Adobe's Narayen sees growth in video, mobile

With its acquisition of Macromedia in late 2005, Adobe Systems won control of the Flash technology that has become a nearly ubiquitous way of authoring, and viewing, interactive and multimedia content on the Web. Now the 25-year-old software company with deep roots in creative applications and an iron grip on electronic documents thanks to its defacto-standard PDF document format, has its eye on development and content presentation across all sorts of platforms and devices.

President and COO Shantanu Narayen, recently sat down with a group of IDG journalists to talk about the opportunities that mobile platforms and digital video present for Adobe. Joined by David Mendels, senior vice president of the enterprise and developer solutions business unit, Narayen also described the company’s hopes for its multiplatform runtime environment, code-named Apollo, that is designed to run Web applications using Flash, Flex, HTML, JavaScript, Ajax, and PDF and is due for public beta release later this year.

IDG: What are the key areas of growth for Adobe?

Narayen: Clearly, the creative customer is still a very important customer to us, and there what we’re trying to do is enable them to create content across print and the Web but also increasingly video and wireless. We’re seeing a tremendous explosion of digital video, which we think is a huge growth area for us. And also wireless, because creating content for wireless devices is very hard. So in the next version of our Creative Suite applications we’re going to be looking to dramatically expand how we can help people create content. This year we’re going to be releasing Creative Suite 3, and Creative Suite 3 will be the first generation of applications that combines products like Photoshop and Illustrator from Adobe, and Dreamweaver and Flash from Macromedia.

We think Apollo is going to enable a new generation of applications that combines the power of the desktop as well as the interactivity and connectedness of the Internet.

IDG: Tell us more about your plans for the mobile data arena.

Narayen: We work a lot with handset manufacturers and operators. The current offerings we have include Flash Lite on the client. Handset manufacturers or operators can provide a really compelling experience, and people using these phones can browse the Web and get Flash content.

What’s even more exciting is that we now have a new service we’re offering through operators called FlashCast. … What we’ve introduced is a new metaphor, a TV-channel-like metaphor, which allows you to have, say, weather or news or sports or specialized channels. You now have the ability to subscribe, all the data is automatically sent down to your phone. We’ve introduced FlashCast services in conjunction with [NTT] DoCoMo. This server-based offering, it’s more subscription based [so] it’s an ongoing revenue stream, for us as well as for the mobile operator.

Moving forward … Apollo, the runtime will also be mobile aware. The benefit to a developer or an enterprise or to an author is, you author once and you have the runtime everywhere, you have the ability to run applications everywhere. So that clearly is why we think that we have the ability to provide all the authoring, all the runtime, and a way to deploy it in a scaleable way in an enterprise.

IDG: How do you see your competitive stance versus Microsoft right now, especially with its Expression Web tool?

Narayen: We certainly compete with Microsoft; however we’ve competed with them in the past, and I think that’s an important thing to also remember. We competed with them in print technology very early on. We competed with them in fonts, we competed with them in imaging for many years. We competed with them on the Web for years, Dreamweaver versus Frontpage. You know, as it relates to the creative community, we still believe we understand that creative community. And that community wants a heterogeneous environment.

Mendels: The fundamental issue is cross-platform. There’s almost no one I talk to who doesn’t want to either be heterogeneous and work on Linux or Mac or Windows, or want the option in the future to do that. … If developers want to build things, express themselves heterogeneously across the Web, across devices, you know, that isn’t Microsoft’s strength. They’ve got a lot of strengths but that’s not their strength. Their big opportunity is people who have a Microsoft end-to-end environment.

IDG: Adobe has a long history as a software company — over the years, how have you seen business models in software change?

Narayen: If you think about the company it’s actually changed very dramatically over these 25 years. We started with a completely royalty model. With Postscript we had HP and IBM and Apple as large customers and that was the business model, royalty based. And we built a very successful applications business on top of that. And then we moved into the enterprise, and that’s license revenue, it’s consulting services, etcetera. … So we already today have some very different business models all sort of coexisting in our overall company’s financial model, which is clearly very successful and profitable one. Clearly, we see the trend towards both delivery of software through hosted mechanisms and subscriptions and the ability to monetize it differently. Second, is the need for us, for a certain set of customers, to not monetize it by charging them for it but through other advertising mechanisms. … It’s the spectrum of delivery and business models. Piracy is huge for us in other countries, and that [advertising-supported model] is a way in certain countries to also monetize.

IDG: What might be some applications you could offer in this way?

Narayen: Well, take video. With YouTube, right now people just have the ability to upload a video. Wouldn’t it be really cool if we provided something that enabled people to do basic video editing through a hosted service, or image editing through a hosted service, or even run your entire enterprise offerings as a hosted service.

(IDG News Service Senior Writer China Martens and Infoworld Assistant News Editor Paul Roberts joined Heichler in conducting the interview in Boston.)

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