of the services that we've talked about. So taking Creative Cloud and Document Cloud together across core market expansion and value expansion, the projected aggregate TAM grows to 36,700,000,000 in 2021, and that represents a 22% increase from the total DME TAM that we shared with you last year. Just to net it out, I mean, it's hard to express the full spectrum of opportunity in this business and the excitement that we all feel for it.
Explosion of content and explosion of content that doesn't touch just the creative assets that we all get really excited about at MAX, but the document opportunity is just massive and really we're in the early days of that conversion of the perpetual base to subscription. But even more exciting is the opportunity to activate whole new funnels as we deliver more mobile offerings and we start to add to that $600,000,000 plus footprint of mobile apps and embed the Document Cloud systems with partners like Microsoft and other web applications that will then become a new front end to the funnel into the Document Cloud. We're seeing an unprecedented rate of innovation, both at the platform level with the help of much of Abe's research and platform team, but also at the core product level. A lot of what we showed today on stage and last year, there were years years of effort that goes into pushing these products in the directions that we have. And I think that this is just the tip of the iceberg of the level of innovation both on product and platform that you're going to see in the coming years.
Mobile is a key agenda for us. Mobile is both an innovation driver and I think that you see that coming to life with things like Photoshop on the iPad and the phone to follow. But mobile is a very, very important acquisition vehicle for new users, both in international markets, but also new classes of users that go beyond our core audience even in the more mature markets. The reimagination of PDF is a massive opportunity. And I think that we are still in the early days of the potential that we can bring to individuals and organizations that are committed to a fully digital document workflow and want to get the most out of that workflow not just for individuals but in a group via collaboration.
It's a large and complex business that we have our arms well around and we can only do that by building out a data driven operating model on the backs of Brad's business on our Experience Cloud business. And I think that we are above all uniquely positioned as customer 0 to innovate in this area and to really deliver that as a very nuanced and personalized experience across all of the different factors that I laid out for you today. And just taking a step back, I couldn't be more excited to be like Laurie to be at Adobe today to be both an employee and shareholder. And we just have a magnitude of growth drivers that we're going to continue to push to grow this business. Thank you very much.
We are now going to take our break. So I think let's have everybody back here by quarter 2. They've set up some refreshments outside outside and we'll see you back in a few minutes. Note that I said this is break not Q and A session. So we'll see you back in a few minutes.
Thank you.
If everybody could take their seats, we're going
to get started in just a minute. Please take your seats. Thank you. Please take your seats. We're going to get started in just a minute.
All right. Thanks, everybody, and welcome back. We're ready to start the second half of the meeting. I'd like to welcome to the stage Brad Rencher.
Okay. Good afternoon, everybody. Looking forward to just maybe talking for a few minutes today about Adobe's other multi $1,000,000,000 business, Digital Experience. So it's an exciting time I think for the industry and kind of what we're doing and what we're how we're building the business. And let's advance the content, there we go.
You think about businesses today really transforming how they compete and what is Adobe's role in that. And I believe that our opportunity is significant as we'll go through the opportunity, how we're set up, the things that we want to go and do. We believe that we have a unique role to play as businesses continue to transform. And if I could just get my notes up here on the other screen, would be fantastic. Let's go to so for us, the journey that we've been on really over the last decade has been exciting.
As you think about Fred's Gloria setup from the time that Adobe really identified the opportunity in the enterprise and grew the business from 2,009 until today, we have been on an historic run. We've created categories, categories that have never existed before. We created new products and innovation that had never existed before and we've continued to execute day after day, month after month and year after year. And where we arrive at this moment, we think that we really are just poised to continue this type of strong growth and category
creation.
And for us, it really comes down to not what is it, what's our revenue growth all about, it is really how we're impacting our customers' business. And we're fortunate to work with world class customers really across industry vertical from high-tech to financial services, travel and hospitality, B2B Manufacturing, retail, meeting entertainment. No matter where you go in the world, the leaders in every geography and in every region use Adobe products to transform their business. And for us, we measure that not if this isn't a sale where you're going in and just hoping that you somehow make a difference for that organization. You talk to any of our customers anywhere in the world and they believe and they expect that we're going to drive their top line revenue growth and we're going to impact their profit and bottom line.
And what I want to share with you here is a little bit of the land and expand motion that we have with our customers here at Adobe. And the way to read this slide is there's the column of industries. So you've got here in the industry, you've got a large multi channel retailer, a large telecommunications provider. For each of those customers who are obviously not putting their name here because in terms of their they see this as their IP for how they're driving their business. You see the use cases that we're delivering against.
So for the multi channel retailer, their objective was to increase their e commerce revenue. They wanted to find how to attract more customers efficiently. And what we've been able to do for them since we started working with them is drive over $250,000,000 in incremental revenue growth, top line growth that would not have been there without focusing on those use case and digital transformation. That's the we make our customers money value proposition that we're able to take to market and it continues to impact all of our customers as we work across the board and for us that means from year 1 to year 4, our ARR at that one customer went from $3,600,000 to $8,600,000 Let's talk about a few others. On this slide, let's talk about the large financial services company, a bank.
What were they looking to do? They wanted to increase their credit card applications and credit card conversion, which is a B2C motion and they wanted to increase their commercial banking business, which is a B2B motion, all at one company. And the impact there was a 70% increase in their high value customer engagement, which drives to increase top line revenue and for us a $2,800,000 ARR is now an $8,000,000 ARR. B2C, B2B and B2B2C all in one company. And just so it's not all really, really big numbers, I do like big numbers and big ARR, but we also serve mid sized organizations.
We serve a B2B power management company with the Experience Cloud. What are they looking to do? They're looking to drive down their operating costs, create relevant experiences across their channels for businesses who are looking to engage with them. What they were able to do is drive a 4 times efficiency gain of their operating assets, which obviously impacts their bottom line and for us that $51,000 customer 4 years ago is now paying $340,000 a year. So for us, this land and expand motion of how we continue to engage and drive business impact is a key motion for you to understand and a key part of the growth drivers that we'll talk about in a while.
So across the board, here you see what the land and expand motion means at the aggregate. And you the key part of the land and expand motion is first you have to land. And 33% of our new book of our bookings today are new bookings. This is expanding where we can go in and continue to cross sell and to continue to drive that type of growth motion. And then you step through, 39% of our customers are using, all our customers are using more than one solution from Adobe.
For the last few years, we've talked about how important it is to us that we're building an integrated cloud platform. We're building an integrated suite of products. These are meant to interoperate and meant to drive greater efficiency. So we measure this as a key KPI of the business. How many solutions of ours are they using, because at the end of the day customers want to get out of being systems integrator and they want to be able to operate their business and that's what we want to do.
These metrics are incredibly important to do that. You go all the way to the top, our top 100 customers, over 92% of those have more than 3 of their solutions. I know if we're at that point of engagement and depth of relationship, they are operating their business much like Creative Cloud is operating our business here at Adobe on the Experience Cloud. Across the ecosystem, this has been a seminal year for our partners in ecosystem. As we've done we've grown dramatically, the bookings that we've done with partners, We've grown dramatically with the acquisition of Magento, our developer community, and we think it's an exciting time for us to continue to expand our reach and the breadth of our ecosystem.
And from a product standpoint, start at the bottom end of this page, why is Adobe so uniquely positioned in experience, in digital? You go across every day, we serve $15,000,000,000 or 15,000,000,000 web pages every day. Every day over 100,000,000,000 third party records. This is other data that people are bringing into the Experience Cloud to put together with our behavioral information that we have the 100 or 100 or 100 or 1000000000, sorry, I was working my way up the ladder, trillions of interaction to bring that together to get to a better customer data repository. And then you go 3,300,000,000 personalized targeted offers every day.
You go to per hour, 4,000,000 ad hoc queries where analysts are running reports on trillions of rows of data. 2,500,000,000 event feeds constantly populating so that it sits at the edge to drive personalization. Per second, 3,500,000,000 ad opportunities every second are being evaluated by the Experience Cloud and over 2,000,000,000 profiles are active at any given time and we don't stop that per second because we do think in milliseconds. That's where the magic happens and milliseconds matter today in experiences. So for us it's been a really exciting time because we have not only had the opportunity to work with world class customers, we have been increasingly recognized every day, every week and even just last week, again recognized as a leader in the categories that matter in digital experiences.
