Economics & Research Blog
More on the Adobe Kerfuffle
I received quite a few comments from readers about my post here concerning the Adobe/
By Dr. Joe Webb
Published: July 9, 2007
I received quite a few comments from readers about my post here concerning the Adobe/FedExKinko's situation. The "atta boy's" are always nice to get.
I did get a note from a long-time Adobe employee, active in technical conferences with our industry, who corrected me about the company's trade show attendance. It turns out that they have been at the last four Graph Expo events. I apologized for the oversight. I should have checked and not trusted my memory on that. I apologized.
He also noted his and others attendance at conferences as full time employees. I never meant to dispute that, but I have been at events where contractors were sent instead of full-timers. I apologized for my lack of clarity.
I did tell this person that, objectively, Adobe is one of the best run software companies in history (and I wish I bought the stock at $16.50 when I had the chance). For a sense of how bad the software business can be, I strongly recommend the book "In Search of Stupidity: Over 20 Years of High Tech Marketing Disasters", second edition, by Merrill Chapman. That doesn't mean the company doesn't make mistakes, and I believe the company clearly has in this case.
I received another note from a long-time PDF proponent, independently active in implementing the technology with industry vendors and with end users, almost since PDF was introduced.
He said "I feel that many - including you - have missed the very point of what Adobe has done - which is to greatly simplify what thousands of Kinkos customers do daily - print a PDF to their vendor." He went on to explain that there was no intent to get Acrobat users to switch vendors (which I had stated as rather impossible, anyway). He identified many situations where Adobe "invested millions of dollars and man hours helping our industry become more efficient." The examples he cited were good examples of those efforts.
The question is why they would throw all that good will away. Had they created a special Acrobat Reader for FedExKinko's customers to be distributed in their stores and on the Kinko's web sites, there would not have been a problem. But this is generic Acrobat Reader, downloaded from Adobe's own site. There's quite a difference.
In my mind, Adobe still views its role in our industry as a technical one, and not necessarily as a strategic one. That is, it's their job to make their software work in solving production problems that users have in serving their clients. While printers seemed to think that Adobe was a neutral player (because "everyone" uses their products, just like "everyone" breathes air and drinks water), Adobe probably never had that sense at all.
Adobe could play a larger role in the printing industry if it wanted to take that strategic risk. The industry has a great need to adapt the content it works with to the new media world, and is missing that opportunity, regularly. Much like Xerox finally realized it had to create demand for digital printing before printers would buy digital printing equipment, perhaps Adobe can use that same kind of market approach with printers and new media. Adobe does little with shop owners, and I think it would be a great opportunity for them if they did.
I also got some comments about using other software, especially open source. I commented on this in today's column already.
There are quite a few good posts on the PrintCEO Blog and I recommend reading through them.
One of them, from David Watson at Ultimate says: "Just because Joe Webb and others do not like the actions of Adobe, is not a reason to lead an assault on the software industry that specializes in providing solutions to the printing and publishing industry. There are many companies from small to large ones that spend millions in R&D to meet the needs of their customers. The call for widespread support for open source software to be implemented is an indirect call to undermine these many businesses. If successful it would lead to their decline and in many cases demise. Would the printing industry be better off if this happened?"
This misses the point of what open source software is, and I've noted first, that open source probably can't provide the requirements for the industry, and second, that open source requires investment. The revenue stream from open source comes from service, not from sales, and also customizing software for specific clients. IBM, for example, has a very large consulting business based on using open source for many applications. Sun puts up money for OpenOffice, and makes money by selling an enhanced product based on OpenOffice, called StarOffice. Google is a major proponent of open source, financing many projects with computer students and universities in their "Summer of Code" program. As someone who uses much open source software like OpenOffice, Gaim, Firefox, and free software like FoxIt Reader, PDF Creator, Skype, Gnumeric spreadsheet, and others, I can say that this trend will only be growing, especially as Linux grows. We don't see it here in the U.S., but the developing economies are strong adopters of Linux. Even Microsoft mentions the Linux threat in their SEC documents, and sells MS Office licenses in some countries for as little as $3 because OpenOffice and AbiWord and others are so popular (after all, in economies where there is rampant violation of copyrights, open source certainly solves that problem).
This does not mean that there will not be specialty or professional products for which people will pay. Software companies have an entrepreneurial incentive to meet the needs of their customers and find unmet needs in the marketplace that open source does not have. But even the Apple Mac OS is a hybrid, built on an open source form of Unix developed and maintained at the University of California Berkeley campus called FreeBSD. IBM gets its money from support. Canonical Software gets its revenue by subscription for those who want support for their Ubuntu Linux computers (and since Dell is now selling Ubuntu computers, the company is re-selling Canonical support).
As far as me not liking the actions of Adobe, well, Adobe can do whatever they want. They've done pretty well without me. They're only responsible to their stockholders. It's not that I like or don't like their actions. I'm just observing as someone interested in marketing strategy, and i think it's bad long-run strategy. Their market position may be so strong, however, that they can withstand this error by their sheer size and the fact that printers will respond to their customers' needs. That is, because Adobe is so entrenched in the design and production markets, that whether or not printers are mad is tactically meaningless. In that sense, the strategist in me would be in awe, that they could make this kind of decision and tough it out. But I don't think the decision was made in that way. I think they saw a chance to sign a deal with a big company, and they were so focused on that they became myopic to the larger issues. We'll never really know how the decision was made and what went into it.
I'm surprised that no one thinks it's kind of funny that NAPL complained about the FedExKinko's deal, yet as a member benefit for NAPL you get discounts on DHL shipping. They've had it for years, and DHL (when it was Airborne) really worked the trade associations in all industries as a marketing channel for them. No matter what trade association one could join, it seemed they had an Airborne discount program. I know; when my business was a member of the National Association for the Self-Employed, we used Airborne for that very reason. It's not an issue in this situation because the scale is so different, but it is kind of amusing.