If you’ve been following this story, you know it began with startling allegations leveled against Quark by a confidential source within Quark’s U.S. operations. On 5 August 2007 Quark VS InDesign.com published [1] the claims of the “Source”: that Quark was laying off personnel, that it was spending more money than it should on executive perks, that QuarkXPress 7 was drastically underselling projections. To answer those allegations, [2] I interviewed new president and CEO Ray Schiavone who confirmed that Quark had dismissed an unspecified number of personnel—bizarrely, Schiavone claimed that the layoffs didn’t actually happen until days after Quark VS InDesign.com published that they had, and that I couldn’t have known about them ahead of time despite irrefutable fact to the contrary. As to the other claims, Schiavone was even less specific in his denials, though deny them he did.

During my first interview with Schiavone, which occurred on 8 August 2007 following the employee briefing wherein Schiavone reportedly broke the then-not-so-new-news that personnel had been laid off, I asked about a number of topics beyond, but inspired by, the allegations of the Source—topics like QuarkXPress 8, whether Quark has ceded the war for desktops to InDesign, and whether Schiavone wanted to take the privately-held Quark, Inc. public.

By mutual agreement, Schiavone and I decided to speak again and in more depth about those subjects before publication. The format agreed to was e-mail—I would provide Quark with a 20-questions-style selection of follow up questions, and Schiavone would respond in writing; any subsequently lingering points would then be clarified by telephone and/or e-mail. As expressed by MacLean Guthrie, director of Quark’s corporate communications and a party to my initial interview of Schiavone, Quark seemed just as interested in pursuing the second interview as they were the first.

Of course, that was before the first interview was actually published.

[For the record: Quark reviewed and confirmed every quote and fact in the “Quark Responds to ‘Quark Insider’” story prior to its publication. —Editor]

Unfortunately, the follow up questions, questions which Quark was initially anxious to answer, will go largely unanswered. Apparently that is because I failed to accept and regurgitate everything Schiavone said as gospel—something other writers desperate to garner favor with Quark were only too happy to do. By presenting a fair article that balanced the specific allegations of the Source with the light-on-fact retorts of Schiavone, and asking you, the reader, to make up your own mind, I have evidently broken the First Commandment, and as a consequence have apparently been excommunicated (again) from the divine grace of the Kingdom of Quark.

After three weeks of Guthrie’s delays and excuses, I had given up hope that Schiavone ever intended to address the questions I furnished to Quark on 15 August 2007. Last week I gave Schiavone one final chance to have his say. Though Schiavone was dynamic and garrulous in defending himself and his New Quark against the allegations of the Source, in this opportunity to put Quark’s best face forwarded he answers minimally and tersely, if at all.

Of course, any astute observer knows that what one doesn’t say is often more telling than what is said.

20 Questions for Ray Schiavone

Quark VS InDesign.com Quark is a company with a lot of history (some might say baggage) and ingrained attitudes. You must have known that going into the job. How did the company greet you? What have you been doing to change the so-called “Old Quark” corporate culture?

Ray Schiavone My approach has been 100 percent customer-centric. I’ve worked to empower every employee to play an active role in our customers’ success. I believe that there are only two jobs in the company: Sales and sales support. This philosophy gets everyone outwardly focused, and if any employee is capable of helping with customer issues, they’re called upon.

QvI Can you tell us a little about some of the people you’ve brought in to help with the New Quark, why you chose them?

RS: We’ve built a team that has proven expertise in turning around companies, expanding businesses in new global territories, developing products in new vertical markets, and generally leading companies to success. For example, Graham Freeman was a former Adobe Sales SVP who realigned Adobe’s worldwide sales operations. Jim Haggarty has introduced strategic technology plans and built world-class infrastructures for companies across diverse industries. And as VP of marketing Terry Welty led the repositioning of Arbortext, helping to turn the company around as the leader in enterprise publishing software.

QvI Congratulations on the new office in Silicon Valley. Loud complaints by English-speaking customers about non-native English-speakers in customer service and technical support. A workforce reduction in India. A new office in Santa Clara, Calif. Are you moving all of Quark’s English language telephone support and service back to the U.S., or only some of it?

