Adobe Flex Authors: Matthew Lobas, PR.com Newswire, Shelly Palmer, Kevin Benedict

Related Topics: Adobe Flex

Adobe Flex: Article

Adobe/Macromedia - Microsoft, Look Out!

As the Adobe-Macromedia Transaction Nears Its Close, a Look Back, Sideways, and Forwards at What's Been Happening Since April 18

On April 18, 2005, as we all know, Adobe Systems Incorporated announced a definitive agreement to acquire Macromedia in an all-stock transaction valued at approximately $3.4 billion. This is a look back, sideways, and forwards, based on what's been happening since then.

After the inevitable wave of early name speculation subsided...would the company be renamed Adobomedia? Macrodobedia? AcroMacrobe?...both Macromedia's Chief Software Architect Kevin Lynch and Adobe's CEO Bruce Chizen made it clear to MXDJ (http://mxdj.sys-con.com/read/49240.htm) and the San Francisco Chronicle respectively that the name of the combined company after Adobe had purchased Macromedia was going to be Adobe pure and simple. Or, as the FAQ promptly displayed on the web phrased it (www.adobe.com/aboutadobe/invrelations/ adobeandmacromedia_faq.html#q6):

What Will Be The Name of the Combined Company?
Adobe Systems Incorporated.
There was no margin of error either so far as the executive pecking order was concerned. As early as April 18, both Adobe and Macromedia carried on their web sites the following statement:

In the combined company, Chizen will continue as chief executive officer and Shantanu Narayen will remain president and chief operating officer. Stephen Elop, president and chief executive officer of Macromedia, will join Adobe as president of worldwide field operations. Murray Demo will remain executive vice president and chief financial officer. Dr. John Warnock and Dr. Charles Geschke will remain as co-chairmen of the Board of Directors of the combined company and Rob Burgess, chairman of the Macromedia Board of Directors, will join the Adobe Board.

This was fleshed out a little in terms of reporting structure [my emphasis below] in the FAQ (www.adobe.com/aboutadobe/invrelations/ adobeandmacromedia_faq.html#q21):

Bruce Chizen will be the chief executive officer of the combined company. Shantanu Narayen will be the president and chief operating officer reporting to Chizen. Macromedia's current chief executive officer, Stephen Elop, will be president, Worldwide Field Operations also reporting to Chizen. In this role, Elop will be responsible for Adobe's sales, field marketing, professional services, sales operations, customer service and technical support. Murray Demo will be executive vice president and chief financial officer reporting to Chizen.
The FAQ added:
Additionally upon close of the transaction, we anticipate other members of Macromedia's senior management will be joining the combined company in key leadership positions.
"Microsoft Is the Competitor"
The goal of the acquisition was and is for the post-transaction Adobe to be able to offer to the customers of the combined company "a broad set of tools, services and solutions for design, digital media, documents, and collaboration" as well as developing new market opportunities around mobile and enterprise solutions that build upon the Adobe and Flash platforms.

This is key. Adobe saw and sees the functionality of Adobe PDF and Macromedia Flash as complementary, enabling the deployment of an industry-defining, cross-media, rich-client technology platform across multiple operating systems and devices.

And where does Microsoft fit into all of this? The answer was already spelt out by Bruce Chizen in 2004, when he spoke to the [email protected] newsletter published by the Wharton School of the University of Pennsylvania, recognized around the world for its innovative leadership and broad academic strengths.

"When I think about competitors," Chizen told the newsletter, "there's only one I really worry about. And it's one that happens to have $35 billion in revenues and $50 billion in the bank. And it happens to be in the software business. Microsoft is the competitor, and it's the one that keeps me up at night." Wharton legal studies professor Kevin Werbach was quick in April to say that the transaction makes a lot of sense for both firms:

"For Macromedia, it was unclear whether the company could have survived in the long run as an independent. While its business has been growing rapidly especially in non-PC gadgets such as cell phones and personal digital assistants."

As Macromedia's former CEO, Robert Burgess, explained in an interview with [email protected] in October (http://knowledge.wharton.upenn.edu/ index.cfm?fa=viewArticle&id=1059), Macromedia didn't have the girth to compete with larger companies like Microsoft.

A key passage in the Wharton interview came when Burgess was asked (remember, this was back in 2004) to what extent Adobe competed with Macromedia: "Very little" was Burgess's immediate response. He elaborated that the only two cases of point products where the two companies competed were Adobe Illustrator/FreeHand and GoLive/Dreamweaver:

"FreeHand competes with Illustrator - it's probably 85% [Adobe Illustrator] / 15% [Macromedia FreeHand] market share - something like that. Dreamweaver has about 95% market share and [Adobe] GoLive has about 5%. Those are the two cases of point products where we compete."

Although FlashPaper produces both a [Flash] SWF-based document format and a PDF format, Burgess was adamant:

"Seriously, I believe that the amount of overlap between Adobe and Macromedia - five years ago - was substantial. And now, it is very little."

