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Adobe may divest software after Macromedia merger

updated 05:55 pm EDT, Tue May 10, 2005

Adobe/Macromedia merger

Adobe will likely divest itself of several products following the proposed acquisition of Macromedia announced earlier this year, according to NPD Techworld. Adobe Systems announced its intent to purchase Macromedia for $3.4 billion in stock, and if approved, will acquire Macromedia's leading Web development and multimedia products, as well as its solutions in the mobile software, Web conferencing, and application development space (see our on the acquisition). Most importantly, NPD says, Adobe will gain control of the Macromedia Flash platform, the most widely available solution for delivering rich media on the Web. "Aside from the software titles, we believe the most important asset that Adobe will gain in the acquisition is control of the Flash platform itself."

Similar to PDF's ubiquity in both print and general office workflows, Flash Player has become the "leading platform for delivering rich media on the Web." In a quarterly custom research study that NPD conducts for Macromedia, it was determined that over 95% of PCs connected to the Internet have Flash 6 or higher installed. NPD believes that Adobe will not only leverage the Flash platform to drive sales of its graphics and digital video editing and compositing applications, but will use Flash to extend the reach of its "intelligent document" platform automating enterprise business processes as well.

Another key driver in Adobe's decision was Macromedia's new offerings in the mobile software
segment, including Flash Lite, a multimedia platform for mobile phones, and FlashCast, a
platform to stream channel-based subscription content to mobile phones. "Adobe has been trying
for years to offer solutions that would enable customers to communicate anytime, anywhere, on
any device, but Macromedia has been the vendor that has gained traction in the mobile software

The Impact on Customers

NPD believes that customers will "most definitely" benefit from the merger, especially when it comes to product integration. According to the report, creative professionals complained "for years" about the inability of the products they use to work together efficiently. As a result, Adobe has worked to make its suite of products integrated, and Macromedia has done the same within its product line. Because the products of both companies do not entirely overlap, NPD believes users want integration between certain Macromedia and Adobe offerings. For example, integration between Adobe Illustrator and Macromedia Flash would enable animators, Web designers and advertising professionals to "streamline their workflows." Although integrating and consolidating the Adobe and Macromedia lines will take time, NPD believes that by 2008, "customers can expect true integration features to emerge in the applications Adobe acquires
from Macromedia."

Despite the elimination of the element of competition between the two firms, customers will not be subject to dramatically higher prices or alack of innovation, NPD insists. Not only are most customers "locked in" to using the tools from a particular vendor, but the professional products produced by both firms are "mature, feature rich, and so expensive compared to other point products, that existing customers often can't justify spending money on a new version of a particular product or a suite unless it helps them do their jobs demonstrably better." Thus, both Adobe and Macromedia are not only "forced to keep their prices reasonable, but they are forced to adopt a strategy of rapid innovation in order to generate demand for future versions of the product." NPD says evidence of this is clear when looking at Adobe's revamped collection strategy. "Not only has Adobe lowered the price of some of its leading point products, but Adobe has changed the
structure and the pricing of its various tool suites in order togenerate more demand for its offerings."

Changing product line

NPD predicts that Photoshop and Dreamweaver customers will be least affected by the merger, as these products will remain largely intact. In the short run, the customer using both Photoshop and Dreamweaver "won't need to do anything differently." Later, this customer will "probably be able to buy a single suite of tools from Adobe, resulting in significant cost savings." Over the long run, Adobe will likely "offer this customer a suite of tightly integrated solutions, built on an ever increasing number of core technologies and common user interface elements." Dreamweaver may eventually be "forced to do things slightly different" as Adobe modifies the application conform to its interface standards, but NPD expects Adobe will "reduce the pain" for the Dreamweaver customer by offering Quark XPress keyboard shortcuts and more.

GoLive customers may see the product sold to another vendor, according to NPD. Not only would Dreamweaver replace GoLive as Adobe's Web site creation package, but FTC regulations will likely require the sale of GoLive. "While future versions of GoLive will no doubt still be appealing to designers, the eventual integration of Dreamweaver with other Adobe programs, not to mention Dreamweaver's inclusion in future versions of Creative Suite, will entice many users to make the

Fireworks/FreeHand customers may also see these products divested: as with GoLive, the FTC
is likely to mandate that Adobe sell Fireworks and FreeHand to a third party. "These customers
will be most adversely affected by the acquisition," NPD says. "Although they won't have to do
anything in the short term, if customers have standardized on Fireworks or FreeHand workflows,
they should strongly consider migrating to Photoshop and Illustrator over the medium term,
especially if they use Dreamweaver or Flash extensively."

