First, some background on Adobe from Knowledge@Wharton:
During the past two decades Adobe Systems’ products have had a major impact on business processes in several industries. Its PostScript printer language, first shipped in printers by Apple and QMS in 1985, revolutionized digital typesetting and made desktop publishing possible. In 1993, Adobe’s Acrobat software introduced PDF. Other products, such as Photoshop, won lots of loyal customers.
But brilliant technology does not necessarily create a successful business. By mid-1998 — when most other technology companies were booming — Adobe was in trouble, experiencing stalled product sales and a sagging stock price. As part of a major corporate overhaul in August 1998, most of Adobe’s executive management left the company, and Bruce R. Chizen was promoted to executive vice president, products and marketing. Chizen led a drastic restructuring of Adobe’s business, including instituting several rounds of layoffs and defending the company from a hostile takeover attempt by rival Quark. In 2000 Chizen was named the company’s president and CEO.
Now Chizen is hoping to remake Adobe again — betting that by combining the core electronic document capabilities of its Acrobat products with a new collection of server-based products, Adobe Systems can become a major supplier of application solutions to enterprise businesses.
Next, excerpts from an interview with the Adobe CEO:
Our mission hasn’t changed. It’s always been about developing, designing, marketing, selling software to help people to communicate better. But being able to stay with what we do well — and then growing the number of our constituents — was a major transformation for the company. The fact that we could articulate our mission was a huge change for us.
For example, look at a company like Honda, which — whether consciously or not — realizes that what it does well is build engines. Once Honda has figured that out, it can go from making engines for lawn mowers to building motor-scooters. From motor scooters, it could go to building really good motor cycles, and then cars. Now, recently, Honda has begun to build jet engines. Adobe is similar. We know what we do well — we make software where “good enough” is not acceptable. Over the last five years, we’ve managed to take our core competence and reach many more constituents.
We have grown from being a “point product” company to a technology platform provider. What we’ve done recently with the Creative Suite allows us to provide not only a great solution for our customers but it provides a vehicle in which to build more products and services.
The biggest growth opportunity for Adobe is around document workflows — both digital and paper. On the desktop, our approach has been to use Acrobat. To date we’ve only sold about 14 million new units of Acrobat. According to Microsoft, there are at least 200 million knowledge workers who have Microsoft Office. We believe at least 60 million of them want to send reliable documents — either through e-mail, or on the web, or through peer-to-peer networks. We think Acrobat is a great solution for that.
We’ve been at this now for 20 years. Everything we do is based on Adobe’s imaging model and rendering engine — that layer between the operating system and the application, that allows us to express information in a way that Microsoft has trouble figuring out. It doesn’t mean Microsoft won’t eventually get it right, but as long as we keep moving ahead rapidly, they’ll never be able to catch up. PDF — which is an open standard — is already adopted by most government agencies around the world, most institutions around the world, and most corporations around the world. It gets harder and harder to displace us as time goes on. And that — combined with just not a lot of affinity towards Microsoft today on the part of their customers and others — gives us a lot of confidence.
With PostScript and PDF we found that publishing the specifications, making them open — but not open standards, but not providing open source — is the right path for us. Once something becomes a standard driven by a standards body, it moves at a glacial pace. And innovation slows down significantly, because you have to get everybody to agree, and there’s lots of compromise. If you make it totally open source, you don’t get a return on investment.