RS: Our goal is to maintain customer support centers in the US, Europe, and India so that our customers virtually have 24-hour support. When operations close for the evening in one region, our technical teams in another region can work on resolving any outstanding issues. We want to be even more timely and effective in addressing our customers’ issues this way. We’re looking at how to further expand our customer support in the U.S.

QvI When can Quark’s customers expect the phone to ring in California instead of Mohali? Will that be by the end of 2007, or by Spring 2008?

RS: Customer support in Denver will begin this fall, and we will continue to have a customer support team in India and Neuchatel [ Switzerland].

QvI During our previous conversation you several times used the word “restructuring”—particularly in relation to recent layoffs, hirings, and shifting of positions between departments. It’s all rather vague, though. How are you restructuring Quark? Into what are you restructuring it?

RS: I’m sure you’ve heard the phrase before, “Change before you have to.” Every smart company has to heed this advice to stay competitive. As a company evolves, it needs to align its assets in order to capitalize on future market opportunities. And that’s what we’ve done.

Quark is focused on our customers’ future. While we continue to add value to QuarkXPress and maintain our commitment to our desktop customers, we are expanding in the enterprise market and in other new growth areas. In order to do this, we’re putting additional resources behind our strategic growth products.

QvI We’ve heard that, during a senior staff meeting in Spring 2007, you reportedly said: “QuarkXPress has lost against InDesign. That fight is over.” Is that how you feel? Has Quark given up the fight for the desktop publishing market?

QvI We’ve heard that, during a senior staff meeting in Spring 2007, you reportedly said: “QuarkXPress has lost against InDesign. That fight is over.” Is that how you feel? Has Quark given up the fight for the desktop publishing market?

RS: What I meant by that is that we’re not going to compete with Adobe. I don’t want to be someone else’s company. I want to be our own company. There are other things that are our strengths that Adobe doesn’t [do]. That’s a losing proposition to be another person’s company. I want to focus on innovation, not replication.

QvI What are some of those innovations, those “strengths that Adobe doesn’t” have?

RS: While I can’t give you specifics because development is underway, I can tell you that we are making enhancements to our server-based enterprise products and developing new products that will comprehensively serve the digital publishing needs of our current and potential customers and expanding capabilities in our QuarkXPress product. You’ll be hearing more about all of these initiatives next year.

QvI Has Quark Inc. announced any dates (or general time for release) to its Service Plus customers for QuarkXPress 8?

RS: [8 August:] No. We’re sticking to the practice of as soon as we can. [7 September:] Yes.

QvI When QuarkXPress 7 was released in May 2006, the company promised a release cycle of 18 to 24 months. If you plan to adhere to that promise, then XPress 8 should hit the market no later than May 2008. Is that when we’ll see it, or is development of QuarkXPress 8 behind schedule?

RS: Development of QuarkXPress 8 is proceeding as planned.

QvI What can QuarkXPress users look forward to in version 8?

RS: A more focused version of QuarkXPress with fewer new features but with the features users want, the ones they’ll really use. I want to give them what they’ve been asking for years. It will be a unified release for all international markets.

QvI You mean QuarkXPress and Passport, there will be just one code base?

RS: See above answer—that should answer this one too.

QvI Is QuarkXPress 9 on the roadmap? Will there be a QuarkXPress 9?

RS: Absolutely.

QvI When you came onboard at Quark in November 2006, you were fresh from turning Arbortext, Inc. from a desktop software company into an enterprise systems provider, and before that managing enterprise-grade products at General Electric Corp. properties. One could say you’re not a desktop software guy, that you’re an enterprise guy. Yet you’re the president and CEO of a company with more than 20 years in desktop software. A lot of QuarkXPress customers are afraid that you’re here to transition Quark from a desktop software company into an enterprise software company. Is that the case?

RS: Desktop and enterprise are not mutually exclusive. I am here to evolve the company to provide technology that helps our customers move forward, and not to just add features to a 25-year-old product.

QvI What is your strategy then for building, or at least retaining, XPress’s, QID’s, and other desktop products’ shares of the market?

RS: We will deliver more value with each new release of QuarkXPress and its complementary products. We also continue to develop new XTensions that enable our customers to do more with QuarkXPress than ever before. And in that vein, we have added more support for our XTensions developers and other third-party service providers worldwide who are members of QuarkAlliance. And as we learned through the worldwide customer roadshows we held earlier this year, face-to-face interaction goes a long way for both our users and our team. We plan to build on this momentum.

