Adobe's Narayen sees growth in video, mobile
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With itsÂ acquisition of Macromedia in late 2005, Adobe Systems won control of the Flash technology that has become a nearly ubiquitous way of authoring and viewing interactive and multimedia content on the Web. Now, the 25-year-old software company with deep roots in creative applications and an iron grip on electronic documents thanks to its de facto-standard PDF document format, has its eye on development and content presentation across all sorts of platforms and devices.
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This old media company is capitalizing on growth initiatives.
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Adobe CEO Bruce Chizen spoke at the&#160;Web 2.0 Summit in San Francisco,&#160;and IDG News Service had a chance to interview him before his appearance at the event. In this edited version of the conversation, Chizen spoke about Adobe&#39;s strategy for hosted software, its baby steps in the online advertising business, and its AIR technology for building desktop-based rich Internet applications.IDGNS: What is Web 2.0 to you, and what is Adobe&#39;s role in it?Chizen: To me, Web 2.0 is the realization of everything we talked about in the Web 1.0 era: The ability to take advantage of Web services, to have rich Internet applications, to have socialization and collaboration, to have hosted applications. These things were talked about but hard to do. Web 2.0 is the execution of that, and Adobe is the enabler of a lot of that experience.Most of the images on the Web have probably been touched by Photoshop. Most of the video is probably edited or enhanced with Premiere. Most of the animation and video playback is Flash. A lot of the rich Internet applications are being built with our Flex framework, taking advantage of Flash. The graphics [involve] Illustrator, and on and on.IDGNS: It seems that in recent months, the Adobe story has gotten more complicated than it was a few years ago as the company moves into new areas and technologies like hosted applications. Are you concerned that this might confuse and alienate existing customers?Chizen: Your perception is accurate. Our business has gotten more complex and more diversified. As a company that has been growing 20 to 30 percent a year, in order for us to sustain that growth, we need to address more customers with different products and solutions. But our mission hasn&#39;t changed for the past 25 years: To help enable the communication of rich ideas and information in a reliable, compelling, engaging manner.Twenty-five years ago we did that on paper with [printing technology] PostScript. What has changed is the world around us: More people are trying to communicate more information than ever before, so we&#39;re able to address more markets.Am I concerned we&#39;ll be alienating our current customers? No. As long as we continue to serve their needs, we&#39;ll be okay.IDGNS: Do you currently generate any revenue from online ads?Chizen: A very tiny amount today via a hosted application called Premiere Express. It lets consumers do simple video editing. We offer it through partners like Photobucket [and MTV]. Some of those business models are advertising-based. We&#39;ll continue to experiment.Our Adobe Media Player [now in beta] is also an ad-based business model. We enable broadcasters and content providers to make money on their content through a very clever advertising user interface. We&#39;re also working on a Photoshop Express, which will let consumers do image editing. It&#39;ll be either ad-based or subscription-based.IDGNS: Do you foresee online ad revenue becoming a noticeable part of Adobe&#39;s revenue mix?Chizen: It depends on how many years you look ahead. Many of our core customers care so much about the quality of the information that they&#39;re trying to provide that they want their solutions to be unencumbered and won&#39;t put up with advertising. But there will be more casual users who will want our capabilities but not pay directly for it, and that&#39;s where you&#39;ll see advertising.IDGNS: Do you offer any of your packaged software products in full-featured but hosted versions?Chizen: No, we don&#39;t.IDGNS: Will there come a time when your full-featured products will be offered as a hosted SaaS (software-as-a-service) model?Chizen: Yes, but over time. To benefit from a full-featured version of Photoshop, the experience as a hosted application wouldn&#39;t be very good, and that&#39;s because of bandwidth speeds. The capability of broadband doesn&#39;t equate to what you can get from your local computer.You&#39;ll see us do hybrid applications that take advantage of the desktop, but where appropriate, we&#39;ll provide hosted functionality for things like sharing. Our Kuler [web-hosted application] lets people collaborate using different color settings, [and works in conjunction with] producs like Illustrator, which resides on the desktop.That&#39;s going to happen over the next number of years: We&#39;ll have these hybrid environments for full-featured applications. As broadband gets greater and