Expect a measured expansion from Adobe's traditional businesses into online services and mobile computing, says incoming Adobe Systems CEO Shantanu Narayen.
Narayen was named president and CEO of the Silicon Valley company on Monday. He will succeed his mentor, Bruce Chizen, at the start of December. Nayaren had been president and chief operating officer and was one of the architects behind the 2005 merger with Macromedia.
Shantanu Narayen, incoming Adobe CEO
In a nutshell, the company's strategy is to capitalize on the growth of digital content creation and delivery over the Internet. Viewed in that context, Adobe has plenty of room to grow even as it competes with much larger companies such as Microsoft and Google, he said.
"If you look at our footprint, which is another way to look at it, we have one of the largest in the industry through the ubiquity we've been able to accomplish with the Flash Player and the Adobe Reader," Narayen said in an interview Monday.
Going forward, Adobe's next important platform is the AIR, or Adobe Integrated Runtime, software that allows Web applications to run on desktop PCs.
Ultimately, Narayen said that applications written for AIR and Flash will help Adobe expand its reach further into mobile devices, set-top boxes, and gaming machines.
Rather than view it as a competitive mobile platform, he sees Google's Android software for mobile phones as another way to bring more Flash applications and PDF documents to the mobile Internet.
"Flash Lite already works on Symbian's OS and Windows Mobile, as well as other mobile OSes like Nokia's operating system. So in that sense, if they build an operating system that gains a lot of market share, we can build Flash on top of that," Narayen said.
He anticipates largely organic growth by moving further into mobile software and Web-delivered services for consumers and businesses.
Although the $3.4 billion merger with Macromedia is viewed as a success for the company, Narayen said that its acquisition strategy in the future will focus on smaller technology-oriented company purchases.
"We're excited about going for these opportunities as an independent company, and we will continue to look at small acquisitions to beef up our portfolio," he said.
Adobe Systems on Monday announced that its board of directors named Shantanu Narayen as new chief executive, replacing outgoing CEO Bruce Chizen.
Narayen is the company's current president and chief operating officer. The change will be effective at the beginning of December.
Chizen will serve on Adobe's board through the spring and be an adviser through fiscal year 2008. He has been CEO for the past 7 years and with Adobe for 14 years.
Shantanu Narayen, Adobe's incoming CEO.
(Credit: Adobe Systems)In a statement, Adobe executives said the transition was part of a planned succession.
"Shantanu's extensive knowledge of our products and platforms, customer experience, and exceptional operational leadership make him the ideal choice to lead Adobe as CEO," Chizen said. "For me personally, the time is right for a transfer of leadership."
Narayen joined the company in 1998 as head of Adobe's engineering group. With Chizen, he helped spearhead the acquisition of Macromedia.
During Chizen's time as CEO, the company expanded its product portfolio substantially from its roots with illustrators and designers to a broader audience that includes Web developers and consumers of media software.
He leaves at a good time financially for Adobe.
The company said it expects to hit the high end of the range--between $860 million and $890 million--that it gave financial analysts for fourth-quarter revenue. It also said it anticipates 13 percent revenue growth in fiscal year 2008.
During a conference call Monday, Narayen said Adobe decided to make the announcement now to make it clear the shift was not driven by financial reasons.
Chizen said he is leaving to consider what to do in the next phase of his life. He said he has no plans beyond fiscal 2008 when his time as a strategic adviser ends.
"This was all about me," Chizen said in an interview with CNET News.com. "I want to make sure I left the company in good shape."
Chizen said that in addition to being a more diversified company, Adobe is stronger than when he began as CEO because it is now a platform company. Providing an application platform brings an ecosystem of third-party applications that run with the company's Flash browser plug-in and Acrobat PDF document format.
"The reality is Adobe has been a platform company from day one. It just never thought about itself as a platform company," he said. "AIR (Adobe Integrated Runtime) is absolutely the next big to platform for Adobe."
Narayen said he doesn't anticipate any changes to Adobe's current strategy.
He said demand is very strong for the company's Creative Suite 3 line of multimedia software and is in a good position with its tools and servers to capitalize on applications moving to the Web.
"People have thought of Adobe has authoring tools," he said. "The reality is we are expanding way beyond that."
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