And this is just a representation of several of the Gartner, Forrester and other analyst reports that have shown us as a leader and in fact, you look at the 30 to 35 categories that we think are going to matter in digital experience and we're a leader in 23 of those. We're close to being a leader in the other 11. Our next closest competitor, let's say, where Salesforce, Salesforce is the leader in 10, they didn't even qualify for 16 of these. We think that we are uniquely positioned to continue to win in digital experiences. And this really brings us to the market context of digital transformation.
And you guys cover lots of enterprise software companies you're in this space. 20 years ago, digital transformation was hooking up your supply chain systems, hooking up the back end, getting your financial reporting done faster. And then we went to like let's digitize our Rolodex and keep track of our selling conversations. This is what digital transformation meant in decades past. That's no longer enough.
Really the primary basis for how people are going to build and grow their business is around the customer. And the transformation, the CIO in the last few decades is probably the C level executive that was on the hook to drive digital transformation. CIOs are still on the hook for that, but it's become much more pervasive across all of the C suite. And if you look at what are we hearing from the C suite across the world, what are the questions that they're asking, what's on their mind? Here's a sampling of some of those questions.
Questions like, who is actually my customer? I'm stuck between a distributor and I don't actually have that real customer intimacy that I want. If I know them, how do I find more of them? How do I convert them to paying customers? How do I create a direct relationship with them that's ongoing?
What's the return on my marketing spend? These are the questions that are at the top. You want to know what every C level executive across the world is thinking and what they're worried about, it is these questions. And really the common denominator across all of those questions is the customer is now at the top of the digital transformation agenda globally in every size company and in every industry. And it's interesting, we used to talk about owning the customer, who owns the customer.
You can't own the customer anymore. It doesn't sit in one of your enterprise systems either. It needs to be pervasive because every touch point you have with a customer needs to be measured and it needs to be brought together holistically. And with customers, you can engage them, you have to engage them where they are and what they want to go do. And we like to talk about you have to operate with a subscription mindset during this era and what that means is, your customer, they make a decision whether to stay with you or to leave you at every interaction.
And this is changing how businesses need to organize and what they need to do. So really at the end of the day, enterprises need to become experience obsessed. They need to wow their customers at every single interaction point. And at Adobe, we are committed to helping companies everywhere to do this. So that sounds easy.
You guys probably walked in and said, what's at the top of digital transformation agenda? You might have guessed customers. So what's so hard? What's holding businesses back today? Let me offer 3 things.
These are the challenges that are, I believe, holding enterprises back to execute on this digital transformation agenda. 1, escalating customer expectations. And this is when it's not hard for any of us to think about because I just want to personalize this to you. What are the expectations that you have of a brand that you care about, that you choose to spend your time with and engage? We expect highly personalized interactions.
We expect that interaction to be consistent, meaning every time I interact with you it's about the same. It's got to be compelling. It's got to be continuous. These are the interactions, these are the expectations that we have and every time we have a great experience, our expectation kind of clicks up a little bit. We continue to have those escalate.
This is the new competitive battleground as you think about how to meet these customer expectations. And the interesting thing is all of us are consumers in our off time or maybe sometimes at work too. But we are definitely when we go into our jobs, our businesses and we're procuring products and service from other businesses, we actually have the same expectations. So this is not just a B2C phenomenon, this is also a B2B expectation. So second, new engagement and experience and business models.
That's not too hard to think about. You think about what even what we the Adidas demo we saw from stage today. And you think about AR, you think about voice that you saw demos today. These are new interaction models that every company in the world including a manufacturing company in Des Moines, Iowa has got to figure out what am I going to do with voice and augmented reality to have a better customer experience. That's a pretty daunting ask and a pretty daunting challenge.
We think these engagement models are here to stay and you've got companies that you never would have thought would have been subscription businesses. I pay $12.99 a month to have socks shipped in my house, socks. That's a subscription business, who would have ever thought, but these are business models that every company is trying to figure out how they build and drive. And last, the existing enterprise systems that enterprises are turning around and saying customers are at the top of my digital transformation agenda, they turn to the systems that they have and they're finding that those are inadequate to actually deliver on the task at hand. They struggle to interoperate one with another and they are insufficient to deal with the volume, variety and the velocity of data and content required to win in this industry.
So this legacy infrastructure does not scale to CXM. And so for us, we really see this as an opportunity to look at the categories that exist and what some of the systems that enterprises are using to reimagine a category of customer experience management. What could it be? What should it be? And what would the impact to every company around the world be if we get this right?
And we believe this is pushing the enterprise to a brave new world where the customer truly is at the center and marketers, CIOs, every C level executive gets out of that systems integrator business that they've fallen into because they had to and they really using systems to help them move with greater velocity. And so for us, we believe this category is going to unlock more and potential opportunities for us to continue to grow the business in the years to come. So with customer experience management, as if I am a CIO, how do I need to think about this? What are the things that I need to do? Five things that we believe are going to be the key pillars of customer experience management.
Real time, open profile. This is harder, it's easy to say and it's exceptionally hard to do because your customer data right now is in 25 different data lakes across your organization, bringing that together and actually getting that data to speak the same language so you can match that up is incredibly difficult. 2, content velocity. I'm going to personalize one website to a 1000000 of my customers. How am I going to do that from a content cost standpoint?
If I have to create a 1,000,000 different images of the same image in order to drive that personalization that does not scale. How do you start to do that better and faster? Cross channel orchestration, as channels, email, the web, digital, you need to have context for what happened in every channel in order to provide the next experience. So for example, I am on a flight, I am delayed by 3 hours, I get there, my bag is lost. The marketing department sends me an email saying, hey, now is the time to plan your summer vacation with us.
Not the right time, cross channel orchestration in that example is broken. You have to have the context for what's happening at every different interaction. And intelligence, this is one that using unlocking artificial intelligence for these examples I think is incredibly important. And the ecosystem, no one company is going to be able to do customer experience management by itself. How do you really unlock what that value is?
And for us, as you think about what is Adobe's take on each of these, where does Adobe uniquely differentiate itself, it's really across these vectors. For us, we've got the leading customer analytics and data management platform in the industry today. You think about why do we have 100 of 1,000,000,000 of third party records coming into the Experience Cloud today because of data gravity. We have profiles that are living, breathing things that we're measuring across all those trillions of transactions. That's where that profile starts.
Content creation and asset management, we just have talked about that all morning. It is something that is so uniquely Adobe's DNA that we think that this is an opportunity for us to deliver. Next, cross channel orchestration. This is one that it can't just be a batch thing. If you have context for what I did yesterday, you're already a day behind.
It has to be real time and you need to be able to do that. Our leadership there unlocks opportunity. And then from an AI standpoint, Abe will talk about this, but we are not worried about predicting the weather or elections. We are worried about unlocking Adobe Sensei to drive the domains that we care about, creativity and experiences. It's something that Adobe can do that you think about 15,000,000,000 websites served every day.
Every time we are learning, we are becoming better and we can unlock that across the entire network of Adobe customers. And the ecosystem, we made an announcement a couple of weeks ago that I think really brings to light our aspirations around these 5 pillars. And it starts really with the ecosystem, but it was all around this open real time unified profile and that was the announcement with Microsoft and SAP around the Open Data Initiative. This was taking all of the enterprise data that sits across Microsoft systems, SAP systems and it's open. We hope other people come and join to create harmonization across your behavioral, operational and transactional data so that you can get that profile together and understand it and so you can start to take action on that in your business.
And it's one that it really is exceptionally exciting. You want to know what that is all about. You take the data that's in Dynamics 365, the data that's in the Adobe Experience platform, the data that's in SAP and we've created one data model. This is a taxonomy, a way of describing data and the customer language so that as data flows through this data model, it is organizing itself in a way that you don't that companies don't have to pay data engineers, highly paid data engineers to go and do that afterwards. And we believe that it's a big unlock and clearly Shantanu, Satya and Bill shared this from stage and I think the reaction from the broad ecosystem of customers across the 3 companies has been really exciting.
So that's a little bit on the open data initiative and this really comes together for us. This is how we've architected the Experience Cloud and the Experience Platform is this real time unified profile at the center. We have spent the last 3 years building this data platform with this idea in mind and to see it start to come to fruition with the open data initiative and with our customers is very exciting because it unlocks opportunities for us. Okay. So from a product standpoint, sitting on top of the Experience Cloud, this is today the Analytics Cloud, Advertising and Marketing Cloud is the most comprehensive integrated set of solutions in the market.