greater, there&#39;s the possibility of taking the desktop app and moving it to the host. Five years is probably the minimum.But the capability of the desktop and laptop is advancing so quickly ... and broadband capability isn&#39;t increasing that rapidly. Even if it increased that rapidly, people are throwing more data into the pipes, which will slow down the delivery of the information.IDGNS: So you&#39;re seeing interest from users in hosted software that simplifies workgroup collaboration?Chizen: For more casual users, we&#39;ll have hosted services. We announced a service recently called Share [in beta version], which lets you extend what Acrobat does or what the Adobe Reader does -- document sharing, PDF creation, word processing -- which will all be hosted, but you&#39;re still going to want to do a lot of things on your desktop.IDGNS: Do you agree the future of software delivery is that SaaS/hosted model?Chizen: Eventually. The key is how long does that take. It depends on the application and on broadband capabilities. I&#39;m smart enough to say that will be in 20 years probably.[Chizen later said during his presentation at the conference that he foresaw the Adobe software delivery model changing from packaged applications to SaaS about 10 years from now.]IDGNS: Does the SaaS/hosted model also present a threat to Adobe if stealthy competitors develop from the ground up as hosted software and offer some credible competitors to Adobe packaged applications?Chizen: Any shift of delivery model or business model is a threat to any company like Adobe that makes a lot of their revenue selling desktop software. It&#39;s up to us to make sure that as the environment is capable of delivering functionality to users, that Adobe is there before anyone else.What we&#39;ve done in video editing with Premiere Express, what we&#39;re doing with Photoshop Express with Share, what we do today with PDF creation online are great examples of Adobe being ahead of others in taking advantage of the changing landscape.IDGNS: When did Adobe develop a sense of urgency for reacting to the SaaS trend?Chizen: Back in the first dot-com wave is when we became sensitive to it, and we developed Create PDF Online. I&#39;d say it was a little over two years ago when we got a sense of urgency around it. Our first major hosted application was the Acrobat Connect real-time conferencing product.IDGNS: You&#39;re in the process of&#160;acquiring Virtual Ubiquity, maker of the Buzzword hosted word processing application. Are you interested in having hosted spreadsheet and presentation applications and forming an office productivity suite?Chizen: Spreadsheet, probably not, but the presentation application is intriguing. The trick is to develop one or acquire one where we believe we&#39;re differentiated by leveraging the AIR platform. What excited us about Buzzword wasn&#39;t being in the word processing business but that it&#39;s a great example of what AIR can do. It also fits really nicely into our Acrobat document collaboration strategy.IDGNS: Do you see Adobe competing against Google&#39;s Apps suite of communication and collaboration hosted software and against Microsoft Office?Chizen: It&#39;s more about offering the service to someone who is already collaborating with PDF documents, sharing their documents, or protecting their documents with us online and who wants to be able to edit or create a document. We&#39;re not looking to target the serious word-processing Office user, but for those people who are in our ecosystem, involved in a collaborative workflow, we want to make sure we can address their needs.IDGNS: Why is the AIR approach preferable to building an offline component for browser-based applications along the lines of what Google is doing with Google Gears?Chizen: For some applications, the browser is great, and having offline capabilities will be a great extension. But for other applications, we want complete control over the user experience [and the browser is inadequate.]That&#39;s where we really differentiate: The ability to go a little further in local capabilities, the ability to drag and drop easily from the desktop to the application and back. Those things would be tough to do with a browser. And some applications, you want to stay in them and don&#39;t want to be encumbered by a browser. You want local presence, and that&#39;s where we really shine.IDGNS: What&#39;s your latest take on Microsoft&#39;s Silverlight plug-in for delivering video and interactive graphics on the Web like Flash?Chizen: It appears to be trying to imitate the Flash player: It runs in the browser and is designed for interactivity, animation, and video. Fortunately, we&#39;ve had a 10-year head start, and we have a complete ecosystem around Flash.We&#39;re on 99.1 percent of all computers and on 300 million non-PC devices. More than 70 percent of video is streamed through Flash player. Millions of developers and designers use Adobe tools.It&#39;s going to take Microsoft a long time to catch up, we believe. In the meantime, we continue to advance Flash, and we&#39;re working on AIR. I take Microsoft seriously, but we&#39;re in pretty good shape.