Current market share figures

2004 U.S. professional graphics and Web market share figures show Photoshop, Illustrator, Dreamweaver, and Flash as leaders in their respective markets, so it comes as no surprise that the four applications are expected to survive the merger, while Fireworks, Freehand, and GoLive will be eliminated.

  • Adobe Photoshop: 82.2 percent
  • Macromedia Fireworks: 11.5 percent

  • Adobe Illustrator: 71.1 percent
  • Macromedia Freehand: 18.1 percent

  • Adobe GoLive: 40.8 percent
  • Macromedia Dreamweaver: 59.2 percent

  • Macromedia Flash: 69.1 percent
    (Adobe has no 2D animation suite)
    (Corel has 30.9 percent)

    by MacNN Staff


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    1. the Rebel

      Joined: Dec 1969


      Says who?

      I understand that an Adobe/Macromedia merger would likely result in divestment of some applications, but I do not see the basis for selling off GoLive instead selling off Dreamweaver.

      Regardless of marketshare, GoLive CS2 is the better, more robust, more mature product.

      Besides, according to the article, the marketshare is pretty close anyway : Adobe GoLive: 40.8 percent Macromedia Dreamweaver: 59.2 percent

      The main reason that some people choose Dreamweaver over GoLive is because of the integration with Flash. However, Dreamweaver is poorly integrated with Photoshop or Illustrator. GoLive is already well integrated into the Adobe workflow. It would be a whole lot simpler and make a whole lot more sense to integrate Flash with GoLive rather than go the longer route of trying to integrate Dreamweaver into the Adobe workflow.

    1. eggman

      Joined: Dec 1969


      Customers Lose

      Despite the premise of this article that says the merger will be good for customers, I disagree. Strongly.

      As a longtime Macromedia customer, I've spent years developing skills on two of the products that will likely be divested: Fireworks and FreeHand. While touting the improved workflow of better integration between Illustrator and Flash, they ignore that there is already execellent interoperability among FreeHand and Flash, FreeHand and Fireworks, Fireworks and Dreamweaver (which interoperate so well that I belive it will be years before Photoshop/ImageReady are adapted to fulfill this purpose as admirably), and Fireworks and Flash.

      Also, many, many illustrators prefer FreeHand to Illustrator... as being more intuitive to use, and being capable of multipage compositions... something that Illustrator is incapable of, requiring instead purchase and use of yet another Adobe product, InDesign.

      If sold to a third party, or divested into oblivion, FreeHand and Fireworks will steadily decline in interoperability with new features and capabilities of Dreamweaver and Flash... at the same time that Adobe will be trying to make the square pegs of its product line fit neatly into the round holes of Macromedia's.

      As someone who uses Dreamweaver, Photoshop, Fireworks, FreeHand and Flash on a daily basis in a high-pressure production environment, I'm facing loss of equity in the years of skills acquisition on applications now consigned to oblivion, at the same time that I'll be forced to retrain instead on applications that I've already evaluated and found less than desirable for my purposes.

      Thanks Adobe. Thanks Macromedia.

    1. farmerbob

      Joined: Dec 1969


      A Gain for Users?

      The first piece of software I ever had was given to me by a VP at a now gone Baby Bell. It was Aldus Freehand 3.0. This was in the mid 80's and I have used it faithfully ever since. Only because first, I was in the corporate sector, Macs were just coming out, and I needed a reason to switch my people from creating high end artwork by hand to computer and this was my ticket. My substantiation had to be solid, and Freehand was. Then several years later I owned a Service Bureau, Freehand was more prominent than Illustrator, and its files always flew right through the imagers, while Illustrator files were nothing but a pain. Also we would run mission critical photo pieces by importing them into Freehand. Not only did they run problem free and fast at very high resolutions and large sizes, but with severely more accurate color when printed by any device that the negatives were cut for or when output to large format or color repro devices than Illustrator or Photoshop. And now with my own advertising agency I need every thing that is done to be as universal in integration and time effective as possible and to this day it's Freehand that does it. Illustrator is very laborious and is not as enduser friendly.