You saw the leadership quadrants earlier. And for us, this year has been about really integrating these things and driving intelligence and AI focused features. So a couple of things in Analytics Cloud. The features that we've announced this year around Sensei powered virtual analysts, where essentially the artificial intelligence agent becomes an analyst on your team and raises its hand when it sees anomalies in your business, things you should pay attention to. And attribution IQ, so you can start to answer that question of what is the impact of my marketing spend and all of my digital activities.
The analytics cloud today is an undisputed leader in this category and continues to extend its lead across insights and actionability. From an advertising cloud standpoint, it's been an exciting year as addressable television advertising has come in. And today, where we sit, just last Friday, we were called out as one of 3 leaders that in the advertising category, in cross channel advertising across display, search and video and we're the only leader there that actually can bridge you from paid media through experience and to other and actually let's even get into marketing in terms of what the engagement there really has been about. And this is where we are the leader who created the Marketing Cloud category and we continue to lead there and to extend our lead. And so for us, we were not done.
We saw an opportunity with the acquisition of Magento to take all of the power we have in content, personalization and insights and take that all the way through the transaction because commerce as a key adjacency for us the C level executives were asking is Brad, you personalize the entire website, you get them to the transaction, just help me complete it so that we can bring that all together. And Magento for us was a critical piece of the puzzle because it also was not single threaded, meaning it's not just about B2C physical goods. It's an opportunity to do B2C commerce across multiple channels, B2B Commerce across multiple channels and the rapid time to value that enterprises now demand. And for us, we really the way we articulate that is, we think that there is an opportunity to make every experience personal. You've heard us talk about this.
And now our opportunity is to make every moment shoppable. Back to the Adidas example, if you're there with AR and there's a buy now button that's basically sitting within that experience, that's what we mean by every moment is going to be shoppable. No matter where I am in the interaction, I should be able to buy right then and transact with you. And we've been busy over the last few months. Just last week at Magento Live in Barcelona, Spain, we announced some exciting integrations with the rest of the Experience Cloud with content management, content management to personalization with Adobe Analytics in Magento, so you can get better insights of what's happening with your commerce activities.
And with Adobe Sensei powered target features to drive more personalization. So we have been hard at work on these integrations since the close of the acquisition. And the go to market motion, I would say, is accelerating as customers really see the value of bringing these together. So we've been busy since the last time we were together. But as you know, we weren't quite done.
We announced just a few weeks ago, our intent to acquire Marketo. And we're not closed yet, so I can't talk as in-depth about what we're where we are with the acquisition and what we plan to do, but we hope to close soon. But the exciting thing for me is Marketo is an undisputed leader in B2B marketing automation, really created that category. Category creation is important to us. And the roster of over 5,000 customers that drive their business, drive their top line every day using Marketo was very, very compelling to us.
And you think about combining our content capabilities, personalization capabilities, analytical capabilities with Marketo's strong lead management, marketing automation and B2B attribution, we're excited to bring these companies together and what it's going to unlock for our combined customers, our joint customers today and new customers as we cross sell and drive new customer acquisition together. So from a growth driver standpoint, we really see many, many opportunities to continue to drive the compelling growth in one of the largest enterprise SaaS companies in the world. And those are across 3 areas. Go to market expansion, we have driven significant work in our customer segmentation and this is driven by Matt Thompson and his go to market team from how we engage with our strategic accounts, the biggest and most complex of our customers to our commercial accounts, more of the or our corporate accounts as I misspoke there, our corporate accounts is what we call them and that's really our new logo acquisition model. And then all the way to our territory and commercial accounts, the mid market part of our business.
This segmentation is driven by AI. We run propensity models against the entire world and we come up with who is actually has propensity to buy Adobe Target in Q1 of next year and how are we engaging with them. It informs our marketing activities. It informs our engagement activities across. So we're using a data driven approach to drive this growth lever from a customer segmentation standpoint.
Industries, we have invested deeply in product and marketing and go to market efforts around industries because a retailer, they want to engage with you in words and in context that a retailer understands. Don't come and tell me about 6 banks that you've worked with. I want to hear about retailers and by how you've driven $250,000,000 of incremental revenue opportunities. So we've invested deeply in our go to market efforts around industry. And international for us continues to be an opportunity and we see accelerated growth in international markets.
By far our fastest growing countries and regions are the international markets. And we continue to believe that as they catch up with what we've been doing in the Americas around digital transformation, today as I travel around the world, there isn't much gap between what companies in the U. S. Are doing and companies in Singapore are doing or companies in India are doing or companies in Japan are doing. And in fact, many of the emerging markets are moving faster because they are skipping the PC era 100% and are going straight to mobile and new engagement paradigms.
On products, we've talked about the customer experience management category, our vision about reimagining that and unlocking additional growth and B2B Commerce and the Experience platform. Just quickly on the Experience platform, you may have heard of customer data platforms or data management platforms. We think that today, as we are just in beta with the experience platform, that it will really unlock what is the additional TAM that Gloria talked about in attacking that customer data opportunity. And around ecosystem, you've talked about you've seen what we've been doing with some of our go to market partners and where we are there. So for us, we do think that the ecosystem will unlock in the future new monetization opportunities around marketplaces and a platform go to market motion that we look forward to continuing to innovate.
So the TAM, we talked you saw that from Gloria, $71,200,000,000 For me, the organic growth rate in this market is exciting. The market is growing, The opportunity is really there for us to continue. For us, as you think about the significant market momentum that we have in this business. The understanding that Adobe is a leader in digital experience. We've got the most comprehensive set of platform and solutions today informed by Adobe Sensei that brings intelligence where it's needed.
And then you combine that with that $71,200,000,000 market that's growing in double digits, we believe that it unlocks a compelling business opportunity and investment opportunity today and in the years going forward. Thank you.
Thank you, Brad. It's great to be here. Now that we have gotten all the growth time and numbers out of the way, let's get to the stuff you're really here for. Is all the deep tech stuff and geeking out a little bit, at least that's what Mike told me. But on a more serious note, as you heard from Shantanu, Gloria, Brad, Brian and Scott, they talked about a lot of the growth imperatives, the broad opportunity ahead of us.
I'm going to take next 10, 15 minutes to give you the other side of that lens. And as you heard Shantanu say, we are a deep product and technology company. And when you look at strategy, when we look at growth, when you look at opportunity, one of the lenses we always maintain focus on is what are the foundational investments in technologies and how are we investing for the future and how are we solving problems that nobody else is even attempting to solve. Before I do that, I thought I'll spend a couple of minutes just to give you a little bit of a landscape of what's changing in the technology landscape at large before we look at our own technology agenda. And lot of us as consumers are experiencing this and feeling this, but we are really in an extremely unique time right now where entire technology stack all the way from chips, chips that are in your device on a phone in your pocket to chips that are running in large data centers to all the way what's happening on the glass in experiences.
Every single thing is getting rewired and every single thing is going through a massive transformation. There are new devices. We talked a lot this morning about new modalities as the world goes beyond the screen and starts going towards things like voice. Voice can truly unlock how each of us actually engage with technology. Things like immersive where the world around us actually becomes a digital canvas where we are not limited just to the screen.
In a profound way over the next 10 years, computers are going to go from simply being number crunching machines to computers that actually understand. They can hear us, they can see us, they can understand the context. And once that paradigm shifts, the notion of building experiences for this future is going to be completely different than what it is today. 2nd, what's happening in the data centers over the last 10 years with public cloud infrastructure, 1,000,000,000 of dollars have gone into laying out a hyperscale compute fabric. Now somebody actually has to come up with breakthrough ways to unlock what you can do with this massive computing infrastructure at the data center.
And then the devices in our pockets at the same time are becoming extremely powerful. Literally, the phones that we carry now have supercomputer level computing that just 15, 20 years ago, nobody would have believed that each of us would carry a supercomputer in our pocket. And so when you look at both those two modalities, data center compute and edge devices that are getting smarter, The world is about to change in profound ways. And last but not the least, AI. Shantanu talked about how AI is a massive generational shift in computing.
We actually have a belief that is much more optimistic. Some of you, I know you track the industry, a lot of people talk about kind of a Terminator view of the future. We actually, which is kind of doom and gloom, machines taking over. We have a little bit more positive and optimistic view, more like a Harry Potter view of the future, where the world is actually going to become more magical and where digital and physical will enhance our lives in interesting ways. So translating that to our own technology strategy and vision, you heard obviously Shantanu and Gloria talk about this.
