…Conventional wisdom says that Adobe needs this acquisition to bulk-up for the inevitable conflict to come with Microsoft. Conventional wisdom is occasionally wrong, however. I’m not saying that the acquisition makes no sense. Quite the contrary, I support it. But the lack of competition from Microsoft in Adobe’s traditional graphics markets comes down primarily to Bill Gates realizing that Microsoft simply hasn’t been in a position to compete with Adobe on a technology-for-technology basis. Gates tried to undercut Adobe’s PostScript with Microsoft’s TrueType fonts back in the late 1980s and was taken to the woodshed by Adobe. The professional graphics market wasn’t willing to give Microsoft the three tries it generally needs to get something right.
What’s changed is not the companies (brain-for-brain Adobe is still smarter in its niche), but the market. Microsoft’s endless quest for new revenue lines has settled on PDF as a target for its new Metro product, not just for graphics professionals, but for all of us.
The other thing that has changed is the mobile market, especially mobile phones — the PCs of tomorrow. Macromedia is making progress in the phone market and Adobe, for the most part, isn’t, hence the acquisition.
So it is a good deal all around, especially if Adobe can learn from Macromedia how to have fun.
But let’s get back to Flash for a moment, because I really do believe it is the key to this deal. What’s key about Flash is not just that it is installed on nearly every computer in the world, and that its influence is extending now into mobile phones. What’s key is that we all upgrade to the latest version of Flash as a matter of course, making it the ideal Trojan horse program of all time.
Let’s say Adobe/Macromedia had some little bit of code – a VoIP client, for example — they wanted to bring to market. Just make it part of the next version of Flash. Over the course of a few months and practically without effort, that little program would be installed and ready to go in hundreds of millions of computers. Then all Adobe would have to do is to announce it and the service could be up and running practically overnight. That’s the kind of market clout that not even Microsoft has. And that’s what makes Macromedia a bargain for Adobe even at $3.4 billion.