When asked whether this a conscious move, Burgess explained that what happened was that Adobe concentrated on some businesses - and really got going with them.

"Adobe's been a document-centric company, and it's done very, very well. Adobe invested in Acrobat for a long time and it was unwavering. And it finally broke through - and that's a great business. Photoshop's a great business for Adobe - we don't have anything that competes with that. Video's a great business for them, as is PostScript. In all their businesses, Adobe has lots of growth and lots of profit. We don't participate there." Meantime Macromedia took a different path, Burgess pointed out:

More Stories By Jeremy Geelan

Jeremy Geelan is Chairman & CEO of the 21st Century Internet Group, Inc. and an Executive Academy Member of the International Academy of Digital Arts & Sciences. Formerly he was President & COO at Cloud Expo, Inc. and Conference Chair of the worldwide Cloud Expo series. He appears regularly at conferences and trade shows, speaking to technology audiences across six continents. You can follow him on twitter: @jg21.

Comments (3) View Comments

Share your thoughts on this story.

Add your comment
You must be signed in to add a comment. Sign-in | Register

In accordance with our Comment Policy, we encourage comments that are on topic, relevant and to-the-point. We will remove comments that include profanity, personal attacks, racial slurs, threats of violence, or other inappropriate material that violates our Terms and Conditions, and will block users who make repeated violations. We ask all readers to expect diversity of opinion and to treat one another with dignity and respect.

Most Recent Comments
JSaiya 10/21/05 12:40:46 PM EDT

"He [Macromedia's former CEO, Robert Burgess] elaborated that the only two cases of point products where the two companies competed were Adobe Illustrator/FreeHand and GoLive/Dreamweaver"

Hmm. What about Photoshop/ImageReady vs. Fireworks? Or do they consider FW to be just an add-on to Dreamweaver? I know FW alone is not a competitor to Photoshop for non-Web imaging, but in the Web space...?

I'd hate to see FW disapear. Maybe ImageReady will go away.

MXDJ News Desk 10/15/05 04:29:00 PM EDT

Adobe/Macromedia - Microsoft, Look Out! On April 18, 2005, as we all know, Adobe Systems Incorporated announced a definitive agreement to acquire Macromedia in an all-stock transaction valued at approximately $3.4 billion. This is a look back, sideways, and forwards, based on what's been happening since then.

Ruth 09/21/05 05:40:58 PM EDT

A hardy wheat grown mostly in Europe.

Did you not mean spelled out?

