Staying strong
In the absence of a clear picture of Microsoft's plans, Adobe needs to stay alert and make sure its Acrobat software and PDF-based tools remain relevant, analysts said. That's the focus of a number of initiatives now taking shape at Adobe.
Adobe's PDF was born in 1993, when word-processing software was well-established as a means of creating documents. Adobe capitalised on the fact that there was no easy way to ensure that a document created with one type of software could be read with another.
While several other companies offered competing software for "electronic paper," PDF quickly eclipsed them for a number of reasons.
The decision to give away Acrobat Reader encouraged government agencies to adopt PDF as a universally accessible way to make forms and documents available online. Adobe drew revenue from the Acrobat software needed to output PDF files.
"I remember a lot of conversations a few years ago to the extent of, 'They're giving the Reader away; how are they going to make money off this?'" said David Yockelson, an analyst for research firm Meta Group.
"But making the Reader free really encouraged government and financial services to use PDF, and those are by far the two biggest markets for this kind of publishing," Yockelson said. "Making regulatory documents and tax forms available online really helped establish PDF."
For most of the 1990s, Adobe was content to draw a modest but reliable profit from sales of the Acrobat output software and watch PDF's market dominance grow. Over the last few years, however, pressure has grown both inside and outside the company to better capitalise on Acrobat Reader's position as one of the most widely distributed applications in the world.
Adobe developers have responded by gradually increasing the capabilities of PDF--for instance, by allowing PDF documents to accept electronic signatures. Those efforts have intensified over the past few months.
"At one point, Acrobat was known as the 'roach motel' of data formats--you could get data in, but you couldn't get it out," Adobe CEO Bruce Chizen said. "That's not true anymore. Acrobat is this big container for doing things."
More ambitious changes have come from Adobe's acquisition of Accelio in February. The company's software is used to harvest data from electronic forms. Adobe's versions of Accelio products will use PDF as a framework for creating electronic documents that can shuttle data to and from common business applications.
Adobe also recently released server products for Acrobat that add capabilities based on XML--the lingua franca of Web services--to make PDF documents truly interactive, able to both accept data from readers and share it with others.
"You can extend enterprise information not only to your customers and partners, but to their customers and partners," said Ivan Koon, senior vice president of Adobe's ePaper division.
Koon cited the example of a mortgage loan agreement. A bank could e-mail a PDF version of the form to a customer. The customer would fill it in using the newly expanded Acrobat Reader and e-mail it back to the bank, which could disperse the submitted data using the new server tools.
Forrester Research analyst John Dalton said the strategy makes sense. "With the new Acrobat products, it's easier for data that goes into a PDF to come out of a PDF," he said.
"You can route that data through a business process much more easily. That's a huge sinkhole in most companies--document intensive processes. The end game is to automate these really tedious processes, and there's only a handful of guys who can do that really painlessly. Adobe's one of them."
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