We have a very consistent and very compelling strategy at a macro level for the company, empowering individuals to create and transforming and how businesses transform themselves. So what's the technology agenda and vision that is underlying the strategy? It's actually quite simple. At its core, we are focused on 3 long term areas of focus. 1st, as we think about individuals and how they create content, we want to invest in breakthrough experiences.
And I'm going to talk a little bit about what I mean by that. Breakthrough experiences of today and breakthrough experiences of tomorrow. Underlying those experiences, we want to build deep foundational technology platforms. And when I say deep, I really mean deep. We'll get to that in a minute.
And then last but not the least, we think AI is going to represent absolutely the most profound shift in software over the next decade. So we are going to build intelligence in every single thing we do from experiences down to the platforms. So let's talk breakthrough experiences. As we look at our strategy across all three clouds, Creative Cloud, Document Cloud and Experience Cloud, what motivates and what is the basis we use to decide which experiences, modalities, what to invest in. First, as I said, we are literally going to go to a world beyond screens where experiences are no longer limited to glass in front of us.
Scott talked about multi surface and really how going to a cloud first world will completely change not just creative workflows, but entire lifecycle of content and delivery. AI, if done right, has the potential to truly democratize creativity and get to the entire world, not just the professionals who it is limited to today, but to every student, everyone who has a story to tell, we think we can drive that. So let's look at a little bit of the details of each of these areas, starting with breakthrough experiences for creativity. And obviously, we spent a lot of time this morning. Hopefully, you saw a lot of this in action and Scott did a really great job talking about the pillars of investment.
Want to give you a little bit of a flavor of deep technical problems we are solving in order to deliver on lot of the pillars that Scott covered. Imaging and video, this space is going through a radical, radical reimagination. There are probably going to be more cameras on the planet than there are people. If you just think about that for a second, as of last year, they were neck and neck. In 2019, there'll be more camera modules sold, whether it's your cameras in your pocket, whether cameras in your cars, cameras in your homes, we will have more photography and video enabled cameras now on the planet than there are human beings.
That opens up a completely new canvas for reimagination where the magic of these workloads shifts from differentiating in hardware and silicon because the cameras are frankly getting really good no matter which vendor, which technology platform. We are opening world towards computational photography where the magic is all going to be in what you can do in software. Voice, vision, immersive, we talked about this quite a bit this morning. We showed a little bit of early view of where we think the world is going to go with digital and physical blending with Project Aero. We actually think Adobe has a unique responsibility with our unique DNA of shaping the user experience language and language of design for the world, in effect, we not only have to be best in class with today's products,
we have
to set the language of design for the future. And as these new mediums become pervasive, we have to shape in effect the creative taste for the entire world. That's a responsibility we take very seriously. Collaboration at the core, Scott talked a lot about that. I want to give you one example of deep problems we are solving.
When we show that Photoshop and iPad this morning with hundreds of layers and a simple brush stroke or a new brush or flavor of something that got changed, What's going on behind the scenes is a deep computing problem we have solved where gigabytes of that PSD file move in real time with the right changes, the brushstrokes, fonts, colors. Shantanu talked about how in early days of Credit Suite, we made foundational investments. Guess what? We are doing that now in the cloud deeply specialized for our domain. So when somebody thinks about collaboration at the core, for us, it's collaboration that is deeply unique to our workflows and our applications.
We are not trying to move generic files and folders across machines. It's very unique to our businesses. And then last but not least, creative assistant. This is an area where we think AI done right. We can build an assistant that's voice enabled that can really guide users and make step function change in productivity.
Talking about documents, Brian did a great job covering this. I'm going to cover 2 specific areas that I'm excited about. This is a business where PDF is absolutely a global foundational platform. There are few pieces of software that are deployed and used globally at the scale that PDF and Acrobat is. We are not stopping there.
We are asking the question, if we can truly understand the meaning of what's in the PDF file and if we can truly use advances in computer vision, machine learning to unlock the true meaning of what user and authors intended to capture in that PDF, we can do a lot of interesting things with that file. And the 500,000,000 installs or more than 500,000,000,000 downloads of the mobile apps that Brian talked about, if we can make the workflow smarter for users where the PDF that they open is optimized for the mobile phone, Documents can be automatically summarized if you are rushing to a meeting. A 15 page document I can get a summary for me to quickly read. Or if I wanted more context, documents can be expanded with the use of AI. And so this is an area we are very excited about investing in.
Last but not the least, Brad just talked a lot about the imperative for the enterprise and how the entire enterprise experience is getting completely reimagined. The days of actually building systems and experiences for the enterprise that are batch oriented, automated only for reporting back office reports once a week or once a month are gone. In many ways, we are still stuck with green screen era of experiences for the enterprise. Yes, it has moved to the web and people call it SaaS, but nobody has radically reimagined with customer at the center, an experience that is worthy of calling it an experience that Adobe has brought to market. So we think this area between hyper personalization, building experiences that are action oriented, not transaction oriented is a massive, massive opportunity for us to go innovate on.
So as we think about all these breakthrough experiences, the second leg of the strategy is to then go invest literally for years into foundational platforms that are extremely hard to engineer. But if we get them right, they will last us decades. And so we have been busy across all three clouds and engineering teams in architecting a core of the next generation platform that will power the entire business ecosystem from Creative Cloud to Document Cloud to Experience Cloud. And the challenges we think about before I go into the specifics of the platform, if you know our history going to the PC era, we were always a company that excelled at delivering best in class software on dominant platforms of the time, Windows and Mac. Fast forward to the mobile era, we were always a company that excelled at delivering innovation on all the mobile platforms where our customers were.
Guess what? There is a new reality emerging in the cloud where there are multiple large platforms emerging and somebody has to step up and say, we will actually build a multi cloud enabled platform for the enterprise that's going to bring all of your data and content assets at scale together. And obviously, the other side effect of that is it can truly unlock the cross cloud workflows because we have all these shared technologies. So let's look at the platform. Shantanu did a quick overview of the platform we have been building.
This is one of those things and I know somebody is going to time me, so I'm going to try and stay quick on this slide. We have a bet right now on how much time I spend on this, but these 10 seconds don't count. But this is one I really do actually want to geek out a little bit and bear with me because this is one where we get super excited not just for the opportunity in market, but the problems that the teams have solved are so hard and so meaningful for our customers in terms of the value that they can derive that we think this will last us absolutely multiple decades. Starts with content and data at its core. And when we say that, the notion if you look at enterprise systems of the past, they were all built around databases with transactions, number crunching.
This is very different. It starts with real time behavioral data at scales that are unimaginable. Brad talked about trillions and trillions of behavioral data coming from millions of websites that we have deployed for our customers, what Adobe Analytics has instrumented for behavioral journeys, all of that data at scale is coming through into this platform. On the other side, content, 100 of millions of some of the best professionally produced content. And in fact, the workflows people use to create that content all the way from Photoshop or Lightroom or Premiere, all of those interactions are at the heart of this platform.
Surrounding that and Brad talked about this, the semantic model, what we announced with ODI, kind of the open data initiative is we truly understand the entire customer journey. And so we are using that to build purpose tailored AI models. And I'll talk a little bit about that in specific domains. There are domains we focus on and Brad said it really well, there's a lot of hype and noise around AI. 2 years ago, I was in front of all of you where we announced Sensei.
We are not building a general purpose AI that can cure cancer or drive cars or predict weather. We have a very narrow and very deep focus on our AI strategy. It's focused on 3 specific things: breakthroughs with AI for creativity breakthroughs with AI for content intelligence and the document space and using AI to dramatically drive breakthroughs in experience delivery. Now of course, as we build that platform, it truly unlocks the entire lifecycle from plan, create, manage, deliver. And this is the real unlock of the 3 clouds coming together with this shared core.
Everything from what you open that Photoshop Canvas to how we deliver that content using Adobe Experience Manager, to how we instrument that using Adobe Analytics and all the way back. If we get the right foundational architecture, which we believe we have over the last few years, we have been working on it, this is going to be game changer in the enterprise. At the same time, and Shantanu alluded to this, we recognize that we can't do this alone. And so as we build our own solutions, we also equally want to focus on a completely new and equally large opportunity of opening this platform for 3rd parties. And so even as we unlock the value for ourselves in our solutions, we actually think there is an equally massive opportunity to open this platform to a broad range of ecosystem partners, developers, SIs, ISVs who can innovate.
