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In Midst of Transition- Adobe Systems (Part II)

Continued from Part I

If the early results are any indication, Adobe, has become a model for companies coping with tech’s changing landscape. But the Business transition is easier said – Adobe will have to navigate the rise of cloud, Mobility, social media and highly targeted online advertising. It also pits Adobe against some very well entrenched competition – Microsoft and Apple in productivity programs, IBM and Google in digital marketing.

adobe_cloud
Image Courtesy Fortune

Adobe’s move into digital marketing- which has its roots in the acquisition of Omniture, a web analytics company in 2009 is an equally adroit move. The second leg of Adobe’s strategy re-orientation includes data driven marketing – real-time bidding on Google search ads, targeting display ads using Facebook profiles, analyzing which Tweets or blog posts drive traffic, testing different site designs to see which generate sales. To make those features possible, Adobe has spent $800 million in the last 3 years on acquisitions since Omniture: Day Software for website-content management, Demdex for ad targeting, Efficient Frontier for search and social media ad exchanges, and Auditude for inserting ads inside streaming videos. According to Gartner, marketing budgets will grow 9% this year, compared with 4.7% for IT. Adobe wants to benefit from that growth by selling marketing services and software simultaneously. Thus, Adobe tools once relied on just for creating a website, have become much more useful as a digital marketing suite.

Death of Adobe Flash

Still, Adobe’s marketing push means going up against deep-pocketed companies like IBM, Microsoft, Oracle, and Google — all of which are more experienced in the enterprise software market. The next year or so will be critical for Adobe as it changes tracks and dons a new gear. It is a risk but then its vastly better than waiting for the emminent death of Adobe Flash.Adobe’s post-Flash strategy was announced in November 2011, alongside the restructuring that made digital marketing and Creative Cloud the company’s top priorities Adobe saw the writing on the wall and conciously anchored itself on the Creative Cloud and Digital Marketing as the next streams of business. Now we await the new Adobe!

In Midst of Transition- Adobe Systems (Part I)

In the age of Cloud,Mobility,Social Media and altering business models,Companies that simply try to preserve the status quo will fail – Inspired

Adobe is the midst of transition would inspire many a case studies. A company that epitomized Shrink Wrapped High Quality Software is working on complete re-doing of its business and revenue models with an eye on the future. Historically, Adobe has been a productivity suite company with its software being centred around enterprises, film-makers, webmasters and content creators and it has done well till recent times. Not wishing to be caught on the wrong foot holding on to status quo, Adobe has readied and implemented a radical change in its business model- It has embraced the cloud based distribution and digital marketing and is phasing out the CD based version of “pay beforehand $1400-$2400” software distribution to Software in the cloud, monthly subscription service. This sachet service works three ways – It steadies revenue per month, it reduces piracy (Adobe was losing a reported $1bn to piracy of its software) and it also increases penetration (The move to subscriptions is a clever and thoughtful way to lower the price point). This model works on a $20-$50 subscription model – and this would bring 325K subs by end of 2012 as per Adobe. Lready Adobe has a million free memberships on its Cloud.The current onboarding rate is 11K per week. Overall average revenue per user is 20% higher compared with the old product. That number will rise even further, the company says, because it is much more likely to sell support services, website hosting, or server management to cloud customers. Already Adobe is augmenting its cloud product by addition of features and functionalities such as Creative Cloud for teams, making it easy (collaborate effort); Adobe Muse (For creation of Mobile websites); Creative Cloud Connection for desktop synching and collaborative sharing;Creative Cloud Training; and demonstrating the unlimited access to the Digital Publishing technology used by major publishers to create interactive content for the smartphones and tablets.

Adobe

Sure this audacious moved spooked the stock which lost steam in 2011 but it is back in action and has traced a healthy recovery. The stock is way behind its historic highs of $47.9- however at $35.5 it is trading 47% above its 2011 trough of $24.17. Even while the stock is underperforming as per analyst’s expectations- the 3Q, 2012 profits have reversed a trend of 3 quarters of dipping profits. In the most recent quarter, profit increased by 3.2% year-over-year. Looking back further, profit dropped 2.4% in the second quarter, 21.1% in the first quarter and 35.4% in the fourth quarter of the last fiscal year. The turnaround seems to be working for Adobe and we would get to know more about this in time. As for the shift from boxed software to subscriptions: It is far from over. In fact, it is the company’s greatest source of uncertainty.

