Recently, Quark VS InDesign.com reader Woz mentioned his concern over the Adobe-Macromedia merger because of an editorial he found on the blog Daring Fireball. Fortunately for Woz, that editorial was riddled with incorrect facts and erroneous conclusions.

Jon Gruber’s rants are often interesting because of his writing style and manner of presenting a compelling case (even if his facts are completely wrong). You just have to be careful to do your own research before believing any facts he presents (you should research any editorial, especially online, before believing it, mine included). His editorial, “[1] the Fish Rots from the Head First,” is a compelling example of why independent research is needed before accepting Gruber’s conclusions or intimations.

For example, Gruber accuses Adobe of a brown thumb, saying that the applications they acquire wither and die, like PageMaker:

Adobe does not have a good track record with acquired applications. E.g. they acquired PageMaker and it died; they created InDesign on their own, and it’s thriving. They acquired GoLive years ago, and while it’s still around and admittedly has its adherents, no one can argue that it’s successful in the way their print-oriented apps are.

His facts are completely in error here, as you’ll instantly recognize if you read “[2] A Brief History of the Desktop Publishing War” or if you’ve done any research into the numerous other sources of correct data.

Aldus built PageMaker, as even Gruber knows. But, Aldus was also the one to order the death of PageMaker in 1993, not Adobe. Aldus, not Adobe, created InDesign—at least the foundation—and InDesign was created for the express purpose of replacing PageMaker. Then code-named K2, InDesign was the primary reason for the acquisition of Aldus by Adobe. Premiere and AfterEffects were also big motivators, but K2 was the crown jewel. After the acquisition, the same Aldus programmers continued to build InDesign until it’s release. Adobe’s Seattle office, from which nearly all of the InDesign development team still works, was the Aldus office (well, they moved once since then), and the developers were, at least through version CS, nearly all the original Aldus K2 programmers. Many of them had also worked on PageMaker throughout the years.

For the record, the only current creative pro applications Adobe developed completely in-house were Illustrator and Acrobat. Everything else—Photoshop, InDesign, FrameMaker, GoLive, LiveCycle, Audition, Premiere, AfterEffects, and others—was acquired technology. Of course, no one uses that lousy AfterEffects or the all-but forgotten Photoshop any more. Clearly, Jon, you’re right: Adobe has a terrible track record with acquired technologies.

An optimist might argue that Adobe has purchased Macromedia specifically to fill the web-sized hole in the product line-up, but I think it’s more likely they’ve done it just to get bigger for the sake of being a bigger company.

To suggest that the world’s then third-largest software company would spend $3.4b just because it could is naive and ludicrous. Like many other commentators, Gruber is worried that his favorite Macromedia products will change or disappear. It’s a valid fear, but a foolish argument to express that fear.

Yes, Adobe’s near total lack of… (Continued on Next Page)

Yes, Adobe’s near total lack of viable Web products was a small factor, but the primary motivator for the acquisition was Microsoft’s Metro e-paper system. With Acrobat, PDF, eForms, and the server solutions based on them, Adobe dominates the burgeoning electronic paper market at the enterprise and government levels. Microsoft, with its Windows operating system and Office suite, holds an undisputed monopoly on enterprise and government desktop workstations. Any other company or product line becoming just as ubiquitous in these markets threatens to topple Microsoft’s empire.

With Linux and OS X becoming stronger and more business-friendly, and with alternative word processors and spreadsheet applications just beginning to gain acceptance, Microsoft needs to remain the sole vendor in as many enterprise areas as possible just to leverage the continued profitability of its existing products (Windows, Office, etc.). Therefore, the success of Metro is crucial to Microsoft’s future. Remember: Adobe’s PDF format is platform-independent, and it would take little effort for Adobe to transition its enterprise product line to run just as well on Linux or OS X systems as they do on Windows.

Take the IRS, for whom Adobe originally built their eform server, LiveCycle Policy Server. If the IRS stays with PDF and Adobe products, that is a major set of technologies and systems not specifically requiring Windows; if the IRS wanted to change it’s operating systems, Adobe, not having a stake in any operating system success, could rapidly and easily deliver solutions to a new platform. Although not likely for a long time to come, it is possible that, down the road 10 years or so, Linux or OS X could become attractive to the IRS and other enterprise- or government-level customers. The fewer Windows-centric systems and solutions employed at such levels, the stronger the temptation to walk away from Microsoft’s operating system. What government agency wouldn’t be interested in a virus-free, Mac-based office if Macs were enterprise-ready?

With the epaper cold war heating up, Adobe knew Microsoft had one critical element of the enterprise infrastructure that Adobe didn’t: Microsoft Internet Information Server (IIS) with .NET and an Access backend.

Macromedia, on the other hand, already owned ColdFusion, the Web’s most widely used database connectivity solution and dynamic content backend (MySQL with PHP is the open source alternative, but enterprise can’t bank on open source). Coldfusion and IIS/.NET are neck and neck in terms of installed user base, and, if Adobe is going to make good on its promise of genuine dynamic PDF content, they need ColdFusion (and a healthy dose of the underlying Flash Paper technology). Without it, Microsoft would crush the PDF dominancy at the enterprise, which, of course, would trickle down through medium-sized businesses, SOHO, and ultimately consumers—though none of those groups are as important as the enterprise to the future profitability of either Microsoft or Adobe.

The decision to purchase Macromedia was motivated by ColdFusion and Flash. Flex, Breeze, and the other products were smaller but also important considerations because, together with Acrobat, InDesign, LiveCycle Designer, Dreamweaver, and a few products yet to be revealed, they’ll become the frontend of the PDF/ColdFusion/LiveCycle epaper/eforms platform.