And so with Adobe IO and the Sensei framework, we are opening this up for the entire world. So let's talk a little bit about Sensei. This is an area that I'm personally extremely excited about and it's one where our teams have been absolutely stellar in innovating in unique ways that are very, very Adobe like in bringing breakthrough technologies, but then making them surface to the user where it just feels magical and invisible, where we are not putting algorithms in front of the user, we are just plain sight hiding it, just magical moments that you experience in the apps. And just as a refresher, Sensei is really focused on 3 domains: creativity, how do we radically improve productivity of our creative tools documents and content intelligence and then how do we actually bring AI to the science of data and measurement to the enterprise. Rather than talk about this, this is one of those areas where seeing
it actually is always better. And over the last couple of
years, we have shipped I I would like to run a video showing you some of the magic of Sensei in our apps. Let's roll the video. I don't know what's more impressive, the cool sensory magic or the amazing job Ads team does in showing of all this work. It's really cool. So just to kind of wrap this up, technology industry and software business at large is a very, very ruthless business that it does not recognize yesterday's successes.
You cannot just build a product once and just stay on it. You have to constantly reinvent yourself for the future. There are very few products in the entire market that 2 decades, 3 decades later in some cases are still not only around, but they are category defining. Look at Acrobat, look at Photoshop, look at Illustrator. This is a company that has invested decades ahead in lot of cases.
And that is what we are doing. We are investing in deep, deep technologies. We are looking hard at what's the next breakthrough around experiences, what's around the corner. And we are absolutely energized when there are massive technology challenges like AI and how it can transform not just our business, but entire customer and market ecosystem. So as Gloria said it well, I have been never more energized about actually being here.
2 years ago when I talked to you, was talking about my passion. Today, I'm probably even more energized about where we are going and the potential of the breakthroughs we can drive in the marketplace. With that, let me get to the least interesting part of the
meeting and hand it to John. I agree.
I need cooler slides. Thanks, Abe. Between the keynotes this morning and the business overview and the technology overview we've had here at this meeting, there's clearly tremendous opportunities ahead for Adobe. Now I'll give you a view of our business momentum and how we see growth going forward. And then I'll share our preliminary 2019 targets and then we'll take your questions.
So as I came into the role, my focus has been to continue to grow our top line, but also to have a really keen focus on our bottom line as well through disciplined execution and strategic investments in our core and thoughtful consideration for our inorganic opportunities, all the while while driving operational scale. If that sounds familiar, it should. It's been Adobe's strategy for many years and is clearly a winning approach. I realigned my team to drive continued business performance with dedicated business unit CFOs, partnering with our business leaders to deliver insights and financial stewardship and continue momentum to invest effectively and operate in a scaled and agile way. And as Brian mentioned, our data driven operating model is one example of that and how we deal with go to market and customer engagement.
And it's investments in our infrastructure like that that we'll continue to do to encourage our teams to really focus on execution. I'm excited to reaffirm our Q4 P and L targets. This is inclusive of Magento. We expect to achieve revenue of $2,420,000,000 in Q4 with GAAP EPS of about 1.42 dollars and non GAAP EPS of about $1.87 Our ability to reiterate our P and L guidance mid quarter is a testament to the predictable subscription and recurring subscription business and recurring revenue model. We're assuming that we close Marketo later this quarter, so we'll update you in about 8 weeks at our Q4 earnings call.
And at that point, we'll have a little bit more information once we close. We're still waiting the regulatory approval as we mentioned before. Now I'll cover a few housekeeping items and we're at a creative conference with innovation in many, many products and now we'll take care of innovation in accounting standards. So ASC 606, the new revenue accounting standard becomes effective for us on December 1, which is the beginning of our fiscal 2019. We'll update our targets at our earnings call on December 13 with new FY 2019 targets.
And then our first reporting under the 606 standard will be in our after Q1 and on March 14. So under 606, the Adobe cloud offerings will be recognized ratably and on premise license revenue will be recognized upfront. Certain costs that are expensed today will be capitalized such as sales commissions and they'll be amortized over time depending on a number of factors including customer life. In terms of impact, our annual consolidated revenue and expense will largely remain unchanged and the one time impact to retained earnings from deferred and unbilled revenue will be immaterial. In terms of new disclosures, we're going to be having a change in how we talk about unbilled and deferred.
It's going to be called remaining performance obligations. Here we go. Thank you. So before under 605, we talked about unbilled and deferred. Going forward under 606, we'll be talking about remaining performance obligation, which is remaining committed and allocated revenue that's billed and unbilled.
And we'll be talking about it in a current and non current basis. We'll also be talking about unbilled receivables, and those are receivables recognized when revenue exceeds our billings on a contractual basis. Now let's move forward on tax. This has been quite a year with tax. And when we ended our FY 'seventeen, we ended up with GAAP tax rates of 22% and non GAAP tax rates of 21%.
Tax reform occurred in December of 2017, but we had already begun our fiscal 2018. So for us, the impacts of tax reform didn't impact us fully in our FY 2018 and will impact us fully in FY 2019. So in Q1, we ended up lowering our rates to 17% on a GAAP basis and 11% on a non GAAP basis. And further, as we move forward and we evaluated the provisions of tax reform, in Q2, we ended up with the ability to review our trading structure and make a change. And that change effectively allowed us to deduct more R and D expense in the United States, further lowering our rates for the rest of the year, as you can see here.
So in FY 2019, once the international provisions of tax reform take full effect for us, we expect our tax rates to rise to about 11% on a GAAP and a non GAAP basis, And that's lower than the 14% we had previously estimated for you. So now that we have the housekeeping out of the way, let me tell you why I'm excited about the business and feel very honored to be the CFO of this great business. We're going to look at total Adobe here. This is total Adobe's revenue over a period of time from FY 'fifteen to FY 'eighteen and also at GAAP operating margin. And as you can see, we've continued to sustain a revenue growth of greater than 20%, along with margin expansion on a GAAP and a non GAAP basis.
You can see over this period presented the phenomenal growth in revenue with expanded operating margins are now within an even broader portfolio business, and that's a testament to this model. As I opened, we talked about the importance of investing for growth on the top line. And when we drive our top line, the leverage in our model grows our bottom line and our margins over time. The growth of 20% for years has enabled us to have the ability to expand the dollars that are available for investing. We're making great decisions for the long term while focusing critically on disciplined operating modes and business performance during the year so that we can achieve top line and bottom line performance that we desire.
Incorporating these targets into the full year FY '18, we will continue to grow revenue at greater than 20% and our non GAAP operating margins grow at almost 60%. Now I'd like to move on and talk a little bit more about our cloud offerings. This is a great slide. It talks about the incredible business we've built with Creative Cloud. It's an incredible healthy business.
It's more predictable now with about 97% of subscription business and recurring revenue. We're growing revenue at over $1,000,000,000 as Brian had mentioned earlier, and we have been adding more than $1,000,000,000 of recurring revenue annually. There continues to be a small piece of the business that's non recurring and it's mostly comprised of revenue from stock on demand and some perpetual with elements in some of our hobbyist products. Moving to Doc Cloud, we've taken a different approach. We're feathering subscriptions over time, as Brian mentioned, and that's attracting new user growth.
While we keep the revenue stable for this period of time, it was for a few years about $800,000,000 and now you see the stacking effect of revenue over time and we're on our way to about $1,000,000,000 in revenue for dot cloud this year. There's still a pretty sizable portion of perpetual left that we can look at as a sizable opportunity to continue to migrate to subscriptions. The reinvigoration of the oh, sorry. That's good. We'll go forward.
Mostly that's driven from the reinvigoration of PDFs and the focus that we've had in PDFs and the innovations that Brian had talked about earlier. So we're attracting more users to dot cloud with 20 percent 5 consecutive quarters of 20% unit growth and revenue growth. For Experience Cloud, we've grown the business from $2,000,000,000 in FY 'seventeen to what we expect to be $2,400,000,000 in 2018. Like Creative Cloud, we focus on driving subscription revenue, the best measure of health for the business. It's recurring and it's sticky.
Subscription revenue now includes all of Magento revenue other than the professional services. Perpetual continues to transition and services and support will grow at a slower rate. That's intentional. It's a less profitable business, but services are necessary in the enterprise business. And so we leverage our own delivery capabilities along with those of our partners.
