Newsmaker: It's Adobe's game to lose, CEO says

It isn't always easy being on top.

Adobe Systems may have a clear lead in the market for so-called creative software: things like photo editing, Web page design and layout tools. But the world has changed. People no longer assume that packaged software from big companies is best, and an ever-growing number of applications are available for free.

CEO Bruce Chizen says it's Adobe's game to lose. A new version of the company's Creative Suite bundle is coming later this month. But Chizen sees Google and a handful of other competitors zeroing in on Adobe's key markets by offering free Web-based tools. That's why the company has plans to launch a free, online version of its flagship Photoshop application in the next few months.

In the last of a two-part interview, Chizen talks about competitors both old and new, some surprises hidden in the Macromedia acquisition and why video is the next big thing for Adobe.

Q: When you were asked last year why Adobe did the Macromedia deal, you said: Flash. A one-word answer.
Chizen: Yeah, I got a lot of other things along with that. I got great, innovative, aggressive people that helped instill Adobe with more of that. We got a great video platform, which quite frankly was a surprise. I didn't really understand the power of Flash video until after the fact. The Flash media server was a big surprise. Having a Web layout tool that was market-leading, with Dreamweaver, was a big win for us. We tried for years with Go Live. As good of a product as it was, we could never be core to the Web, we were always peripheral.

The onus is on us to deliver a solution. If we don't, Google will. The way I would describe it is, I'm concerned about Adobe getting there in time to address our users' requirements. So Google could get there first, but there are others.

Will Dreamweaver become more of an integral part of Creative Suite?
Chizen: Yes, in the next version. You will be able to double-click on an image in Dreamweaver and launch Photoshop, make the changes in Photoshop and the image automatically changes in Dreamweaver. We will continue to draw the connection from creative tools to Flex.

As far as other things from the Macromedia deal, we got Flex and ColdFusion as a way to add value to business processes, and we got a bigger play in mobile. We knew that the way people would access information was going to become more non-PC than PC, but the Adobe Reader was not the right fit. We had a couple of false starts but couldn't really get there. And Flash Lite was taking off. The fact that device makers were paying for it, as opposed to us forcing them to install it, is pleasing. We're on 200 million non-PC devices. Every Sony Playstation 3 has Flash Lite.

Do you compete with Microsoft in the electronic forms area, with Office 2007?
Chizen: Yes. We compete with Microsoft, but we don't bump into them that much. Most of our users are in financial services, manufacturing, health, pharmaceuticals and government, where they have to go outside the firewall and they need the reliability of Adobe Reader and that's where Microsoft falls apart. You can't get the reliability and insist that everyone use Windows XP, or XP Service Pack 2, or Vista. Our customers want their users to have access to their forms and business processes regardless of operating system, regardless of browser and they need it done in a reliable way, which limits the use of HTML. So it's really a unique value proposition that we have. If you go to Ameriprise or Fidelity, they use Adobe Flex and Live Cycle. Even people like Yahoo, if you look at Yahoo Maps, that's all Flex/Flash. Even Google Finance is Flash.

We do something that is truly unique. There's a lot of users who don't need us. But where we do something unique, it truly is unique and it's hard to do it any other way. The only company that can really do stuff that imitates what we do is Google, just because of the pure talent and resources they have.

I was surprised to hear you mention Google as the only company that can do some of what you do. Can you explain a bit more about what you mean?
Chizen: When I say some of what we do, they can create Web sites that are compelling without using our tools in part because they can afford to do it, and have the knowledge to do a lot of hand-coding, because they have such a breadth and wealth and depth of talent that others can't afford.

But wouldn't Microsoft fall into that category?
Chizen: If you look at their Web site, and they use a lot of Flash, they use a lot of PDF. The fact they are not even using a lot of their own technologies suggests to me that, while they can produce great tools, their ability to use their tools to express what they do on their own Web site is not as great as for someone like Google.

What about Google competing with you on some of your hosted applications?
Chizen: If we don't get there, they will. Shame on us if we don't get there before them. People come to us for those tasks, they rely on us, they expect us. If they want to have those solutions delivered to them through the Web, through a business model where they don't have to pay, we had better do that or we are going to lose that customer.