Where Microsoft is trying to leverage Office as its Metro frontend, Adobe has a wider base and more scalable tools already on hand to form its frontend. Everyone uses Office, but everyone also uses Acrobat. More importantly, everyone involved with the enterprise can already read PDFs through the free Adobe Reader. Earth’s major governments have already standardized on PDF and Adobe Reader. Adobe already owns the document viewing side of the equation. Microsoft, on the other hand, failed in its prior attempt to beat out Reader with it’s short-lived Microsoft Word Viewer. Now they’ll try it again with Metro and a free viewer (built into Windows Vista and Internet Explorer 7), but they face two great challenges: First, Adobe doesn’t have to do anything to promote PDF and Reader, it’s already there on every desktop (again, those around the enterprise). The enterprise knows PDF, knows how to read them, and how to make them—even from within Office. Microsoft will have to not only convince the enterprise that they can make better documents easier with Metro, but also convince the whole market to begin using Metro reader. Remember: Large corporations take years before they upgrade operating systems, so they won’t have Metro thrust upon them in the form of Windows Vista for approximately 1-5 years after initial release.

The key advantage Microsoft had in that area was their IIS server and .NET and Access databases. With PDF, Flash, and ColdFusion under a single roof, Microsoft’s advantage has all but evaporated. After purchasing Macromedia, Adobe has the genuine potential of establishing an unchallenged epaper empire.

Oh, and let’s not forget that the enterprise—and especially governments—love standards-compliancy. PDF is already a standard, and both PDF and ColdFusion are XML-compliant without the non-standard flavorings that keep Microsoft products proprietary and profitable.

Adobe’s choice to purchase Macromedia had nothing whatsoever to do with acquiring the competition that was killing GoLive and threatening AfterEffects (and had already killed LiveMotion). In fact, it had nothing to do with the applications produced by either company’s creative pro business unit. It was about keeping Adobe in the epaper business, and beating Microsoft to the mobile content publishing market (a discussion for another time).

If Adobe hadn’t bought Macromedia… (Continued on Next Page)

If Adobe hadn’t bought Macromedia, Microsoft probably would have, and then there would have been no stopping Bill and company. The implications of Microsoft completely dominating epaper/eforms and mobile content publishing would be far reaching and monumental. For one, an even larger Microsoft monopoly would severely hinder Apple’s Holy Grail aspirations of getting its operating system into the enterprise (although Apple is unhappy about the Adobe-Macromedia merger for other reasons).

So, let Jon Gruber whine about the loss of Macromedia’s independence. It would have happened regardless. Macromedia was in possession of technologies too valuable to be ignored, technologies that will prove critical to the planet’s move toward electronic documents and the merger of broadcast television and the Internet. Those who want to own that market could not let Macromedia’s technologies remain out there, waiting to be used against them. It was inevitable that someone would buyout Macromedia. The only questions remaining were who, and whether they would use the technologies or kill them so no one else could.

I’m a fan of the Warnock and Geschke Adobe much more so than the Chizen Adobe, but it’s still Adobe. If it’s a choice between Adobe and Microsoft to control the epaper and digital publishing tools of the future, I’ll root for Adobe without fail. Ultimately, Macromedia would have been bought by someone, and there were only three players interested enough, and with the means, of doing so: Apple, Microsoft, and Adobe.

Had it been Apple, Microsoft would still win in the end. OS X is nowhere near ready to be an enterprise desktop, so Apple simply couldn’t penetrate the markets that count when it comes to competing with Microsoft on epaper (and, again, mobile content publishing). Nor does Apple have the pre-existing technology to successfully marry to Macromedia’s to make a good use of such an acquisition. Apple would have made stellar desktop applications, but that would be the furthest they could reach. Even more importantly, Apple’s primary concern is selling its computer hardware. Everything they do—OS X, iTunes, iPod—is built around leveraging the Mac. And, they promote it solely as a lifestyle brand computer. Enterprises don’t care about lifestyle brands; they care about productivity, which is Microsoft’s, not Apple’s, brand image. Make no mistake: Apple is squarely focused on penetrating and taking over the enterprise, but they need to work up to that by keeping their design market, recapturing the education market, and establishing a new base among home users. Once that’s done, they’ll move upward through SOHO, small- to medium-sized businesses, and then into enterprise.

Were Microsoft the purchaser of Macromedia, it would have converted all the markets of ColdFusion- and Flash-based technologies into Metro using amalgamations of Flash and Sparkle and Dreamweaver and FrontPage to extend the reach of Office. For the next 10-15 years, Microsoft would have a strangle hold on epaper—long enough to choke the life out of Adobe and send Apple and Linux back to microscopic marketshares.

Adobe was the only logical choice for buying Macromedia—that is, unless you favor a Microsoft-controlled world more monopolystic and draconian than your current office.

As far as the lack of competition argument, that doesn’t hold water either. Adobe has held almost total market dominance with Photoshop, AfterEffects, FrameMaker, and Acrobat for years without slipping. At the same time, they’ve watched competition like Quark, Microsoft, Corel, and Apple (mostly under John Sculley) fall into the trap of king of the hill complacency only to be blindsided by hungrier, more agile competitors. Bruce Chizen is not an idiot, nor is he lazy. He knows what happens when market leaders become complacent, how easy it is to be shot dead when they stand in one place too long, which is why he makes sure Adobe is a constantly moving target.