This Post is continued in Part II

Apple’s social layer: Come alive in iOS5?

Ping was Apple’s first effort at get a Facebook like network of users going for itself and it depended on its Music streaming services from the cloud, which was led by its acquisition of Lala. However Ping hasn’t really taken off inspite of the success of the iPad, iPhone and now the Apple TV. So, this time around Apple reloads its effort at Social Networking and in full measure. By full measure, I only mean that Apple is not just depending on Music streaming services from the cloud, it is putting a social layer in iOS 5.0. Expect a few vestiges of this service to surface in iOS 4.3 which should be round the corner. Essentially the dots that Apple would be joining to showcase this layer is as follows:

1. “Find my Friends” service which should be an integration of the phonebook and maps. Apple also has a patent on something called the iGroups, which should in a lot of measures be close to Facebook
2. The iOS 4.3 Beta release showcases the Media Stream service which in its present version is limited to Photo Streams only! Knowing Apple iOS 5.0 would integrate Video Streaming/ Sharing and Music Sharing/Streaming. Out here, Apple has Lala’s expertise for the Music bit.
3. Thirdly, it is expected that all or a significant bit of Apple’s social services will be cloud based. Thus the experience is customized for the user. Apple calls this the MobileMe- a users personalized experiences hosted and streamed from the crowd across all Apple devices.

Putting all these services in a single Interface is where Apple’s legendary prowess with interfaces could really make the experience out of this world. Apple has a reference from the Kin Studio which does all the above listed and More. Microsoft may have dropped Kin, but Apple could take a leaf from Kin’s book to deliver outstanding social networking experience across devices and services. Lets hope to see the Apple magic soon.

Office in the web:Here comes Microsoft Gazelle?

Posted in Computing and Operating Systems, The cloud and the open source by Manas Ganguly on July 10, 2009

Google’s announcement on the Chrome OS is significant and yet very timely is very curious. “Curious” because on Monday, the 13th July 2009, Microsoft is set to unveil its plans to counter the attack Google previously had launched on it with Google Docs at Microsoft’s Worldwide Partner Conference in New Orleans.

Microsoft Office is “going” to the cloud. The new version of Office, syncs with the cloud, and has the ability to use the cloud without any software. 

Earlier, Microsoft was rumored to have a top secret project which was code-named “Gazelle.”  Microsoft would run the “new project” in browsers beyond just IE.

So yes, it looks like the  Office Web that was first talked about at PDC last year.

And it’s possible that Microsoft could unveil that this new web-based Office will reside on the great domain, Office.com. That site is clearly going through a transition to new ownership right now, and that would make a lot of sense.

Office is obviously the 900-pound gorilla that Google is attempting to slay with Google Docs, but a 900-pound gorilla with a matching web offering will be a lot tougher. And that’s likely why Google wanted to get its own uppercut in first this week. And it’s a strong one. But now Microsoft is going to have to come up with some answers to how it can counter Chrome OS, rather than focus on talking about the new Office.

Microsoft, Google and Ovi: The Error list!

Posted in The cloud and the open source by Manas Ganguly on February 13, 2009

Less than 2 days back, i had blogged about the fallibilities of the super corportaions: Microsoft and Google. http://technologyandtelecom.blogspot.com/2009/02/even-invincible-and-infallible.html. Interestingly enough Nokia’s foray into online services and application, Ovi has fallen into the list of goofers! This happened when a recent server crash lost all unsynched data on Ovi. This unsynched data is dated from January 23rd 2009 to Febrauary 9th, 2009. This means any data uploaded by the consumer from 23rd Janaury 2009 onwards would not have been saved.

Ovi is Nokia’s foray into internet services through the Nokia devices. Apart From Nokia’s Ovi, Apple’s Mobileme and Microsoft’s My Phone service (to debut) use the cloud to store data uploaded by the customer! While the number of affected users is limited, because of Ovi’s small userbase, it is worth questioning what would happen if for some reason a Facebook would have such a failure.

The conclusion here for the user is: Dont trust the cloud for everything. It is also wise to have a back up local hard disk for your data.

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