QvI In addition to transitioning your last company’s products from desktop to enterprise you also lead it through a sale to Parametric Technologies Corp. for a figure that was nearly five times Arbortext’s revenue. That’s an impressive accomplishment. And it begs the question: Were you brought in to fix up the house and make it more attractive for sale?

RS: I was brought in to bring professional management to the company. I’m the first outsider to run the company. I was brought in to transition the company and address challenges in the professional marketplace. And to position the company for growth. We are not a venture-backed company but a privately held company that is committed for the long term.

QvI To transition the company into what?

RS: See other responses.

QvI Twice during our conversation you intimated that Quark might go public in the future. Is it your strategy to turn the privately owned Quark into a publicly traded company?

RS: No comment.

QvI Did you hire Ernest J. Sampias as CFO in June 2007 to help prepare Quark for an IPO?

RS: No comment.

QvI Does the Ebrahimi family want to sell off Quark?

RS: No comment.

QvI Speculation—and hope—is rampant that a consumer-grade, or “business class,” layout application will appear on the market from one of the two companies that has the experience in professional layout software to build it right. You said QuarkXPress isn’t competing against InDesign, but are you competing against a theoretical InDesign Elements? Are you building “QuarkXPress Lite”? Do you believe the market has a need for a more accessible, less powerful version of XPress?

RS: No comment.

QvI Are the desktop and enterprise development and marketing teams working in collaboration? Do they share resources and discoveries—does one group’s idea and innovation benefit the other’s?

RS: Absolutely. QuarkXPress is the foundation for the products we’re developing that will take us into new markets and farther in the enterprise space.

QvI Imagine it’s now 2012, five years from now. Where—and what—is Quark, Inc.?

RS: No comment.

Next, the backstory.

The Backstory

When a journalist interviews a subject there are two sets of questions in play. There are the queries posed by the interviewer (and usually responded to by the subject), and then there are questions behind the questions. Why would a journalist ask this or that? What does the journalist know or suspect that he’s trying to draw his subject into confirming or denying? It’s the backstory, what’s going on behind the interview. Usually the backstory is self-evident. The interviewer draws the real story out of the subject such that the question behind the question is answered, that the subject’s responses reveal both the prima facie issue as well as the backstory. In effect, an interview is often a matter of the subject speaking aloud what the interviewer already knows.

In this case, however, where the format imposed for the second interview was e-mail, and given Schiavone’s taciturnity, the backstory is left untold. What elicited the above 20 questions from me? Why did I ask about this or that? Schiavone should have told you that himself, in his own way, but now if you want a complete story, it’s up to me to explain.

Although highly unorthodox, I’ll examine many of the questions by interviewing myself.

Quark VS InDesign.com Why did you ask: “Quark is a company with a lot of history (some might say baggage) and ingrained attitudes. You must have known that going into the job. How did the company greet you? What have you been doing to change the so-called ‘Old Quark’ corporate culture?”

Pariah S. Burke During a visit a few months ago to Quark’s Denver headquarters I asked several Quark managers and executives how Schiavone had been received at the company, whether his new management style was being met with opened arms or fingers in ears, and if he was generally liked. (Schiavone himself was out of town at the time.) In addition to my asking such questions directly of recently hired as well as long-time Quark leaders, others volunteered the following information without prompting.

The responses were all unanimous, offering the following points consistently:

• The speaker him- or herself “loves” Ray;
• Schiavone’s ideas and management style are radically different than those of prior CEO’s, and a refreshing, much needed change;
• Those who were part of the “Old Quark” leadership team don’t like Schiavone (interestingly, some of those who said they loved and were grateful for Schiavone were themselves singled out by others as being among the “Old Quark” regime that reportedly dislikes Schiavone);
• Schiavone is gradually replacing all the “Old Quark” upper managers one at a time.

I asked the question because I wanted to learn how Schiavone himself viewed the transition.

QvI Why did you ask: “Are you moving all of Quark’s English language telephone support and service back to the U.S., or only some of it?” and “When can Quark’s customers expect the phone to ring in California instead of Mohali? Will that be by the end of 2007, or by Spring 2008?”