As I mentioned, we're laser focused on growing the subscription portion of this business. And from 2017 to 2018, we'll be growing our subscription portion of the business from about 75% of revenue to almost 80% of revenue. This success in our subscription growth has manifested itself in strong growth in unbilled and deferred revenue. It's a clear predictor of how our revenue is going to look in the future. It's business that we already own.
And so now we'll flow through our financials as contracts amortize over time. So let's talk cash flow. This is probably my most creative slide that I have and one that I'm very proud of as CFO and probably something that you all like to see, which is the accelerated momentum in operating cash flow. This is indicative of leverage in our model, enables us to grow top line and grow earnings and operating cash flow as disciplined financial stewards. We anticipate having a very strong Q4 as I mentioned and the strong operating cash flow affords us the flexibility to invest in our business and return cash to shareholders through our share repurchase program.
As of fiscal Q3, we maintained a strong liquidity position. We had $4,900,000,000 in cash and short term securities. We had $1,000,000,000 in unutilized credit facility. And we've been taking a conservative approach towards leverage. We have $1,900,000,000 in public debt outstanding that's highly rated by both S and P and Moody's.
And we have significant debt capacity remaining that's available to us to augment our long term growth strategy. As I said, excess cash has returned to shareholders through our share repurchase program. And as a reminder, in May, our Board approved a new $8,000,000,000 share repurchase authority through 2021 funded by future cash flows. This program has been very successful for our shareholders. We've returned $4,500,000,000 between 2013 2017.
And we're on track in FY 2018 to return over $2,000,000,000 When I think about M and A, I think a company like ours of this size and scale in this business, we've been very deliberate and thoughtful. It's and how we look at M and A as just one avenue of growth for the long term. We're in a great position and we've made some exciting announcements with Magento and Marketo and now we're keenly focused on making sure that we get value out of these businesses. When we pursue an investment, we start with a strategic fit. We've got to make sure there's value there for our customers.
And we also focus on cultural fit to make sure that we can integrate the business successfully. And of course, it's got to make financial sense for both us and for our investors. That strategy has served us well over the years and has really been proof of our track record in terms of success with M and A. As for Magento, it's clearly a natural extension for us. It's a market leading commerce platform, expands our market opportunity and builds out our product portfolio.
We closed the deal in June for about $1,680,000,000 that we funded through our existing cash position. The business has been operating very strongly. It's attributed $27,000,000 to in revenue to us in Q3, and it's expected to contribute slightly more than $30,000,000 in Q4. It expands our 2020 digital experience TAM by $6,000,000,000 Some of it overlaps with our existing TAM, but it actually makes our TAM much more addressable. Likewise, Marketo widens Adobe's lead in customer experience management across B2C and B2B.
It's a leading B2B marketing engagement platform and is expected to accelerate our digital experience growth in an expanded addressable market and unlock some of our existing TAM. The business has great momentum with large deals and we're excited to integrate the offering with Experience Cloud. We announced the deal a few weeks ago on September 20, we expect it to close, as I said, this quarter. The $4,750,000,000 acquisition cost will be funded through existing cash position as well as new borrowing, and we'll provide more financial color after the close. Now let's look at what these businesses and the new growth opportunities that you heard about today are going to be doing for the Digital Experience business going forward.
We're super excited about Digital Experience as Brad had mentioned and as you heard from many of us today in terms of what the overall opportunity is for Adobe. Our customers are looking to Adobe to help transform their businesses to become experienced businesses. We're creating platforms that will power every enterprise's digital experience. Now with an expanded commerce and B2B capabilities, we're delivering most the most integrated and comprehensive set of offerings to our customers. Speeding the growth opportunity in the long term, and as Brad mentioned, our Experience Cloud has a 2021 TAM of approximately $71,000,000,000 and we're executing against this opportunity.
We're confident with the that this business will continue to grow over the long term at a pace that's consistent with this opportunity. And being here at Max, you can see we've invested in our products and services to create new growth drivers for Digital Media beyond the migration of the Creative Suite base. In particular, new users, more people are creating than ever before as we heard today, from students and YouTube stars to people like you and me. And we're expanding to new geos. We're leveraging mobile apps as an on ramp for new users and we're our focused market expansion with new web services and consumer offerings are targeting larger markets with products like XD, Rush, Spark and more.
And we have new services like Stock and Sign, and we're relentlessly focused on retention and upsell. All that gives us confidence that we can continue the trajectory of net new AR growth each year to continue driving revenue growth for Digital Media. And our updated TAM for Digital Media is about $37,000,000,000 in 2021. So now I'll move on to our 2019 preliminary targets. Everything I've just talked about is one of the reasons why we're excited about 2019 and beyond.
Our intention here is to provide you with preliminary targets, which show sustained revenue momentum, excluding Marketo. We expect 20% revenue growth across our businesses and strong net new AR of $1,400,000,000 for Digital Media and accelerated subscription bookings growth and digital experience of about 25%, which includes Magento but excludes Marketo. With 20% revenue growth, we would have targeted EPS growth to exceed revenue consistent with prior years, assuming a constant tax rate. Anticipating Marketo, we expect revenue growth to accelerate of course. In the short term, we expect EPS to lag revenue growth somewhat in 2019, given the deal and financing costs as well as the deferred revenue haircut that we'll be working through after close.
So to wrap up, Adobe's business momentum is strong. We're continuing to be a market leader. We're delivering growth in margin at scale. The leverage in our model is driving record margins, profit and cash flow, and we have a large and expanding opportunity. We're a $9,000,000,000 revenue software company delivering top and bottom line growth, P and L predictability and a proven track record of executing coupled with financial discipline.
And we're investing for growth for the long term given the wide opportunities that we talked about today. So with that, I'm excited to take your questions after Mike wraps up here with some instructions.
So we're going to take just a minute to set up the chairs for Q and A. So just pause for a minute, stretch whatever you need to do. We'll be back in just a minute. To go. So there are going to be some people with mics, if you raise your hand.
So raise your hand. Mike, we brought to you. Please give your name and firm so that always is helpful. Please, one question per person. We'll try to answer as many questions as we can.
Thank you. First question up here.
Hey, guys. Alex Zukin from Piper Jaffray. Thanks for taking the time and laying out the growth prospects for the business. I guess one question that pops out for me, if I think about your TAMs, your TAM for digital marketing has nearly doubled your TAM for Creative Cloud. The growth rates on both businesses are very similar.
So how should we think about that as an opportunity? Because I think a lot of people in the audience are very positively inclined around the guidance for Digital Media ARR for next year. But at the same time, it almost feels like with the acquisitions you're making, you mentioned accelerating growth on subscription. Is that something that we can continue to see or how do we think about that because usually larger TAMs has more growth. So curious kind
of how you think about that?
Yes, I think big picture, Alex, I mean, we're, as we said, excited about both businesses. I mean, you have to think about the current situation in both. As it relates to Digital Media, Brian clearly showed that we expect to continue to see 20% revenue growth. We said $1,400,000,000 in ARR. And if you take a step back and think about it since the transition has happened to the Creative Cloud from the Creative Speed and all the stuff that we showed, it just shows very significant momentum.
So I think continuing to drive new customer acquisition, trying to continue to drive new offerings is how we think about digital media across both PDF and the Document Cloud as well as on the Creative Cloud. You're right in the digital experience, the TAM is certainly larger. As you recall in 2018, one of the things we said was revenue growth was going to be about 15% of the subscription revenue part and the subscription bookings part was going to be grower. We were getting through the perpetual transition. We were getting through more of a focus on bookings as opposed to a focus on services.
I think even without the Marketo acquisition that's why we said that we expect to see both revenue accelerate to the 20% as well as bookings, subscription bookings and digital marketing to exceed to 25%. I know one of the things that people ask us is, are you giving multiyear term, multiyear sort of growth rates? And I think that's part of where you're going. I mean, we just continue to be really excited by the opportunity in both. And I think you're seeing that excitement reflected in our 2019 numbers.
The addition of Marketo will certainly accelerate that revenue growth as you can expect. We think that's appropriate given the opportunity that exists given our leadership and digital experience and being able to define ourselves as a category. And if you look at the available TAM, as long as we continue to execute, the business should continue to grow from a bookings and a revenue perspective. But we're excited about both. I mean, as I said when I started off, it's a good problem to have having 2 growth imperatives as opposed to 1.
