Will Flex/Flash make Adobe richer?

As any software developer I enjoy working with cool components, and Flex is definitely cool. I also know that Adobe is not a philanthropy firm – they need to make money to stay in business.

Most of Adobe presenters never forget to remind that Flash is ubiquitous (I did not hear this word before applied to any software). There is another ubiquitous product – Microsoft Windows. From the business point of view, the difference between the two is that MS sells Windows, while Flash Player is free, which is great for everyone but Adobe.

There is another company, Sun Microsystems that has ubiquitous free software called Java. While Sun earns its revenues from installing Java in mobile devices, the rest of Java is primarily used to sell servers for free JVMs to run. This does not apply to Flex as Adobe does not sell hardware. It does sell professional services. So I assume Flex can bring more consulting gigs to Adobe, but lots of other independent vendors will compete in this space as well.

Almost forgot about yet another ubiquitous free software: Google search. But these guys sell advertisements.

What would you feel if a couple of guys took the free tool that you’ve created and in no time made $1.65B? Yes, it’s youtube. You do not have to answer. Adobe can be proud of Flash Player… Recently, four senior people including the primary co-creators and architects of Flash Player and ActionScript left Adobe and created Software As Art sturtup… Why? Adobe is a profitable company, Flex is cool, Flash Player 9 is hot, Apollo is coming soon. I can only guess that they also want to capitalize on these great free tools, and it’s easier to do outside of the firm. CFO of the company resigns. For the same reason?
Selling Flex Data Services licenses and professional services will bring in some cash, you can add some peanuts from Charting components, Flex Builder and training. Adobe has excellent software engineers in Flex team. But it’s an open market, and in a year or sooner, other firms will come up with open source or cheaper alternatives to FDS, charting or Flex IDE. What’s left? The mobile devices.
So does ubiquity spells cash? Flash Lite to the rescue!
Yakov

12 thoughts on “Will Flex/Flash make Adobe richer?

  1. It is kinda of interesting that Flash Lite initial cost $10, but now its free.
    http://www.adobe.com/devnet/devices/articles/flashlite_os/flashlite_os.pdf

    Will Adobe ever try and make money of their players? In some regards there is more freedom in building a platform then a toll bridge… They can focus on engineering and not being a troll? Ok all seriousness, it will be interesting if Adobe ever does decide to move into to something different then just software vendor.

  2. YouTube is actually not a bad example as it encourages developers to at least buy couple of copies of Flash, and some streaming servers. What really going to hurt is PhotoshopLite built in Apollo 8 month from now – actuall taking a chunk from the revenue.

    Adobe can stay in software business and keep growing beyond your expectations. They can put a lot of companies out of business while making money – as long as they concentrate on the targets bigger then themselves.
    Here are trivial examples (I will limit myself to Macromedia side):

    Build Adobe Office
    Create direct replacement for Excel, Word and Outlook @19 per copy or per year (with related discounts for goverment and educational sites) – do the math how this model will work in the current market. Provide data/corp email hosting deal with Yahoo or whoever wants to sell it – with integrated spam / virus scanning
    Done with everybodies target #1, moving on

    Build Adobe Server.
    Just bind MediaServer Lite(very limited bandwith ) and Flex Express in virtualized linux package – micro kernel to go into home server or corp infrastructure. With minimal developers support it would put YouTube, Phone, NetFlix and expensive VoIP out of businesses and new businesses – and can be priced based on the bandwidth. With server in homes and push technology, completely new class of services/subscriptions/advertisement can be done. Hardware manufacturers and cable companies would line up for it.

    Build better mose traps. Breeze is a good example of the product you can work into any service/product. I am getting tired og google ads and more acceptable to http://www.msdewey.com/ kind of interaction. Make no mistake – Microsoft is using Adobe Flash technology on msdewey.com to see how to build better mousetraps for Google and Yahoo customers right now – learning the behavioral patterns and online INTERACTIVE selling to the focus group of the whole world using every bit of geographical and other information it can find. Education, publishing, training, personal services, advertisement can build on the top of more interactive web experience – sell aggresively Breeze servers via partners/ISPs (base + bandwidth model again, that’s what ISP are charging anyway ) and use it to cross sell other consumer products – videophones, games, interactive tourist maps, one-on-one sessions.