PSB The why of this question is pretty obvious: Quark customers, particularly English-speakers in North America, often complain about receiving support from technicians for whom English is not a first language. Even when language isn’t a barrier, customers frequently complain about cultural differences—specifically that overseas technicians have difficulty understanding the need of American workers to solve show-stopper and serious technical issues quickly.

I wanted to see if Schiavone would address those complaints either by committing to staff English-language customer service and technical support lines with Americans, or by presenting another plan to assuage customers regarding these complaints.

To be completely candid, I already knew the answer to these questions, but I shouldn’t be the one to divulge that information. I’m glad Schiavone was willing to answer these questions when he declined to address many others. I’m also happy to see that customer support lines will once again ring in Denver. Last I had heard, a California location was still being considered.

QvI You asked: “We’ve heard that, during a senior staff meeting in Spring 2007, you reportedly said: ‘QuarkXPress has lost against InDesign. That fight is over.’ Is that how you feel? Has Quark given up the fight for the desktop publishing market?” and Schiavone responded by saying: “What I meant by that is that we’re not going to compete with Adobe. I don’t want to be someone else’s company. I want to be our own company. There are other things that are our strengths that Adobe doesn’t [do]. That’s a losing proposition to be another person’s company. I want to focus on innovation, not replication.” Was that a satisfactory answer?

PSB Yes and no. The fact that I knew about the content of that meeting and his comments regarding InDesign seemed to take Schiavone by surprise—what I know often seems to surprise Quark. I was glad that Schiavone didn’t deny the statement and that he put it in context. Of course, it prompted my next question.

QvI Why did you ask: “What are some of those innovations, those ’strengths that Adobe doesn’t’ have?”

PSB Because it was a prime opportunity for Quark to tout its strengths and assets outside their marketing materials. As we all know, Quark’s marketing materials are rarely heralded for their [3] accuracy and objective honesty.

I was really looking forward to this answer because I’ve talked at length with product managers about their plans and ideas for the future of XPress and other products. I’m disappointed. Schiavone’s response could have been very interesting.

QvI You asked: “Has Quark Inc. announced any dates (or general time for release) to its Service Plus customers for QuarkXPress 8?” Were you satisfied with the answer?

PSB As of my 8 August interview of Schiavone, he had not announced a release date to Service Plus customers. One month later, he had. I asked that and the following question again—the question about keeping to XPress’s stated 18-24 month release cycle—to see if I could elicit more detail from Schiavone.

My sources tell me QuarkXPress 8 development has fallen behind schedule, that it’s unlikely we’ll see a full retail release earlier than Fall 2008. Even if a fully operational retail version is late, putting out a public beta for a few months could change the overall market perception of the length of time between XPress 7 and 8 releases. Perception isn’t everything, though; no production manager worth her salt will bet her workflow on a beta product, so a beta XPress 8 will be little more than a good faith effort for most working professionals until boxed product ships.

QvI You asked: “When QuarkXPress 7 was released in May 2006, the company promised a release cycle of 18 to 24 months. If you plan to adhere to that promise, then XPress 8 should hit the market no later than May 2008. Is that when we’ll see it, or is development of QuarkXPress 8 behind schedule?” Schiavone responded: “Development of QuarkXPress 8 is proceeding as planned.” Why?

PSB See my answer to the previous question.

I should note that the response Schiavone gave was from the August interview. At that time, the question I posed was merely: “how is QuarkXPress 8 development coming?” He gave the answer as written above, but there was some hesitation in his voice.

The second time around, in the 20-questions-style, I asked the question again in a more specific manner. I wanted to know for sure whether Quark was planning to meet its promised release schedule, or if XPress 8 would not be ready by May. I put Schiavone’s prior answer under that question and sent it to him for review. Via MacLean Guthrie, Quark later confirmed that that quote was accurate and, I assume, that they considered it a sufficiently complete answer to the question.

QvI In the next two questions you asked about QuarkXPress 8, and then you jumped to QuarkXPress 9. What was that about? Did you get satisfactory answers to all three questions?