It's no different than when we introduced Photoshop Elements a few years ago. There's the Photoshop customer, (but) everyone was concerned about what we were going to do for the low-end customer. Well, if we didn't have an offering today, the world would be a lot different. The onus is on us to deliver a solution. If we don't, Google will. The way I would describe it is, I'm concerned about Adobe getting there in time to address our users' requirements. So Google could get there first, but there are others. There will be a market opportunity and there's a number of people who could get there. I better get there, Adobe better get there, before anybody else gets there, with Google being a likely, but not the only, candidate.

More Newsmakers

[LarryLo]

Good for you Adobe!

I am an Adobe fan and have been for years.

Reading this interview I see they have some smart forward thinking people there.

I love the MS Quote (They don't use their own technologies in their website...hahahaha).

Adobe seems to be an example of a company doing the right things to make money without extorting their users.

[Below Meigh]

...bad for designers

Adobe no longer patches problems as often. Instead, Adobe has moved to an "Upgrade" mission. That is a feature set you need? No problem, we'll not bother fixing it, but instead put it in our nth Suite release!
They monopolized the illustration and web-design market by taking over Macromedia. They act high-than-thou with Apple users (e.g. Every app under OS X uses Apple-H to hide menus...all but Adobe).
Adobe got into bed with MS to force users to throw out thousands of dollars worth of type families and embrace their new (order) of Opentype. All because they would not meet Apple on licensing PostScript/Display Postscript. So Apple made it's own dfont and it's been a PITA for designers.
Adobe is an example a company that is getting too big for its britches.
Adobe likely caused Apple to lose millions in sales by delaying the release of a universal binary for the intel-macs. How long has it been? 2 years? And now, this month (but will ship in April) they are releasing CS3?
Oh, and their authorization scheme is another sign of control. The next one is the "terminal-server" approach to licensing an online, "Live Photoshop" where the consumer pays to connect and via browser, use photoshop. And laugh at those that paid the full amount...
I welcome Gnome. And LineFormX. And pdf programs. And I hope Adobe pays a price for ISO approval with pdf.

[jeph4e]

A Year Late - People look to smaller companies because you move too slow

Having to wait a year for a Mactel solution is just stupid on
Adobe's part.

Most folks who invested (as most had to move to current Apple
hardware due to various reasons) we ticked off at Adobe for not
having *anything* to help Rosetta apps be less crash happy.

We've moved away from many Adobe apps at this point and
unlikely to trust them in the future. Kudos to Quark for getting
back in the game.

[LEOPiC]

Quark back in the game?

Like if.... be realistic, Quark is long time dead, it's complicated, it's ugly and not practical, it only is, if you have been using it for more than 3 years, then again PEARL programmers will never leave PEARL, just because they think it's superior, not because it really is...

[jeph4e]

Quark is the Game

Look if you're in publishing/ad/media - Quark still owns a
mighty nice size of the market.

And yes it is all those negative things - but it is a lot less crash-
happy than InDesign under Rosetta.

My point is Adobe could have addressed this a long time ago but
were just too interanally focused. No doubt it will be a suite of
great products but they could have addressed some issues prior
to May '07

Adobe got freehand and own illustrator and corel stopped
coding for the mac.

[LEOPiC]

gnome, lineforms...

You can not really compare open-source hobbied based applications (I AM NOT saying all of them are) to the power/quality of a Photoshop and... just so you know this morning I was prompted to update my Camera RAW Plugin, I use Photoshop CS2 and well, I did not take a NEW Suite to update that... did it ?

[azareus]

interactive mind

flash is great for creating extensible web apps and unlocking the interactivity of the mind. even improving the brain.
http://brain.com

[Eggs Ackley]

Not if they're running Linux

"If there is one killer feature in the new version of Photoshop that is not in the open-source product, people will want Photoshop."

[Penguinisto]

...or OSX, or Windows...

Seriously - it had better be "killer" enough to justify the costs;
otherwise I'll stick with GIMP, which does pretty much the whole
schmiel, thanks much.

/P

[James verDoorn]

Adobe Reader - Kinko's link

It truly is Adobe's game to lose and one way to do that is by
offending their loyal customers.

Adobe should have known that adding a direct link to Kinko's in
the new Adobe Reader was a slap in the face to the thousands of
professionals that have purchased their software thru the years.

Most printers and graphic designers rely on Adobe software
when emailing proofs to our clients.

I, for one, do not want my clients to be required to use software
with a link to Kinko's in order to view the proofs I have created.

This was an outrageous decision.