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By Tony Hallett, 9 November 2005 11:55

COMMENT

Microsoft is looming, about to move onto your turf further.
For years now we have been anticipating a move by Microsoft - it's actually taken them a lot longer than I thought it would, especially as related to PDF. Because of that anticipation we set in place a strategy a number of years ago to deal with it. The goal was not only for PDF to become a standard but to make sure we were building applications and tools that did more with PDF than just the creation of it. So when - not if - Microsoft decided to enter, it would be that much more difficult for them. But I am not trying to trivialise that. They are a $40bn software company which the US Department of Justice has declared a monopolist.

But they are fighting on many fronts...
I worry about them, with all the power they have and how much they invest in R&D. I worry about that a lot but they are also big and have a lot of issues: government regulators around the world continue to look at what they're doing closely; the Linux community is providing an operating system that could replace Windows; OpenOffice.org is providing a replacement, potentially, for Microsoft Office; Sun continues to be aggressive with their own servers against Windows servers; they're competing with the likes of a Sony in the video game business and Sony isn't just going to roll over and play dead; Apple will continue to compete with a wave of computing against Microsoft; they have an employee base that is going through change - one time it was an employee base that was built upon hiring the best and the brightest from universities around the world and then rewarding them through stock option appreciation but their stock hasn't appreciated in over five years; their ability to hire the best and the brightest has been reduced significantly because you have companies like Google and to a lesser degree Adobe who end up being more attractive. And then running a $40bn business has its own complexities, especially a company that was very top-down from a Bill Gates/Steve Ballmer perspective.

So those nights where I get up in the middle of the night and think 'OK, they're doing PDF creation' and so on... as I toss and turn and think about those things, then I think about the list I just gave you and go back to sleep. I don't want to give them more credit than they deserve.

How do you feel about Apple's computing business?
They have a very stable, loyal customer base.

Has your relationship with Apple changed, say going back five years?
Going back five years - they've made it much easier because you no longer have to worry about 'Will their customers move over to the Windows platform?' - which would have made Microsoft that much more dominant in our business. Loyal customers, loyal to the Macintosh, is good news for Adobe. The challenge will always be that Apple will look at developing its own software that in some areas will compete with Adobe, as they did in the video area. There will always be that tension. But I look at Apple much more as a friend.

So a strong Apple...
... is a good thing.

How do you feel about Apple on Intel [processors]?
In the long term it's great because it allows production of faster, more powerful computers that can be more affordable than today. Plus, in theory, because we work closely with Intel we should be able to take advantage of the optimisation that we do around Intel at the native level, especially for graphics and video applications. The challenging part will be the switch. It will take coding and compiling time - and that's work.

How much did you know about Apple's move to Intel?
[Apple CEO] Steve Jobs and I have an appropriately close relationship. He shared his plans. A variety of times he broached the subject and right before he announced it he made it clear to me.

What effects does open source have on Adobe?
We've had competitors for a number of years eg KIllustrator for Illustrator, Gimp for Photoshop. We find that as long as we innovate and maintain our quality levels our customers will pay for the commercial product. They want the best. The one risk is that governments end up dictating, saying you can only use open source products, not giving users choice. We like choice. Open source is a problem if we are forced to do open source.

Are you thinking about instances in Korea, Munich...
... in China!

China again.
In China, if they say you can only buy from domestic suppliers that would mean we are out of business there forever.

So is your China set-up part of a charm offensive?
Yeah. We are developing R&D centres there. We sent one of our lead engineers from San Jose, trying to make PDF much more of a standard there. We're looking at doing Chinese localisation there - putting money back into the local economy, working with the government and universities. It's important that we show our job isn't just to extract money from China, that we want to be part of their economy. We have R&D in Hamburg, in Norwich, in India - our job is not to be [just] in the US and [sell] elsewhere.

What does the UK mean to you? Can you learn anything from here?
It's similar to the US in a number of ways e.g. the government sector, where we have [tax authorities] sharing across the US, UK and Australia. Also your financial services organisations are very powerful. There aren't many but they are very large and tend to be global.

And... ?
Of course the other big industry for us is publishing and media. It's unique in the UK in that there are so many different newspapers, magazines and media organisations. You move quicker than just about any place else in the world. For us that's great because we can experiment with you - you are willing to adopt new technologies more quickly. A great example is Glamour magazine - we used that as first test bed for Adobe InDesign. It won a design award and I was able to take that back to Condé Nast in the US - and Hearst and Time Inc - and say 'Look at what these guys have done!'