Adobe moving to the web

[PierreVandevenne]

Adobe began as a well managed money making machine. I came to know them in the 80s as the "display PostScript" company, a technology they licensed unsurprisingly from Xerox Parc. I even bought fonts from them when typography was all the rage and Bodoni had his time under the spotlight. Then, they put that money to good use. Then, they did an outsanding job with Photoshop, the equivalent of the archetypal Visicalc/Lotus 1-2-3 killer app for the graphic age. Display PostScript evolved into PDF and killed it's competition. After that glorious period, one can't help wondering if they haven't become a business/marketing machine only. Their most interesting products, in each era - think Dreamweaver and the rest of Macromedia heritage including Flash, think Lightroom recently - were acquired from third parties and then incrementally (in most cases with small increments) improved. The archetypal exemple of this flashy incremental strategy is "content aware fill" which is the kind of stuff that wows people, but ends up being of very limited use in real life. But nowadays, except for the milking of their de facto monopolies in some areas, it seems that their only chance of growth for stockholders is to push the envelope in terms of what they can milk from their existing user base.

[Schewe]

...think Lightroom recently - were acquired from third parties and then incrementally (in most cases with small increments) improved.

Wrong...Lightroom was a total internal development project by Mark Hamburg. Nothing external had any impact on Lightroom including Apple's Aperture which while released before LR was actually started at about the same time. It's also useful to note that Photoshop was licensed (it wasn't bought out from the Knoll brothers till version 3) as a vector to raster utility for Illustrator 88.

If you are trying to draw conclusions based on Adobe's history, it would be useful to be drawing those conclusions on correct data...

[daws]

I mean what are the odds 1M former Photoshop users could agree on anything?

If Adobe continues on its present course, that question will answer itself.

[PierreVandevenne]

Wrong...Lightroom was a total internal development project by Mark Hamburg. Nothing external had any impact on Lightroom including

My apologies. I thought they had purchased Pixmantec Rawshooter and didn't know Lua was an internal Adobe development.

[undavide]

Hi,
I'd like to add my 5 cents to the discussion of recent Adobe's changes...
I wrote a detailed article about that, looking at the company both from the financial and technology point of view - that may explain, possibly, most of the recent changes - for the better and/or for the worse...
You can find it here: "Is Adobe at a Crossroads?". Any comment is welcome!
Regards,

Davide Barranca
www.davidebarranca.com

[feppe]

Hi,
I'd like to add my 5 cents to the discussion of recent Adobe's changes...
I wrote a detailed article about that, looking at the company both from the financial and technology point of view - that may explain, possibly, most of the recent changes - for the better and/or for the worse...

From your blog:

According to some analysts’ opinion, Narayen finds himself in the unhappy position of solving a trivial problem: Adobe’s stocks stagnation in a worldwide economy crisis. Unless he finds a way to revitalize them, the company may risk to become a takeover target – bad end from an executive point of view, since they got part of their incomes as a stock options.

That's a feeble argument. Narayen holds 204,818 shares of Adobe as per the latest insider transaction filings, which are valued at well over $5.5m today, and other executives likely hold significant stock (not only options) already. Therefore it is very possible they would gain from a takeover if the price of the stock increases due to rumors - which happens often -, or due to a hostile takeover - ie. the company taking over has to pay a premium on current stock price to convince stock holders to part with their stock. I don't know about Adobe's stock option policy, but it is possible they would not lose anything depending on the vesting rules.

Executive contracts have protection from practically all contingencies, so no matter what happens to Adobe stock or Adobe the company, they will get handsome monetary rewarded.

In fact, about 4 months after Creative Suite 4 release Adobe’s stocks slumped badly, from $43 to $17 (-53%), as a direct result of a fall in sales.

No, stock price did not fall "as a direct result of a fall in sales." NASDAQ went down in the same period by around 35%, as did related stocks like Microsoft and Autodesk. Depending on the beta of Adobe's stock it is very possible that Adobe's stock fell as a direct result of the overall market. Depending on who you believe, upwards of 80% of an individual stock's price is driven by its industry, not by the stock itself.

Nonetheless, at least one upgrade failed dramatically; some commenters said that Adobe has been unable to build products the quality of which could support sufficient sales to prevent a series of shake-outs; and it may now appear that the company urges to find a better financial position in the stock market, in order not to become a takeover target.

There are many much more better reasons to improve a company's financial position than avoiding takeovers.

Pretty much stopped reading there...