      I have always thought of Illustrator as a fine arts tool and Freehand as a commercial arts tool, that can make any adjustment to an Illustrator file faster than in Illustrator and resave it as Illustrator and no one knows the better. But it is obvious that Freehand is the Red Headed Stepchild for Macromedia. They have yet to bring it to Studio status and haven't really updated it in a long while. I have worked with Macromedia product reps in the past to troubleshoot problems, and there was always an aire of apathy as far as Freehand was concerned.

      That's fine, sell off Freehand and give it the opportunity for a good, better than Macromedia, hopefully as good as Aldus, home. That will make this merger the best thing that could ever happen. I'll have Photoshop, Flash, Dreamweaver, and Freehand. Utopia.

    1. farmerbob

      Joined: Dec 1969


      P.S. or AND . . . . . .

      Adobe does have a really great 2D Animation Creation Suite and that is LiveMotion (OSX compatible). Even now it has better easier applied effects, easier more coherent timeline, and is raster based so it deals with photo images far better than Flash does now. Adobe blew it when they let LM2 drop.

      Also over the past couple of months our clientele (Fortune 100) are one by one asking that we remove or convert to still image all the Flash pieces that they just had to have this time last year. They are getting click through reports and complaints that the pieces, even small fast loading ones, take to long to load and people are not waiting. It is being seen by research groups that the average web surfer has gotten impatient and will no longer tolerate the wait for nor really cares for Flash and will move on very quickly. Even with the newer "high speed" (dial up) connection companies all the rage, most bandwidth is still low and not really Flash friendly. Plus Flash has been over used to the point of abuse. Even this site has an over abundance of obnoxious Flash in your face while you try to read the articles. Which is in the Top 5 on the list of the Top 10 Things that can Ruin a Website.

    1. GRX

      Joined: Dec 1969


      Keep GoLive?!

      I've tried to roll out GoLive (versions 6, 7 and 8) a number of times at my company, but there are too many showstopping bugs. I've really tried! I love the idea of Photoshop integration and the idea of using Version Cue as a DAV server / versioning system.

      Here are the show-stoppers for us:

      1. If you switch between source, layout, or preview you will LOSE ALL OF YOUR UNDOS!!!! That's insane! GoLive CS2 is version 8 of the program and it STILL has this problem. How do people deal with this in a production enviroment? I've mentioned this on the Adobe support forums and I was informed by Adobe that "real professionals don't need undos". Are you f*cking kidding me? Then why does InDesign (correctly) tout 99 undos vs. Quark? Experimentation is part of the design process, and without undos GoLive is dead in the water.

      2. The CSS support in GoLive sucks! Pages which render perfectly in Safari, Opera, Firefox, Netscape, Internet Explorer, and Omniweb on all available platforms WILL RENDER LIKE A$$ in GoLive!!! Again, without proper CSS support, GoLive is unusable in my company.

      Sorry for the rant, but I'd really like to be able to use GoLIve CS2. How do other people deal with the above problems?

    1. paulc

      Joined: Dec 1969



      Got an e-mail a few days ago about all sales and support for Fontographer has been switched to FontLab... i.e. they have acquired it. FYI, Fontographer along with Freehand were both products originally born at Altsys.

    1. jnicholas

      Joined: Dec 1969


      Re: Says who?

      >>>the marketshare is pretty close anyway : Adobe GoLive: 40.8 percent Macromedia Dreamweaver: 59.2 percent

      Don't judge this just by sales since both products are bundled, I wouldn't be surprised if a large percentage of GoLive sales are just people who got it with Photoshop/Illustrator and have never used it.

      Dreamweaver is used a lot more by professional web development teams and is also behind other products like Flex Builder, Contribute and MM's Web Publishing System. So I expect DW to be the core remaining app and just gain many GoLive interface features and Adobe Workflow features.

      I have a harder time imagining Fireworks as a non-MM product. While I really like its vector tools and slicing, its main feature is the tight integration with Dreamweaver (exporting directly to libraries, round-trip editing and writing the same javascript) so I don't see how it will remain compelling app without that.

      Additionally, the team that built Fireworks and Freehand has already been dropped by MM when they closed their Dallas office (the former Altsys team). While it's easy to just say Company X has product Y and can do Z, it still comes down the people who know the code at some point. Someone just buying the dead source code to a product can't just run with it.

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