They're clearly different profiles. So I think we've done a good job of managing both of those profiles. In digital experience, it's a lot more of let's make sure that we get the adoption, the land and expand strategy that Brad talked about. And so we'll continue to give updates. I think on December 13th when Marketo is done that was the intent with giving both at this point revenue, but at that point we'll give you both revenue as well as earnings as you can imagine.
Thanks for the time. It's Kirk Materne with Evercore ISI. I had a question about the Digital Media business. Clearly, a lot of new product out this morning. You guys put out a net new ARR number that I think is very positive when you look ahead to next year.
I think you made a really good case about why there's so many new users coming into this category and what you guys are trying to do to expand that. Can you just talk maybe qualitatively about how you're thinking about pricing elasticity and the monetization of some of these new features as we go out over the next few years? I think we all understand sort of the user growth potential, but pricing and monetization is something that I know you don't want to talk about maybe explicitly, but just sort of how you're thinking about it? Thanks.
Well, I think we've done 2 things. I mean, I'll certainly jump in, which is, as you know, when foreign exchange has changed, we have looked at as a result of any foreign exchange movements across the U. S. Dollar and foreign currencies, we've certainly tweaked it. And in North America, there was a fair amount of scrutiny last year as it related to when at MAX last year we had all of the new products that we announced, we had a slight price increase.
Big picture, when we take a step back and we still think about it, we really focus a lot more on acquiring customers to the platform than it is right now looking at price sensitivity. I think part of the reason why Brian and John went into the details associated with the DDoS was to show you that the amount of rigor, the amount of understanding and trying to again focus on visitor I mean customer acquisition is the right thing. We know what it takes when we run a promotion, when we bring people to the platform, if they're on an individual application, how we can move them to an entire suite. I think most of you would recognize that with the Creative Pro, the ability for us to potentially have higher prices associated with that given the mission critical nature of what we do exists. But at this point, we just continue to think getting all of these different platforms right, getting the mobile offering right, getting the multi surface right, that's really where the opportunity is right now.
And you don't want anything to impact the brand associated with it. I mean, some of you were concerned when we introduced pricing, hey, are you introducing pricing because the sort of growth is slowing? Others were like, why aren't you introducing pricing every 6 months because of the opportunity to exist? But we're balancing all of that. And if you look at what we are doing in different geographies, everything has so much math behind it and so much insight behind it.
So that's sort of how we think about the business.
Yes. I would just add that we while it's not all visible, we are pricing per segment as it stands right now. I mean, Gloria threw out the number $9.99 to $10,000,000,000 deals on Brad's side of the business. The reality is we actually do a couple of dollar deals coming out of Acrobat Reader for what I call bite sized subscriptions. And so you see a fair amount of price differentiation across across segments.
We're definitely differentiating between ongoing subscribers and transactional business on Adobe Stock. We differentiate between the team value that we deliver versus enterprise, etcetera. So there's a fair amount of price differentiation. I think the world of mobile will take us down a path where we'll see more regional differentiation than we've potentially seen in the past because we understand the propensity to purchase and the elasticity that exists in those. And we don't talk a lot about it, but we do a fair amount of testing to actually get to those price points.
And so, I think philosophically, we are to align with Chanten, we are very much in an acquisition phase, particularly as you look beyond the Pro segments. And but we're very focused on pricing to value and to the value that we deliver and really keeping it in line with the propensity to purchase in the segment.
Next question over here.
Thanks. It's Brent Thill with Jefferies. Brian, I was kind of shocked at the number one growth driver migration at subscription. I think many of us, they've covered you for a while, thought the CS6 base had upgraded already. So can you just give us a sense of what percent you think is left to migrate to subs off the old model?
And I have a question for Brad, but Mike won't let me
Yes, I don't I didn't mean to imply the number one growth driver is migration. That may have been the number one bullet that I covered. So that's an important distinction. I think that there's ample opportunity in certain on a market by market basis for migration that exists. There's more opportunity for migration on Document Cloud as a percentage of the total book of business there.
But I think we're equally intent on bringing those pros into the fold through services. But make no mistake, if we're already at 40% 45%, respectively, on the 2 businesses of new users that we're acquiring, we fully expect that those numbers will get into continue to expand by 5, 10 percentage points. And so we're very focused on new customer acquisition at the same time that we're migrating the base.
And just to be clear, those weren't stacked right in the on the slides.
Thanks guys. Congratulations on a spectacular MAX. Shantanu, I had a question for you. Given guidance for fiscal 2019, which sounds quite optimistic, I'm wondering with all the headwinds that people are worried about, not Adobe specific economy wise, tax rate benefits going away, etcetera, What gives you the confidence? You're one of the first software companies to give constructive guidance on 2019.
And secondly, could Adobe be due to video what you did for Creative on the photography side? Because clearly, Abhay talked about more video cameras than humans. So 5, 6 years out, could video be the next photography and what are you doing to re pivot the business if that's the case? Thank you.
Sure. I mean, I think what gives us overall confidence in the business is again just the tailwinds that we see associated with digital and what's happening. And I will touch on a little bit of as you think about 2018 versus 2019, what you should think about and factor into your models. But it's just the amount of innovation that we're delivering and the amount of customer demand that's coming for the kinds of things that we're delivering. The velocity at which content is being changed, the digital transformation imperative and agenda, even if the economy goes through hiccups, it feels like the fundamental demand for the kinds of services that we do will continue to be top of mind because we're driving both top line and bottom line benefits for our particular customers.
As you think about it sequentially year over year, I think we were very thoughtful about what we were trying to give you, which was targets on the revenue because of the materiality of Marketo that we were not going to be able to give you good EPS until Marketo closed. But you're right, I mean thinking about it both from 2019 over 2018, there certainly is a little bit of a currency headwind. So when you think about ARR and what happens to ARR in 2019 versus 2018 versus 2017, there's probably a little bit more headwind associated with currency. And then the other thing I think you should start to factor into your models is as you think about what happens with the tax rate, the blended tax rate for fiscal 2018 is something like between 5% 6%. I think we've targeted 11%.
So think about it as if you look at $1.87 of EPS that we said for Q4 that think gets you to something like $6.80 or something for that for fiscal 2018. There will be a tax headwind as well associated with just going from the 5% to the 11% maybe to the tune of $0.50 But if you put all of that aside, the fundamental 20% revenue growth driver and the fundamental EPS drivers still remain intact. That's how we sort of think about the business. Video is just one of those different categories that we think is going to be one of those tailwinds because the amount of video consumed. I mean, just I think there's a staggering statistic of how much video is uploaded every day to YouTube, right?
I mean, 400 hours per hour or something like that. And the number of people who are creating channels and creating their own business, if we can do for video and it's not just video, video animation interactivity. And that's why I think the strategy of expansion of customer segments is I think so important to us and the ability to do that with mobile and AI. So we are pretty excited. We're not I think Scott said XD is going to be bigger than Photoshop.
If you guys want us to tell every product is going to be bigger than Photoshop. It's but we're well on our way to being and video is not just at the rush, it's also very much And just look at the amount of work that's going into doing animation and interactivity and high end video. And we're absolutely the company driving the most innovation. So every one of these adds to the belief that Creative Cloud is absolutely the de facto creative platform for everybody.
Jefferies, Howard Griffin. An operational question, as the scope of your portfolio has evolved and broadened over the years and your platform now as well, How have you had to evolve your R and D management? Or how do you foresee still having to do more in that respect, particularly given acquisitions, but not only because of acquisitions. You've already undergone the change in the last few years of accelerating your product updating to meet the needs of a subscription flywheel. But beyond that, what more do you think you need to do for everything that Brian is doing, Brad is doing and so forth to support the growth drivers.
Maybe I'd mention a couple of things Jay, just big picture as we think about it. I think the success that we got through Creative Suite, going back to Creative Suite was just making sure that we understood the distinction between what are the core product teams and how we can drive innovation in the core product teams and what's the core platform team and what can we do to ensure that we share technology in the most appropriate way by having this core technology. And overall, what's a great product lifecycle process that allows us to understand how we make investments across both of those. We've transformed both of those in this new cloud era to say how do we continue to. I mean Scott's teams and Brad's teams really driving what we can do for practitioners and across the product.
That focus continues. We now have a services lifecycle because the services lifecycle is very different from the traditional product lifecycle in terms the agility and the speed at which we need to do it. I mean, I'll give you just one insight of that. I mean, the way we deliver all products to the cloud right now, everything is actually available on the cloud months before we release it and then through feature flags, it's turned on depending on the feedback that we get. And so we've completely optimized in Abhay's group, the Cloud Platform Group, which is the successor to the core technology.