[Schewe]

My apologies. I thought they had purchased Pixmantec Rawshooter and didn't know Lua was an internal Adobe development.

Lua is a scripting language not the name of the project. The code name of the project was Shadowland which you can read about here. Adobe did purchase Pixmantec but AFTER Lightroom was developed and released in beta form. The development of Lightroom started in 2003 by Mark Hamburg. Pixmantec was bought in 2006 for some technology and to get the engineer who worked on ACR/LR for a while but has no left the company.

[undavide]

NASDAQ went down in the same period by around 35%, as did related stocks like Microsoft and Autodesk

Some say that even if the last ten years were not the brightest ones for many tech stocks, Adobe did compare poorly to many others companies like the ones you mention - and mind you, Adobe had a near-monopoly in its field and almost no competitors.

Pretty much stopped reading there...

That is regrettable, of course!
Even if we disagree on financial analysis (not a problem at all to me, analysts strongly disagree now on the future of the EURO zone, for instance, and they happily keep doing their job) I would have liked to know your opinion about the points I made there, such as:

1. A company which underwent 3 rounds of layoffs for +2.000 employees in the last 3 years is a company that is profoundly changed - and perhaps not for the better.
2. Being the core business split in two (so different) areas, such as creative content production and ad/marketing/web statistics, this may give rise to some legitimate doubts, especially if you know that:
2a. Upgrade cycles must coordinate some +20 different application (which is crazy or not a very good thing, depending on your attitude)
2b. Some application paradigms (in the blog I refer particularly to Photoshop) are old, and the development cycles can't afford the company to make any true, actual rethinking/rebuilding of the paradigm: only make it slightly evolute (some say for the better, some say for the worse)
3. You shouldn't feel particularly malicious if you think that the recent changes (like the upgrade policy, with the discount on CS5.5 upgrade) are just a way to raise upgrade revenues in the last 2011 months, and not a way to please/help the users base and gently move them towards a subscription system.
4. Adobe has risen some bad feelings on that very same user base (unfairness, unloyalty) for they are using some old tricks to squeeze some extra money and changing the rules after the cards are dealt - and (if you consider the bad, bad communication around the Flash/Flex affair - just a week or so after MAX 2011 when everything seemed oh so fine and happy) to developers as well - left into the panic waiting for official information about the future of their businesses.
5. Etc etc, I don't want to leave those willing to read the full post without any surprise.

Anyway, thanks for taking the time to comment.
Kind regards

Davide Barranca
www.davidebarranca.com

[Alan Goldhammer]

Adobe is making a classic business decision based on their product and user base.  One of the real difficulties in standing pat with PS CS5.x and LR3.x is that they are unlikely to support new cameras and lenses when the upgrades appear.  I so rarely use PS these days (I must be in the Michael Reichman school as per his statement in the latest LuLa C2P tutorial) so I can probably live without an upgrade since it's difficult to see what new can be added that would really help out.  However, if I don't upgrade LR and a new Nikon comes out that I really want there is a risk that I would need to take.  It's not like MSFT products where I can stay content using old versions of Word and Excel (and there are great open source alternatives if one want them).  Ultimately, I'll upgrade LR (and if softproofing is there use PS even less).

[PierreVandevenne]

Lua is a scripting language not the name of the project. The code name of the project was Shadowland which you can read about here. Adobe did purchase Pixmantec but AFTER Lightroom was developed and released in beta form. The development of Lightroom started in 2003 by Mark Hamburg. Pixmantec was bought in 2006 for some technology and to get the engineer who worked on ACR/LR for a while but has no left the company.

that's OK Jeff - I scripted games in Lua in the late 90s. I was just teasing a bit on the "nothing external had any impact" thing.

[feppe]

Some say that even if the last ten years were not the brightest ones for many tech stocks, Adobe did compare poorly to many others companies like the ones you mention - and mind you, Adobe had a near-monopoly in its field and almost no competitors.