QvI In the next two questions you asked about QuarkXPress 8, and then you jumped to QuarkXPress 9. What was that about? Did you get satisfactory answers to all three questions?

PSB Not really, no. The questions were an opportunity for Schiavone to blow Quark’s horn and excite QuarkXPress users for the future. I don’t feel that he did that—other layout applications have been a single code base for going on 10 years, and, more importantly, the market had already been told that XPress 7 was built as a unified code base. The fact that XPress 8 will be one, internationalized product is not a new concept. Many QuarkXPress and QuarkXPress Passport users thought they’d have that in 7, so a promise to get it in 8 is likely to elicit more of an “about time” reception from customers than it will a “yahoo!” reaction.

I inquired about XPress 9 because it’s a critical question to ask.

You see, in the software business—particularly with big, complicated code base products like any product from Quark, Adobe, Microsoft, and so forth—there are product roadmaps. Developers look at proposed features and identified bugs, and they evaluate the amount of work involved to implement any given feature or bug fix, the demand for the feature or severity of the bug, and how much time they have before development milestone and product release deadlines. Then the developers determine whether a particular feature or bug fix can be implemented in the next release, or if it has to wait until a later version.

For example, say the QuarkXPress development team is looking at adding a new feature to interface QuarkXPress with systems at Starbucks via an always-on, bi-directional SSH connection. In some future version of XPress, you’ll be able to choose your favorite Starbucks beverage in the XPress preferences, and then click a button on the new Deadline Tools palette to order that beverage delivered to you from the nearest Starbucks. Assuming that Starbucks has its infrastructure in place and is ready to proceed with the partnership, the question for XPress developers is whether the have time to get the feature into XPress 8. If not, they move it down the roadmap to XPress 9, 10, or later, depending on the amount of work, time, and need for the feature. This is how most major software development works.

The reason I asked about XPress 9 was to get Schiavone on record saying that there is an XPress 9 on the roadmap. If he declined to answer that very straightforward question, it would have given rise to doubts about Quark’s commitment to the future of XPress—something I’m still not entirely sure about, at least, not in terms of XPress staying a desktop product.

QvI In the next several questions you seemed to be following two threads: enterprise-grade software and whether Schiavone has plans to take Quark, Inc. public or sell it. Let’s talk first about the enterprise software questions. You mentioned Schiavone’s extensive and immediately previous experience with enterprise-grade products from Arbortext, Inc. and General Electric Corp. subsidiaries, and; the fact that he transitioned Arbortext from a desktop software company (like Quark) into an enterprise systems provider. What were you trying to draw out of Schiavone?

PSB Although most of the U.S., Canadian, and Japanese markets have favored InDesign for several versions now, as does a large portion of design, publishing, and production in the U.K., QuarkXPress continues to be very popular throughout Europe, South America, and Africa. InDesign is favored on freelance and small business desktops on those continents, but QuarkXPress still owns the majority of large publishing and production workflows. Australia is a hot battlefield. Adobe’s Creative Suite, which includes InDesign, sells well Down Under, but Quark is waging a successful counter offensive by saturating the educational market through a strategic partnership with Scholastic.

No matter where you look, though, the writing is on the wall: Quark is steadily losing desktops to InDesign. And, it isn’t just fighting for the desktop anymore.

Server and workflow products that incorporate or run atop XPress are antiquated and have been lagging behind changing publishing needs around the globe. Quark’s own enterprise- and server-grade products, as well as third-party partner systems, are losing to InDesign-based workflow systems like SoftCare’s K4 and K2. When Adobe completes InDesign’s transformation into a fully scalable, FrameMaker-like SGML publishing platform, InDesign will become a juggernaut Quark may never be able to turn.

I believe Ray Schiavone’s plan is to use the greater agility inherent in Quark’s smaller size to head off Adobe’s domination of enterprise publishing. No, I don’t believe that Schiavone intends to take Quark down the same road he steered Arbortext, moving fully out of desktop and into enterprise. Eventually, yes, but not today. On the contrary, I think Schiavone cares a great deal about desktops at this crucial stage in the game. He needs them. The desktop is his gateway to the enterprise, and, just like Microsoft and Adobe before him, he needs desktop software to sell and leverage his new enterprise products.