    Provide cross businesses on the top of that. Rebuild partners program and make it more specialized. Make it really simple for the end-users.

    Oh well, have to go – save the rest of the world

    Sincerely,
    Anatole Tartakovsky

  3. Some thoughts about your “ubiquitous free” software examples

    There is another company, Sun Microsystems that has ubiquitous free software called Java

    Let us be fair. Sun has invented Java, this is a fact. But it was IBM that hardly influenced marketing success of Java. It was IBM subsidiary that created crap like java.uitl.Calendar and java.math.BigDecimal and a lot of classes in J2SE standard library. It was IBM that moved Java towards J2EE and promoted J2EE. So Java belongs to IBM, de-facto.
    Hardly believe that we see any JSR that does not conform to IBM agendas. Do you remember JDO? 😉

    Almost forgot about yet another ubiquitous free software: Google search. But these guys sell advertisements

    C’mon! They sell __analytic results / statistics__ collected with “ubiquitous free” software. I can’t even image how much they earn… But I guess comparing to this, advertisement is like a nickel found on the road vs yearly salary of good IT specialist 😉

    NONE

    Hmm… I’d put a small reference to JBoss here. Yet another “ubiquitous free” software, that allows JBoss LLC company to earn good money from services & support and, moreover, beat commercial vendors like IBM and BEA in Europe.

    VS

  4. The terms ubiquity and success go hand in hand.

    I think the Flash business model is representative of a modern day successful business model.
    YouTube and MySpace followed suit. Free registration, Free upload, Free customization. The result, ubiquity in the marketplace.
    Ubiquity then translating to cashflow.

    It will be interesting to see if the Microsoft model continues to work with the release of Vista.
    Vista is not cheap and the only chance i can see them having of making Vista ubiquitous is pirated copies reaching home users.

    So if the software is to be release free in these modern times, where is the money to be made for software development companies.
    Interesting question?
    Currently the bread and butter for the software industry is the enterprise sector.
    I guess this is where Adobe is planning to cash in from their FDS Clustered servers.

    But there has to be more opportunity.
    Perhaps a different way of thinking, something more righteous perhaps?

  5. [Anatole] “more acceptable to http://www.msdewey.com/ kind of interaction.”

    You are out of your mind, in a bad/nonprofitable way.

    [Bjorn] “The terms ubiquity and success go hand in hand.”

    a very broad generalization, hardy descriptive of the current topology. RSS is ubiquitious, does RSS immediately imply profit?
    Ubiquity and sucess go hand in hand only if there is a viable profit mechanism.

  6. Thats a good question. If they give stuff away free does that help them or hurt them. I say, dont ask. If it was not a good move for them they would not have done it.

    If you look at a university, you see you have constant inflow of income. You have 1000+ students per semester needing PS, AI, DW, In Design, Premeire, Flash, other Adobe software, etc. Then multiply that by 10000 universities and local colleges across the US and the world. Even at education discount that is a lot of money. Now add all the freelance agents. Some have just graduated. They must buy the full versions, some will, some wont. Now add in upgrades. If we were at Adobe we could look at the sales reports and see what is generating the money. Then focus on that area and take necessary actions.

    If they are giving things away then I would think they are doing ok. :)

  7. To put things in perspective though… I’ve been told that Adobe’s “Enterprise Products”, which include products like FDS, LiveCycle, etc. only account for approximately 15% of their overall revenues.

  8. Martin, this blog is about Flex, not Adobe’s revenues in general. LiveCycle is not Flex even though Flex may generate LiveCycle sales.
    But since you know some numbers, what accounts for other 85% of the revenues?

  9. My point was that Flex and Flex Data Services are a PART of “Enterprise Products” which in total account for approximately 15% of the total (what I was told). The bulk of the revenues come from all the other products, Photoshop, Illustrator, Flash, Acrobat, Premiere, After Effects, etc.

  10. I enjoy working with cool components. Yes the Flex is definitely coooooooooooooooool……………………….

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