Impacts of the Adobe / Macromedia Merger

Adobe announced today the acquisition of long time rival Macromedia for an estimated $3.4 billion. The merger represents a fusion between two companies which combined span the full scope of publishing software - print, internet, multimedia, and portables devices.


Historically Speaking

Adobe made its name over 20 years ago with its Macintosh-centric software - PageMaker (and, more recently with GoDesign), Photoshop and Illustrator - becoming synonymous with desktop publishing. While Adobe has a firm hold on the portal document niche with PDF, its other offerings on the 'net side of the publishing world - GoLive, ImageReady, and SVG viewer - have essentially been also-rans behind Macromedia's blockbuster Dreamweaver, Fireworks and Flash products.

Macromedia, which had its roots in computer animation, multimedia and CD-ROM production in the 80's with Director, has historically showed a more nimble approach to changing company direction in the face of new technologies, riding the burgeoning internet explosion of the mid-to-late 90's with its aforementioned web-centric publishing tools. More recently the company has demonstrated clear leadership in porting Flash to portables, tapping into the ever-growing cellular phone market. However, as with Adobe's forays into web publishing tools, Macromedia has historically been less successful penetrating the desktop publishing market dominated by Adobe.

Motivation

Adobe's motivation for the acquisition of Macromedia is clearly the former's market penetration in the domains of internet and portable device publishing, areas which have never been Adobe's forte. The official press release itself puts the focus on absorbing Macromedia's rich interactive media technology, rather than on the expansion of Adobe's core publishing business. Anti-trust considerations notwithstanding, the collective prowess resulting from this merger creates an organization without a single true competitor from any of the major IT companies.


Market Realities

That being said, the future success for Adobe/Macromedia is not guaranteed - while there may not be a single direct competitor, the combined firm could suffer death from a thousand cuts.

Flash may have a dedicated following among web designers and corporations desiring TV-like advertising for their online product catalogues, that same enthusiasm is not present within the development community at large. Disdain of Flash results from a variety of reasons; chiefly, the format is not document-centric, creating problems of usability for certain types of users (esp. handicapped) and uses (searching - though Google seems to have cracked that nut; viewing in text-only browsers, etc.). Development trends always begin with the developer. Without buy-in from the community, Flash runs the risk of not escaping its castigation as a designer-only tool. Though lacking the polished interface of Flash, Dynamic HTML - and more recently AJAX - present clear alternatives to providing similar rich application interfaces within a website, while simultaneously evading the oft-cited usability criticisms.

Another uncertainty is the future of ColdFusion, the server-side programming language created by Allaire and acquired by Macromedia in 2000. Lauded for its ease-of-use in rapidly developing database-driven websites during the height of the dot-com boom, these days ColdFusion is affronted by several competitors from the closed and open source camps alike. Macromedia attempted to breathe new life into the platform by refactoring the processing to run over J2EE, with the hopes that the expanding enterprise reliance on Java would help buoy sales. Unfortunately for Macromedia, parallel developments in the Java community with Tag libraries - which effectively mirror the tag-like structure of CFML - worked to deprecate the perceived value of the ColdFusion platform, fostering the perception at an enterprise level that ColdFusion's feature set was essentially superfluous to the functionality already available in the J2EE spec. After the dot-com bust, licensing fees associated with ColdFusion became less attractive to Macromedia's target customer - small-to-medium business needing to quickly launch web portals. Open source alternatives built over the LAMP technology stack (Linux, Apache, MySQL, {PHP|Perl|Python}) quickly consumed ColdFusion's market share in this space. Macromedia itself has in a way already conceded defeat in this area, recently focusing more on the Flex product, which works to provide a rich UI tier dependent on Flash and pure Java rather than ColdFusion for its underpinnings. When a company chooses not to eat its own dog food, it is only a matter of time before it stops producing the dog food altogether.


The Next 12 Months

The twelve months following a merger are often the most tumultuous, as the two companies begin to integrate their various internal business practices, cultures, workforce, and product set. Focusing on how the interplay and integration between Adobe and Macromedia's myriad product offerings will play out, here are my predictions for the near-future in the combined company:

  • Integrated Flash/PDF/ColdFusion Content Server
    Synergies abound. Adobe will push hard to being integrating its sole viable internet offering - PDF - with Macromedia's Flash over ColdFusion. Slower to come will be integration between PDF and Flash at an API level, though doing so would provide such solutions as printable and downloadable pages and forms from within a Flash-built website. I would expect to see this as an expansion of Macromedia's Flex platform.

  • Photoshop, Illustrator, Studio MX Available on Linux
    The push to port the combined company's core product offerings to Linux will be more of a focus. Early signs of this effort can be seen in Adobe's release of the PDF Reader for Linux; Macromedia already offers a Flash player for Linux, and has provided some inkling as to its product strategy for the open source operating system in previous statements. Ratcheting up market share will be a top priority for the new conglomerate; making an aggressive push into the expanding desktop Linux space should be a core strategy to that end. Additionally, whereas Adobe may have been reticent to launch such a campaign, their Macromedia brethren are historically more open to new markets, with a willingness to embrace the unknown. Hopefully this attitude isn't part of what is lost in the merger.

  • IDE Plug-ins for Flash, WYSIWYG HTML Editing
    Rather than play hardball with the major IDE vendors, Adobe will work on creating Eclipse, NetBeans and Visual Studio.NET plug-ins to afford developers using those IDEs similar Flash and WYSIWYG HTML editing capabilities as can be found in the Studio MX family of products. Key to this push is expansion of the number of developers working with Flash interfaces for applications targetted to portable devices. With J2ME and Windows CE development growing, getting Flash tools in the hands of the Java and .NET developers through their own IDEs will become a key strategy for the newly minted Adobe.

  • GoLive, ImageReady and SVG Dropped in Favor of Dreamweaver, Fireworks and Flash; FreeHand Dropped in Favor of Illustrator
    I consider this one low-hanging fruit. Outside of playing lip-service to die hard fans of the Adobe web suite, there is no justifiable reason to continue producing two sets of web publishing software. Look for rapid retirement of Adobe's web offerings in favor of Macromedia's.

    Illustrator has held a sizeable lead over FreeHand since before Macromedia absorbed FH as part of the Altsys buyout.

  • ColdFusion Goes Cold
    I don't believe we'll see this in the next 12 months, but at some point ColdFusion will be cut from the lineup. ColdFusion's justification for existence - rapid development of database-driven websites on a budget - has been replaced by other platforms. In the short term, JRun - Macromedia's forgotten J2EE application server - will be taken off the shelves. Adobe would rather partner with the major J2EE app server vendors - IBM, BEA, Oracle, Sun - on its various server-side product offerings than compete with then on the app server itself. Following this logic, and given the arguments I've already outlined, the ColdFusion reactor will be shut down as well.

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