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Apple could rake in hundreds of millions of dollars in new revenues after Adobe releases the next version of its design software suite, CS3, later this month, an analyst said today.
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Software maker Adobe reported a strong financial finish to its 2007 fiscal year with revenue up 23 percent for the year and 34 percent for the fourth quarter on sales of its CS3 (Creative Suite 3) and Acrobat software, the company said Monday.For its fourth quarter ended Nov. 30, Adobe reported record revenue for a three-month period of $911.2 million, compared with $682.2 million for the same time period last year. Revenue beat estimates from analysts polled by Thomson First Call, who were expecting the company to bring in $837 million in the quarter.For the fiscal year ended at the same time, Adobe reported revenue of $3.16 billion, also a record for the company, compared with $2.58 billion last year. Adobe&#39;s net income for the quarter was $222.2 million, a 21 percent increase over the $183.2 million reported in the fourth quarter of fiscal 2006. For the year, net income was up 43 percent at $723.8 million, compared with $505.8 million in fiscal 2006.Diluted EPS (earnings per share) for the fourth quarter of fiscal 2007 were $0.38, slightly above the company&#39;s own range of $0.35 to $0.37, and a 27 percent increase over diluted EPS of $0.30 for the same period last year. Diluted EPS for the year was $1.21, a 46 percent increase over EPS of $0.83 in 2006.A strong end to fiscal 2007 is fitting for what turned out to be a banner year for the publishing and design software vendor. The company released CS3, a combination of its own graphics creation products and Web design and multimedia tools that&#160;it acquired from Macromedia. It is the first real blend of the two companies&#39; complementary technologies in one suite.CS3 so far has been well-received by the creative Web and production design community that has been loyal to both Adobe and the former Macromedia for years, making Adobe the leader among those customers. However, this position also inspired more competition in 2007, most notably from software giant Microsoft, which came out with its Expression suite to rival CS3, as well as new cross-browser software called Silverlight to compete with Adobe&#39;s ubiquitous Flash multimedia technology.2007 also saw&#160;longtime Adobe CEO Bruce Chizen step down at the end of the fiscal year. He made the move as part of a planned transition and so he could pursue other career endeavors. Shantanu Narayen, former president and COO, is now chairman and CEO of the company.Adobe also provided on Monday estimates for its first quarter of fiscal 2008, which ends in February. The company expects revenue between $855 million and $885 million and EPS between $0.34 and $0.36 for the quarter. For fiscal 2008, the company reiterated its target annual revenue growth rate of about 13 percent, which it previously announced.
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Adobe's Premiere Elements simplifies the often-mystifying video-editing and publishing process with tools aimed at nontechnical consumers. It's Windows-only and outperforms Apple's Mac-only iMovie '08.
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Adding to its offerings for digital imaging and video hobbyists, Adobe Systems this week is announcing a new video-editing package and an update to its Photoshop Elements image-editing product.
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Adobe says high dynamic range photography and panorama creation are in Lightroom's purview. Also: why the software development kit isn't as easy as you might think.
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It looks like an unlikely collaboration. Adobe rules in desktop publishing and imaging applications while Yahoo! was once the king of online search.
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Adobe Systems Inc. , the top maker of graphic and Web design software, reported quarterly net profit rose 24 percent, aided by recent upgrades to its two big product lines.
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Microsoft may be ahead of Adobe with programming languages and developer tools, but it is playing catch up at graphic design applications.
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By RACHEL KONRAD  SAN FRANCISCO - After reporting solid third-quarter earnings Thursday, Adobe Systems Inc. hopes to crush Wall Street's long-standing concerns that the company can't perform consistently and across all divisions.
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Adobe Systems Inc. on Monday reported a sharp rise in quarterly profit, driven by robust demand for its Photoshop and document-sharing software.
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Analysts and authors expect Adobe to release a new version of its publishing software soon.
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TechWeb - Adobe releases an upgrade of its consumer-focused photo-editing software, which has been enhanced with new features for improving photo quality.
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Adobe Systems Inc. on Wednesday released an upgrade of its consumer-focused photo-editing software, which has been enhanced with new features for improving photo quality.
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Adobe Systems Inc. is working to  deliver all of its software via the Web as a service rather  than a packaged product, but the transition to earn money from  subscriptions or advertising could take a decade.