I think QuarkXPress will continue to have utility on its own, but its primary role will be to function as a desktop client for an as-yet unrevealed enterprise-grade suite of systems.

XPress 8 will be the first stage, I predict. It will have few new features designers really want, but will offer greater scalability and automation important to managers of large publishing workflows. It, and Quark CopyDesk 8, will offer tight integration with XPress Server and new enterprise systems Quark will announce over the course of the next two years. Although Quark will hope to see their new systems adopted—and will promote those adoptions at least as loudly as Adobe touts migrations to K4—Schiavone knows that major publishing workflows don’t change rapidly. His realistic goal for the XPress 8 generation of products will be to make the market take notice of Quark again, to open a dialog with large workflow managers who will help refine Schiavone’s vision for XPress 9.

By the time XPress 9 and its matching systems do release (probably less than 12 months following the release of version 8), QuarkXPress will be little more than a client application. All the real power will reside on the server-side systems. More importantly, by abandoning the so-called “feature war” with InDesign, Quark will create a lopsided conundrum for potential users—you can have near total automation of your publishing and production, with output to print, PDF, PDF/X, HTML, XML, and everything else you can think of, but without certain creativity, composition, and proofing features the competition will have had for generations.

Ultimately, I believe the average small-office, home-office user of desktop publishing systems will completely forget about Quark before QuarkXPress 10 because Schiavone only cares about small and medium sized businesses now; once they’ve fulfilled their purpose as stepping stones to enterprise, Quark will have no further use for them.

I also think QuarkXPress 10 won’t be desktop software at all. It will be a server-hosted, instance application, which isn’t feasible for SOHO and small studios. Similar to the way QuarkXPress License Server functions today, companies will purchase blocks of licenses. But, instead of installing the XPress software on users’ systems and letting the License Server manage the number of concurrently running copies, users will log into their workflow systems and use a copy of the QuarkXPress client that actually runs on the application server rather than their local computers. The change from desktop to server-hosted, I believe, will begin in earnest with XPress 9, which will have a desktop installable as an aid to assist Quark customers in transitioning to the new server-based software. Beginning with XPress 10—or 11, if the outcry is great enough—the individual installation version will be removed. Companies that can’t afford the hardware required to run such a setup will be unable to use XPress.

After 2012, I don’t think Quark will care too much about desktop users because it won’t offer products to them.

QvI And, to your questions about taking Quark public or selling it?

PSB That’s easy: I think the Ebrahimi family, who currently own Quark, lock, stock, and barrel, want out. I’ve suspected that for a long time now. I must say, though, that I always thought they’d simply sell the company. I didn’t think they’d look for an IPO—and I do believe that’s what’s going on.

Twice Schiavone made it a point to intimate that the company may go public during my telephone interview with him. He was very careful to word everything else exactly the way he wanted to say it, so I have to believe that he intended to convey to me that his goal is to take the privately-owned Quark, Inc. to the stock market. And, it makes a great deal of sense.

By the end of his direct involvement with Quark, Fred Ebrahimi [4] was no fan of QuarkXPress customers anyway, and the rest of the Ebrahimi family has also reportedly gone hands-off of the company. They want out of managing Quark, and they can do that—while still earning income from it—by opening the company to other investors. In fact, I’d be surprised if Schiavone wasn’t already given a percentage of ownership. If the Ebrahimi family wants out entirely, then the way to cash out with the biggest payoff is after a strong initial public offering.

Mark my words: Simultaneous to the real (not initial) enterprise product offerings (probably shortly after XPress 8 ships or around the time 9 is released), Schiavone is going to lead Quark into an IPO.

There you have it. The best interview answers Ray Schiavone can muster after nearly a month with the questions, and the backstory behind the questions. I expected more from the company that says it isn’t the same old Quark, with the same old arrogance.

If all the “no comment” responses are any indication, I’m apparently once again frozen out of official channels at Quark. That means I’m back to getting all my information about Quark from other sources—talkative employees, vendors, and partners, leaked memorandum, unwitting official admissions and omissions, deductive reasoning—you know, all the same sources that have enabled me to report, analyze, and predict the activities of Quark for 5 years now while Schiavone’s and Guthrie’s predecessors considered me persona non grata.

I’m broken up about it. Really.