@ThingsExpo Stories
DevOpsSummit New York 2018, colocated with CloudEXPO | DXWorldEXPO New York 2018 will be held November 11-13, 2018, in New York City. Digital Transformation (DX) is a major focus with the introduction of DXWorldEXPO within the program. Successful transformation requires a laser focus on being data-driven and on using all the tools available that enable transformation if they plan to survive over the long term. A total of 88% of Fortune 500 companies from a generation ago are now out of bus...
With 10 simultaneous tracks, keynotes, general sessions and targeted breakout classes, @CloudEXPO and DXWorldEXPO are two of the most important technology events of the year. Since its launch over eight years ago, @CloudEXPO and DXWorldEXPO have presented a rock star faculty as well as showcased hundreds of sponsors and exhibitors! In this blog post, we provide 7 tips on how, as part of our world-class faculty, you can deliver one of the most popular sessions at our events. But before reading...
DXWordEXPO New York 2018, colocated with CloudEXPO New York 2018 will be held November 11-13, 2018, in New York City and will bring together Cloud Computing, FinTech and Blockchain, Digital Transformation, Big Data, Internet of Things, DevOps, AI, Machine Learning and WebRTC to one location.
DXWorldEXPO LLC announced today that ICOHOLDER named "Media Sponsor" of Miami Blockchain Event by FinTechEXPO. ICOHOLDER give you detailed information and help the community to invest in the trusty projects. Miami Blockchain Event by FinTechEXPO has opened its Call for Papers. The two-day event will present 20 top Blockchain experts. All speaking inquiries which covers the following information can be submitted by email to [email protected] Miami Blockchain Event by FinTechEXPO also offers s...
DXWorldEXPO | CloudEXPO are the world's most influential, independent events where Cloud Computing was coined and where technology buyers and vendors meet to experience and discuss the big picture of Digital Transformation and all of the strategies, tactics, and tools they need to realize their goals. Sponsors of DXWorldEXPO | CloudEXPO benefit from unmatched branding, profile building and lead generation opportunities.
Dion Hinchcliffe is an internationally recognized digital expert, bestselling book author, frequent keynote speaker, analyst, futurist, and transformation expert based in Washington, DC. He is currently Chief Strategy Officer at the industry-leading digital strategy and online community solutions firm, 7Summits.
Digital Transformation and Disruption, Amazon Style - What You Can Learn. Chris Kocher is a co-founder of Grey Heron, a management and strategic marketing consulting firm. He has 25+ years in both strategic and hands-on operating experience helping executives and investors build revenues and shareholder value. He has consulted with over 130 companies on innovating with new business models, product strategies and monetization. Chris has held management positions at HP and Symantec in addition to ...
Cloud-enabled transformation has evolved from cost saving measure to business innovation strategy -- one that combines the cloud with cognitive capabilities to drive market disruption. Learn how you can achieve the insight and agility you need to gain a competitive advantage. Industry-acclaimed CTO and cloud expert, Shankar Kalyana presents. Only the most exceptional IBMers are appointed with the rare distinction of IBM Fellow, the highest technical honor in the company. Shankar has also receive...
Enterprises have taken advantage of IoT to achieve important revenue and cost advantages. What is less apparent is how incumbent enterprises operating at scale have, following success with IoT, built analytic, operations management and software development capabilities - ranging from autonomous vehicles to manageable robotics installations. They have embraced these capabilities as if they were Silicon Valley startups.
The standardization of container runtimes and images has sparked the creation of an almost overwhelming number of new open source projects that build on and otherwise work with these specifications. Of course, there's Kubernetes, which orchestrates and manages collections of containers. It was one of the first and best-known examples of projects that make containers truly useful for production use. However, more recently, the container ecosystem has truly exploded. A service mesh like Istio addr...
Poor data quality and analytics drive down business value. In fact, Gartner estimated that the average financial impact of poor data quality on organizations is $9.7 million per year. But bad data is much more than a cost center. By eroding trust in information, analytics and the business decisions based on these, it is a serious impediment to digital transformation.
Predicting the future has never been more challenging - not because of the lack of data but because of the flood of ungoverned and risk laden information. Microsoft states that 2.5 exabytes of data are created every day. Expectations and reliance on data are being pushed to the limits, as demands around hybrid options continue to grow.
Business professionals no longer wonder if they'll migrate to the cloud; it's now a matter of when. The cloud environment has proved to be a major force in transitioning to an agile business model that enables quick decisions and fast implementation that solidify customer relationships. And when the cloud is combined with the power of cognitive computing, it drives innovation and transformation that achieves astounding competitive advantage.
As IoT continues to increase momentum, so does the associated risk. Secure Device Lifecycle Management (DLM) is ranked as one of the most important technology areas of IoT. Driving this trend is the realization that secure support for IoT devices provides companies the ability to deliver high-quality, reliable, secure offerings faster, create new revenue streams, and reduce support costs, all while building a competitive advantage in their markets. In this session, we will use customer use cases...
Digital Transformation: Preparing Cloud & IoT Security for the Age of Artificial Intelligence. As automation and artificial intelligence (AI) power solution development and delivery, many businesses need to build backend cloud capabilities. Well-poised organizations, marketing smart devices with AI and BlockChain capabilities prepare to refine compliance and regulatory capabilities in 2018. Volumes of health, financial, technical and privacy data, along with tightening compliance requirements by...
The IoT Will Grow: In what might be the most obvious prediction of the decade, the IoT will continue to expand next year, with more and more devices coming online every single day. What isn’t so obvious about this prediction: where that growth will occur. The retail, healthcare, and industrial/supply chain industries will likely see the greatest growth. Forrester Research has predicted the IoT will become “the backbone” of customer value as it continues to grow. It is no surprise that retail is ...
Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life settlement products to hedge funds and investment banks. After, he co-founded a revenue cycle management company where he learned about Bitcoin and eventually Ethereal. Andrew's role at ConsenSys Enterprise is a mul...
The best way to leverage your Cloud Expo presence as a sponsor and exhibitor is to plan your news announcements around our events. The press covering Cloud Expo and @ThingsExpo will have access to these releases and will amplify your news announcements. More than two dozen Cloud companies either set deals at our shows or have announced their mergers and acquisitions at Cloud Expo. Product announcements during our show provide your company with the most reach through our targeted audiences.
DXWorldEXPO LLC announced today that "Miami Blockchain Event by FinTechEXPO" has announced that its Call for Papers is now open. The two-day event will present 20 top Blockchain experts. All speaking inquiries which covers the following information can be submitted by email to [email protected] Financial enterprises in New York City, London, Singapore, and other world financial capitals are embracing a new generation of smart, automated FinTech that eliminates many cumbersome, slow, and expe...
Cloud Expo | DXWorld Expo have announced the conference tracks for Cloud Expo 2018. Cloud Expo will be held June 5-7, 2018, at the Javits Center in New York City, and November 6-8, 2018, at the Santa Clara Convention Center, Santa Clara, CA. Digital Transformation (DX) is a major focus with the introduction of DX Expo within the program. Successful transformation requires a laser focus on being data-driven and on using all the tools available that enable transformation if they plan to survive ov...