The future of Macromedia's FreeHand and other applications is in doubt.Greeted by near universal surprise, the announced acquisition of Macromedia Inc. by Adobe Systems Inc. may forever change the publishing world. If approved, the Adobe purchase would bring together the two dominant players in the print and Web content creation markets into one blockbuster corporation.
The $3.4 billion all-stock acquisition announcement on April 18 has fueled speculation about the future the graphic arts and document enterprise space, sewn fear among select software users, and made stakeholders wonder what's next.
"The game's on," Charlie Corr, group director at InfoTrends\CAP Ventures, said. "The looming battle between Microsoft [Corp.] Longhorn and Adobe is picking up steam. And this is an example of Adobe raising the stakes of that game in advance of Microsoft coming out with more features in Longhorn," Corr said. "The stakes are now higher."
InfoTrends\CAP Ventures focuses on the digital imaging and document industry, including the broad document enterprise space, not just the graphic arts. Corr said Adobe has been trying for some time to extend its offerings beyond the graphic arts market into territory traditionally dominated by Microsoft. He called the acquisition of Macromedia a bold move and said it signals that Adobe is clearly throwing its hat into the big ring.
"Adobe is really strong in the graphics market, and they're lusting for the enterprise market," Corr said. "In our view, Adobe understands Microsoft more than Microsoft understands Adobe."
Mordy Golding, founder of the New York-based Design Responsibly consultancy and author of numerous books on Adobe desktop publishing software, first thought the early morning announcement was a hoax until he read the news reports.
"It was pretty surprising," Golding said. "After thinking about it for awhile, it makes sense." Golding, who once had been an Adobe employee, said the acquisition is logical if you understand the long-term corporate objectives.
"Adobe's largest growing segment is what they call the 'Communicator At Work.' It's people who never went to design school and they are not artists themselves, but they are being asked to do those kinds of things," Golding said. "Obviously it's nowhere near where the creative pro market is for Adobe, but it is definitely the fastest-growing segment that Adobe has."
The deal may be better for Adobe than for customers, analysts say. Click here to read more.
While the purchase still has to be approved, the announcement has caused select software users to suffer the classic trio of fear, uncertainty and doubt—or FUD—about the future of their preferred applications.
"There are a lot of really loyal [Macromedia] FreeHand users. I'm anxious to see what happens with programs like that," Sally Cox said. Cox, a faculty member of the Art Institute of California in San Diego and an Adobe/Quark Certified Expert and certified trainer in multiple graphic arts applications, said many of her students are concerned for their beloved Macromedia products.
"The biggest concerns are my Dreamweaver, my Flash and FreeHand are going to go away," Cox said.
"I've gotten many calls from several clients already," Golding said. "They are panicking." Golding said a number of clients who use FreeHand had been on the fence about switching to Illustrator or diving into the whole Adobe Creative Suite. Now, with the announced Adobe purchase of Macromedia, Golding said he has talked to clients who think FreeHand will be killed, sold or left to wither, and want to make the transition to Illustrator now.
"If it's going to cost you the same price for Illustrator, InDesign and Photoshop, why should I spend double the amount of money on QuarkXPress and FreeHand if I have to buy Photoshop anyway?" Golding said. "So a lot of companies have been looking at that to save costs. But for them, it was always like a two-year plan or 'We would like to get there one day.' Now, they are calling up and saying, 'We have to move on this much faster.'"
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Corr of InfoTrends pointed to these concerns as something Adobe must address next, and soon. Going forward, Corr said, Adobe should convey to worried consumers a road map for "product rationalization" (changes in the product line).
For example, Corr said, Dreamweaver users may be worried about the cherished Web authoring application. Adobe has to allay their worries by communicating a strategy on making rational decisions before consumers lose confidence.
"Too often, companies don't look at the holes in their buckets. That's a hole in the bucket in that I lose confidence and I don't buy anything more," Corr said.
While Adobe will be facing a number of issues, the acquisition of Macromedia will benefit the two companies while posing a challenge to a third player in the desktop publishing market—Quark Inc.
Corr said, "Clearly Adobe has picked up share and they have a broader play [both in multimedia as well as enterprise]. Quark has become sort of a one trick—well arguably, they've always been a one-trick pony."
"If I were Quark, I would be looking for a way to broaden my footprint essentially and align with a bigger, broader play like a Microsoft, who needs help around creative structured documents. If you think about it, that's what they lack. They don't really understand the market," Corr said. "I don't know where they [Quark] go. I don't think it's promising."
Disagreeing with the notion of a Quark and Microsoft marriage, Cox said, "Quark and Microsoft to me are completely different animals. I don't see that as a strong idea to merge the two."
Golding added, "Just the name of the product Microsoft QuarkXPress—those are two words that really frighten me. I think that would kill Quark faster if Microsoft bought it than anything else."
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