And so I feel really good about what we do in terms of the core teams that are closer to the customer that understand what practitioners need, the centralized teams which are saying are we constantly looking at ways in which we leverage the technology so that the benefit to the customer is a platform benefit as opposed to the product benefit and process by which we understand at any point how are we doing with respect to making sure that customers who always expect our stuff to be always on are doing stuff. And the last thing maybe I'd mention is AI and a machine learning team that's always looking at what are the models that we're making. I mean, we didn't show it today, but if you go and look at Adobe's stock and look at some of the AI and ML that we've done associated with search, it's absolutely staggering and mind blowing. And so that team is constantly thinking about if data is our new if data is the new oil, what are we doing to make sure we're capturing as much data and as much models as we can. So that's probably as much as I'll spend because I could probably spend hours on this topic.
Abhay and I probably both agree on how critical product is. But that's sort of a little bit of how we think about it. And Brad's doing exactly the same. I mean, what he's done with his data platform and having that data platform available to data scientists, what's it, analytics workbench, maybe you can touch on that?
Yes. I was going to kind of chime in there. I think that Shantanu kind of laid out organizationally some of the things that we've done. What I would say is within each R and D organization, we've completely changed the framework and I would say the engineering mindset over the last 3 to 4 years. Going to much more to modern engineering approaches with unified engineering to where the engineers themselves are not just responsible for building code and throwing it over the wall from an operational standpoint, but actually being on the hook for not only making sure the code is there and it's good quality, but they actually have to operate the code as well.
And that is really a cloud native development model and as we've gone to scale public cloud and cloud in our own data centers, that's been, I would say, an engineering practice that's number 1 we've changed is around kind of modern engineering practices. The second thing is we've invested deeply in, I would say, I don't want to say re skilling, but it's training our engineering teams to make sure they're current on methodologies, frameworks, even on Adobe Sensei with machine learning. Yes, we have a fundamental or a core data science team, We want all of our engineers to be able to unlock the capabilities of artificial intelligence in their work. So we've invested deeply in basically a Pan Adobe training and learning initiative that I think is starting to help unlock some additional innovation capabilities as well.
Hi, it's Jen Lowe from UBS. I had
a question, I think
it's probably for Brian. As you think about some of these new user groups that you're attacking within the creative business, both in emerging markets and then with new offerings like Rush. How do you think about the right level of investment to put behind those products as they come to market, especially in cases like Rush, where the audience may be a little outside of the traditional user base for Adobe products?
Sure. That's a great question. And I think of the investment a couple of ways. Number 1 is Creative Cloud in and of itself is an engine to drive awareness and to drive engagement. And that's a machine that I think I did a fairly thorough job of articulating how we run that.
But when you think about some of the new segments that we're targeting, there is more up funnel and less that we need to make to actually create the product level awareness and to engage and get customers in the top of the funnel, both through paid and methods. We're putting an increased emphasis on partnership to actually drive acquisition of customers in those domains. And so we talked a bit about the Samsung partnership. You can imagine moving from Adobe Scan and the Document Cloud partnership we have to include video, both handset manufacturers and operators are very interested in video because of the demand that it drives for their systems, etcetera. So we'll look more kind of strongly to partnerships and then leverage what we have, where we have a funnel that is a compatible funnel to acquire those customers, but then invest further up funnel to make sure that we're driving the level of awareness we need, similar to what we've done with Adobe Stock as we brought that into
the family. We'll do 2
more questions. We ran a little long and then we'll have some time afterwards to chat.
Thank you. It's Keith Bachman from Bank of Montreal. I wanted to follow-up on that question. As we think about mentioned that EPS was going to grow a little bit slower next year, but I wanted to step above that line in just terms of the financial leverage in the model. As you're getting into new markets and trying to increase your attach rates, what are some things that we should be thinking about as we think about our operating margins and operating dollars for next year?
How is mix going to change or not change the financial leverage that you've exhibited for the last couple of years? Thank you.
I'll start and John then feel free to chime in. I mean, I think big picture we just continue to focus on both top line and bottom line. And so while today was really a little bit more about outlining the growth opportunities, when you think about the 2 businesses, I mean the Digital Media business, we continue to focus on as we get to know these customers. How can we be more efficient in driving that? And even to the question that Jen asked, we get these 100 of millions of people who are coming and getting access to all of the other products.
Even targeting those customers is something that we know because we know what products they're coming for. And so I think on the digital media business just continuing to drive top line growth, but continuing to focus on how we can make that more efficient is absolutely part of the scenario. So on the digital experience side, we've had 2 large acquisitions. I think now is the time to really focus and get the value out of those acquisitions. So I think you'll see in 2019, our emphasis will be on getting the same kind of success with Magento and Marketo that we've done in the past.
And so those businesses I think we've shared a little bit of what their profile was. I think you can go out and look at the market or business. I think the last time they reported was in 2017, I think the full year. And we'll give you a little bit more insight. But I think nothing changes from our high level perspective of we're driving top line growth.
We're continuing to see focus on how we can continue to improve the OpEx and the margin associated with it. I think 2019 is going to be a little different year as a result of the materiality of Marketo and the fact that we will have financing costs and deferred revenue is going to change what revenue gets reported on the balance sheet. So module but apart from that nothing's really changed in how I look at it.
Yes. No, I would agree with that. I think the fundamental way in which we operate the company is to make sure that we are growing the top line and that leverage we focus on very much so that we continue to operate it efficiently and effectively as Shamsa was saying. I think the D DATON model for digital media is a good example of that. That level of insight that we have provides us a much better way to get return on the investment that we put into acquiring customers and to retain customers and engage with them.
And then on the digital experience side of the business as Shantanu said with the addition of 2 new businesses and the investments that we're making on platform, we're going to be driving margin expansion over the long term for this business. I think that's the most important thing to think about is we're looking at that longer term performance. And so while we've got these 2 large deals that we've done this year, they might have some short term impact, but it doesn't change our view for the long term.
One last question and then Shatner has some closing comments.
That would
be a good one, Saket, as you have the high.
Boy. Sakakalei, Barclays. My question is on Marketo, kind of picking up on the last topic. Understanding that it hasn't closed yet,
can you just talk about how
the business has changed qualitatively since the business was taken private?
Why don't you do that and then I'll wrap up?
Great. Yes, I think the Marketo business since the time that it was taken private, I think has changed dramatically. And I would say the team there really focused in a couple of different areas. 1, Marketo has established in the category of marketing automation, lead management and as their business grew, they had the leading platform that had extremely high NPS scores was really the product itself has been recognized as a leader for a long time. And what I would say is the team came in and focused very dramatically on continuing to scale that product so that it could serve the needs of both the mid market customer and all the way to the largest enterprise.
And I would say the big transition that that team has driven is to scale the product and also to scale the go to market to address the enterprise go to market motion. And that's really where we started to see them show up in accounts that we hadn't historically seen Marketo. We started to work with them and to drive that top line revenue for some of those accounts. And we're excited to tell you more as we integrate that. But those are, I would say a couple of the different areas that the team had done a really nice job in executing over the past couple of years.
We particularly appreciate those of you who took the time to come visit us at MAX and experience I think what our customers go through. To me, really interesting moment this morning when Scott's keynote was going on was when Terry White, who's been at the company for many years, said, I'm just going to double click on this and the entire audience sort of starts applauding before he even says anything more. And I think it's just reflective of the kind of relationship that we have in the digital media with our customers. And if you look at the amount of innovation that we put into it, I think that's what is really giving us a lot of confidence about how we can continue to both grow the business. But I think more important, just enable people who have creative ideas that next generation of storytelling and empowering people to bring that to life.
I think today on the demo side was more about digital media. We have that same excitement and that same opportunity in terms of what we are doing with digital experience because every business is trying to understand how that's going to be a tailwind or a headwind. And I think it's our job to use technology to make that a tailwind for how they engage with their customers, much like we did, as I said, in our creative business. So we're incredibly excited about the opportunity. Hopefully today you got a lot more insight into how we look at the business, how we look at the growth drivers.
And I think as custodians of this business, the management team just continues to be focused on how can we continue to drive a really profitable business and a healthy business for our customers, for our employees and certainly for our investors. But we really appreciate you being here today. I think we're going to be around to answer a few more questions. Thank you.