That is regrettable, of course!
Even if we disagree on financial analysis (not a problem at all to me, analysts strongly disagree now on the future of the EURO zone, for instance, and they happily keep doing their job) I would have liked to know your opinion about the points I made there, such as:

1. A company which underwent 3 rounds of layoffs for +2.000 employees in the last 3 years is a company that is profoundly changed - and perhaps not for the better.
2. Being the core business split in two (so different) areas, such as creative content production and ad/marketing/web statistics, this may give rise to some legitimate doubts, especially if you know that:
2a. Upgrade cycles must coordinate some +20 different application (which is crazy or not a very good thing, depending on your attitude)
2b. Some application paradigms (in the blog I refer particularly to Photoshop) are old, and the development cycles can't afford the company to make any true, actual rethinking/rebuilding of the paradigm: only make it slightly evolute (some say for the better, some say for the worse)
3. You shouldn't feel particularly malicious if you think that the recent changes (like the upgrade policy, with the discount on CS5.5 upgrade) are just a way to raise upgrade revenues in the last 2011 months, and not a way to please/help the users base and gently move them towards a subscription system.
4. Adobe has risen some bad feelings on that very same user base (unfairness, unloyalty) for they are using some old tricks to squeeze some extra money and changing the rules after the cards are dealt - and (if you consider the bad, bad communication around the Flash/Flex affair - just a week or so after MAX 2011 when everything seemed oh so fine and happy) to developers as well - left into the panic waiting for official information about the future of their businesses.
5. Etc etc, I don't want to leave those willing to read the full post without any surprise.

Anyway, thanks for taking the time to comment.
Kind regards

Davide Barranca
www.davidebarranca.com

Although I'm no, ahem, analyst, I do this kind of stuff for a living, so I'd rather not spend (more of) my free time on it...

[LKaven]

[...]Adobe has risen some bad feelings on that very same user base ... changing the rules after the cards are dealt[...]

This is well put, and in many ways it comes down to that: a fundamental break with good faith. 

[sniper]

Wrong...Lightroom was a total internal development project by Mark Hamburg. Nothing external had any impact on Lightroom including Apple's Aperture which while released before LR was actually started at about the same time. It's also useful to note that Photoshop was licensed (it wasn't bought out from the Knoll brothers till version 3) as a vector to raster utility for Illustrator 88.

If you are trying to draw conclusions based on Adobe's history, it would be useful to be drawing those conclusions on correct data...

Thats not what Adobe said in june 2006  "Adobe has purchased the 'technology assets' of Pixmantec, the Danish company behind the RawShooter raw workflow and conversion application. Adobe states that this acquisition "strengthens Adobe's leadership position in raw processing" and that that Pixmantec's raw processing technology will be integrated into Lightroom and other Adobe products"

[john beardsworth]

You can try all you like to find inconsistencies in the wording, but Lightroom was an internal project and not a development of RawShooter, was released before the acquisition, and some of Pixmantec's know-how found its way into Lightroom and other Adobe products. FFS.

[ErikKaffehr]

Hi,

Lightroom was an existing product, or at least Beta, before the Pixmantec acquirement. I was using it at that time. I also was using Pixmantech Raw Shooters Premium edition while it lasted. They were very different products with a few things in common.

BR
Erik

Thats not what Adobe said in june 2006  "Adobe has purchased the 'technology assets' of Pixmantec, the Danish company behind the RawShooter raw workflow and conversion application. Adobe states that this acquisition "strengthens Adobe's leadership position in raw processing" and that that Pixmantec's raw processing technology will be integrated into Lightroom and other Adobe products"

[Schewe]

.....and that that Pixmantec's raw processing technology will be integrated into Lightroom and other Adobe products"

Uh huh...Vibrance came from Rawshooter and so did a a modification of Fill Light. Vibrance was completely rewritten to fit in the ACR/LR pipeline but it did come from the mind of Michael Johnson of Pixmantec. But that's a drop in the bucket of the control set and functionality of ACR/LR at the time. So, LR predates Rawshooter.

Just so you know, I was working with Adobe at that time to improve the capture sharpening of Camera Raw and Lightroom. I went to dev meetings at Thomas Knoll's house and worked with Thomas and Mark Hamburg. So, I kinda know this stuff for a fact as apposed to a vague press release sent out from Adobe.

[PierreVandevenne]

OK, you are, without a doubt, much better informed than we are.

But then, while its paints a much better picture of Adobe's internal R&D abilities, it's more worrying on the management side: if what they purchased was so minor that it was almost irrelevant, buying it wasn't sensible economically. Anyway, Adobe isn't worse than many other large companies in that respect...

[Schewe]

But then, while its paints a much better picture of Adobe's internal R&D abilities, it's more worrying on the management side: if what they purchased was so minor that it was almost irrelevant, buying it wasn't sensible economically. Anyway, Adobe isn't worse than many other large companies in that respect...

