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This week at Adobe's San Francisco offices, David Macy got up before an audience of reviewers to show off a suite of applications unlike anything Adobe has done before.
The six apps Macy showed off are all designed with a touch interface, and at first will run only on tablets using Google's Android operating system. The apps - which include the first touch version of Photoshop - are bound together by what Adobe calls "Creative Cloud," a service that synchronizes creative work across a broad range of devices. The move comes as Adobe works to move customers away from a one-time purchase of its category-leading Creative Suite in favor of monthly subscriptions, which it introduced in April.
The venerable San Jose software company's rapid transformation got somewhat lost this week amid chatter about its recent decision to quit development of its Flash Player for mobile devices in favor of the more open HTML5 standard. But taken together, analysts and academics say, Adobe's moves this year show a company working aggressively to make itself ready for a largely mobile, cloud-centered future.
"We are in the midst of a fundamental transformation of Adobe from the world of software in boxes to the world of the cloud, touch interfaces on devices, and social connections," said the company's chief technical officer, Kevin Lynch, in an e-mail. "Creative Cloud is important to Adobe as it represents the next generation of how we see creative software being acquired and used, blending services in the cloud with creative apps on devices and PCs, along with connecting the creative community."
To get there, Adobe has set ambitious goals. By 2015, the company says half its revenue will come from subscriptions - representing 800,000 users. Over time, the company expects 100 percent of revenues from its digital media division to come from subscriptions.
The company has also expanded its digital marketing business, which helps companies build and manage campaigns, through a series of acquisitions and enhancements to its product lineup.
"In a way, it's hitting the reset button," said Josh Olson, an analyst at Edward Jones who tracks Adobe. "Doubling down on a core business, content and a high-growth business in marketing."
Olson said the company had developed a solid strategy, although it could face unpredictable revenues over the next couple of years as it moves toward the new business model.
"It's going to be good for the longer term, but I think we're going to have some volatility, or even some sluggishness, in the short term," Olson said.
Olson said the company could struggle in the short term as revenue fluctuates more than usual. The company reported revenue of $1.1 billion for its most recent quarter, up 2.3 percent from the previous year.
But Adobe executives say they're making progress. Of people who have tried the subscription service since it started this spring, 38 percent are new to Adobe products, the company told analysts last week. And 78 percent of people using the service say they wouldn't have upgraded to the latest version of the creative suite if not for the subscription, the company said.
Still, the new model will represent a shift in thinking for the freelance artists and small businesses that rely on Adobe products. Larger businesses, particularly over the past decade, have become used to subscribing to software rather than buying it - using Salesforce.com for managing customer relationships, for example, or Box.net for storage and collaboration. And consumers are used to online subscriptions for services, like Netflix and Hulu.
But software as a service is still a new idea for many people outside large enterprises. And it's an open question how quickly it will be adopted.
"In a lot of ways that is a bold move forward," said Kendall Whitehouse, director of new media at the Wharton School of the University of Pennsylvania. "They've seen the trends and are going to go full tilt on them. I don't know if there's been anybody that's done it quite as deeply across as broad a product line."
E-mail Casey Newton at cnewton@sfchronicle.com.
http://sfgate.com/cgi-bin/article.cg...BU7Q1LVG9M.DTL
This week at Adobe's San Francisco offices, David Macy got up before an audience of reviewers to show off a suite of applications unlike anything Adobe has done before.
The six apps Macy showed off are all designed with a touch interface, and at first will run only on tablets using Google's Android operating system. The apps - which include the first touch version of Photoshop - are bound together by what Adobe calls "Creative Cloud," a service that synchronizes creative work across a broad range of devices. The move comes as Adobe works to move customers away from a one-time purchase of its category-leading Creative Suite in favor of monthly subscriptions, which it introduced in April.
The venerable San Jose software company's rapid transformation got somewhat lost this week amid chatter about its recent decision to quit development of its Flash Player for mobile devices in favor of the more open HTML5 standard. But taken together, analysts and academics say, Adobe's moves this year show a company working aggressively to make itself ready for a largely mobile, cloud-centered future.
"We are in the midst of a fundamental transformation of Adobe from the world of software in boxes to the world of the cloud, touch interfaces on devices, and social connections," said the company's chief technical officer, Kevin Lynch, in an e-mail. "Creative Cloud is important to Adobe as it represents the next generation of how we see creative software being acquired and used, blending services in the cloud with creative apps on devices and PCs, along with connecting the creative community."
To get there, Adobe has set ambitious goals. By 2015, the company says half its revenue will come from subscriptions - representing 800,000 users. Over time, the company expects 100 percent of revenues from its digital media division to come from subscriptions.
The company has also expanded its digital marketing business, which helps companies build and manage campaigns, through a series of acquisitions and enhancements to its product lineup.
"In a way, it's hitting the reset button," said Josh Olson, an analyst at Edward Jones who tracks Adobe. "Doubling down on a core business, content and a high-growth business in marketing."
Olson said the company had developed a solid strategy, although it could face unpredictable revenues over the next couple of years as it moves toward the new business model.
"It's going to be good for the longer term, but I think we're going to have some volatility, or even some sluggishness, in the short term," Olson said.
Olson said the company could struggle in the short term as revenue fluctuates more than usual. The company reported revenue of $1.1 billion for its most recent quarter, up 2.3 percent from the previous year.
But Adobe executives say they're making progress. Of people who have tried the subscription service since it started this spring, 38 percent are new to Adobe products, the company told analysts last week. And 78 percent of people using the service say they wouldn't have upgraded to the latest version of the creative suite if not for the subscription, the company said.
Still, the new model will represent a shift in thinking for the freelance artists and small businesses that rely on Adobe products. Larger businesses, particularly over the past decade, have become used to subscribing to software rather than buying it - using Salesforce.com for managing customer relationships, for example, or Box.net for storage and collaboration. And consumers are used to online subscriptions for services, like Netflix and Hulu.
But software as a service is still a new idea for many people outside large enterprises. And it's an open question how quickly it will be adopted.
"In a lot of ways that is a bold move forward," said Kendall Whitehouse, director of new media at the Wharton School of the University of Pennsylvania. "They've seen the trends and are going to go full tilt on them. I don't know if there's been anybody that's done it quite as deeply across as broad a product line."
E-mail Casey Newton at cnewton@sfchronicle.com.
http://sfgate.com/cgi-bin/article.cg...BU7Q1LVG9M.DTL