In the technology industry, you can be pretty sure you've hit the big time when Microsoft develops a product specifically to compete with you.
That's the position Adobe Systems found itself in this year, when Microsoft developed a new cross-platform browser technology called Silverlight to rival Adobe's Flash, the de facto standard for developing and delivering video and multimedia content on the Web.
Adobe is exiting the year not only as the company of choice for creative professionals everywhere, but as an influential force to be reckoned with and a power player alongside Apple and Google, the companies leading the consumer-savvy, multimedia-friendly Internet wave of Web 2.0.
Over its 25 years, Adobe -- a company known less for its dazzle than its dependability -- has quietly turned itself into a multibillion-dollar software vendor on the strength of technologies that have become essential to computer users. Creative professionals would be lost without the graphic-design tools Photoshop and Illustrator, and Adobe Acrobat and PDF have made it easy for everyone to share documents cross-platform.
But with its acquisition of Macromedia two years ago, Adobe also took on another role -- as pioneer of providing a next-generation platform for developing rich Internet applications. RIAs, as they're called, provide more intuitive and multimedia-rich user experiences on the Web than typical client/server or desktop applications, and are now in high demand as users expect more from their multimedia Web experiences with the rise in popularity of sites like YouTube and Facebook.
Still, though the proud owner of PDF and Flash, two of the most ubiquitous technologies in the history of desktop computers, Adobe has never enjoyed the same powerful brand recognition as contemporaries that have also built widely used technology. While Google's search engine inspired the addition of the word "google" in the Merriam-Webster dictionary, Adobe's technologies have always spoken louder than the company's name itself.
"Adobe is not a real sexy brand," acknowledged Keith Cutcliffe, a professional Web designer and developer who uses the company's software.
Indeed, Anthony Franco, president of Denver-based application design and development firm EffectiveUI, said his company leads customer engagements by talking about the Flash Player, not necessarily Adobe itself, because the technology is so well-known. "It's the brand recognition of the Flash Player first, then we connect the dots," he said.
But that has begun to change. Adobe took charge of the Macromedia acquisition this year, eliminating that company's brand and merging its own long-popular graphics tools with Web-design tools acquired from Macromedia, like Dreamweaver and the aforementioned Flash, into Creative Suite 3.
To Melissa Webster, program vice president at IDC, Adobe's purchase of Macromedia was "more like a merger than an acquisition" due to how gracefully Adobe integrated the technology and former Macromedia executives like Adobe Chief Software Architect Kevin Lynch into the fold. She said the company's skillful execution of the deal also proved it is capable of making significant acquisitions work, which paves the way for more purchases in the future.
Ron Schmelzer, senior analyst and founder of research firm ZapThink, said Adobe handled the Macromedia deal so smoothly and the acquisition merged such complementary technologies, "it's almost hard to believe that Flash and the other [Macromedia products] were ever separate from Adobe products."
This year Adobe also built a connection between the Web and the desktop by introducing the Adobe Integrated Runtime (AIR), a technology that leverages the Flash player to bring Web applications to the desktop using the same developer code. AIR, which is now in beta and will be available in full release early next year, will drive the company's strategy to move RIAs from the Web and bring the same user experience to the desktop.
Microsoft with Silverlight aims, in a sense, to do the opposite. With technology, built on the Windows Presentation Foundation graphics layer of the Vista OS, Microsoft hopes to enable its formidable .NET and Windows developer base to build RIAs. While Adobe has a solid lock on the RIA tools market for now, moving to the desktop and into the domain of Microsoft is a strategy that will pose challenges, said Toby Bell, research vice president at Gartner.
"It hasn't yet been proven that Adobe has the enterprise relationships and ecosystem of partnerships [that Microsoft does]," Bell said. "All the things Microsoft brings to the table, Adobe is still developing."