The press release didn't say how much Adobe paid, did it? I wouldn't presume it was a huge amount. Adobe is rather cheap (I know this from personal negotiations :~)

And I'm not trying to defend Adobe the corporation...but rather the people I know who are friends. When it comes to the Photoshop team and the ACR/LR teams I know them to be a very hard working and dedicated group from personal experience. As for the rest of the dev teams, I don't have a lot of personal interaction and thus little knowledge. I'm also on the fence about the whole Creative Cloud initiative and I think the change in the upgrade policy is an unexpected surprise that will adversely impact a lot of people. So, we'll see how this all shakes out. The 1 version upgrade doesn't have an impact on me since I would always upgrade to the next version and do so very early in the product cycle to get the max ROI. I really don't understand why people seem to want to delay an upgrade to shorten the usefulness and value of the upgrade. I do understand why some people only upgrade alternative versions...something the new policy will eliminate I suppose.

[ErikKaffehr]

Hi,

I used the Pixmantech product, it was a very good raw converter, but not really a workflow solution. At that time I was sort of a computer geek. In that timeframe Apple released something called Aperture, which for me was the right way to handle images,unfortunately on Macs, I was on Linux and Windows at that time.

I got the impression that Lightroom (which used to be called Shadowland) got green to go after the Aperture announcement. A public Beta was released pretty soon. The public Beta release three was the first one on Windoze, and I'm pretty sure I downloaded it first day. Some time after that Adobe acquired Pixmantech and promised that Premium Edition user would have a free copy of Lightroom 1.0. They kept their promise.

Me? I switched to Mac, but I'm still a geek ;-)

Best regards
Erik

The press release didn't say how much Adobe paid, did it? I wouldn't presume it was a huge amount. Adobe is rather cheap (I know this from personal negotiations :~)

And I'm not trying to defend Adobe the corporation...but rather the people I know who are friends. When it comes to the Photoshop team and the ACR/LR teams I know them to be a very hard working and dedicated group from personal experience. As for the rest of the dev teams, I don't have a lot of personal interaction and thus little knowledge. I'm also on the fence about the whole Creative Cloud initiative and I think the change in the upgrade policy is an unexpected surprise that will adversely impact a lot of people. So, we'll see how this all shakes out. The 1 version upgrade doesn't have an impact on me since I would always upgrade to the next version and do so very early in the product cycle to get the max ROI. I really don't understand why people seem to want to delay an upgrade to shorten the usefulness and value of the upgrade. I do understand why some people only upgrade alternative versions...something the new policy will eliminate I suppose.

[undavide]

I really don't understand why people seem to want to delay an upgrade to shorten the usefulness and value of the upgrade. I do understand why some people only upgrade alternative versions...something the new policy will eliminate I suppose.

Hi Jeff, perhaps the attitude of delaying an upgrade is a mix of prudence ("is it buggy? Will it be compatible with my XYZ plugin?") and economic assessment ("Do I really need it? Is there anything new that my workflow will benefit from? Should I consider to skip the upgrade?" - and these are tough times we all know); questions that may take some time to evaluate properly and answer to.

I don't know whether the new policy will make users prone to constant upgrades or prone to constant unhappiness. Personally, speaking about Creative Cloud, I would have liked not a "bigger offer" (more products: the CS + the DPS + Edge + Muse + Typekit +...), but instead a strong commitment to rethink the Creative Suite.

I speak about Photoshop (for it's the software that I've been using the most over the years): I love it of course, but the paradigm is old: it's been planned, coded, built when Photoshop users were utterly different from today, and their needs were utterly different too. Of course it's been evolving (usually, but not always IMHO, for the better): like in evolution of living creatures, one generation can only be slightly different from its parents. No revolutions allowed.
Lightroom was so successful "just" because it's been coded following a new paradigm, that fits better nowadays needs. Photoshop in my opinion (and possibly other CS applications, I don't know) would need a complete rethinking. That will never happen of course - it underwent a complete rewriting when it went to Cocoa, but it's a completely different story: but if (or when) a smaller software house will show up in some future ahead with a modern tool built on a modern paradigm, I guess Adobe Photoshop may encounter some troubles (InDesign Vs. Quark XPress should teach that 800 pound gorillas can be defeated ).
A monopolist, I think, can make his user base angry (yes, they will upgrade just the same), nonetheless the very same user base will kiss him bye-bye as soon as a viable alternative appears - and with technology evolving at such an high rate, it's just a matter of time... Who knows!?!
Regards

Davide Barranca
www.davidebarranca.com