Adobe Monday said it had purchased the assets of a Canadian company that specializes in software related to extensible markup language, or XML.

The company said it had also hired all four employees of Vancouver-based Yellow Dragon

Software. Financial terms of the deal were not disclosed.

Yellow Dragon offers commercial, off-the-shelf software based on a variant of XML called Electronic Business XML, or ebXML. The standard was designed to make it easier for companies in common industries to communicate and as a potential replacement for older, more expensive data-exchange technology called Electronic Data Interchange (EDI).

Adobe Canada director John Hogerland said Adobe would incorporate Yellow Dragon’s technology into its intelligent document architecture — a common server platform built in Java with components built on top of them — when it makes its next major release in mid-2004. This includes both a metadata registry as well as an XML messaging product.

“”It’s like index cards in a library,”” he said in reference to the metadata registry. “”You’ll be able to identify XML documents so you know the author and where to find it. The messaging product is like a courier company where you could take your documents, put in a package, address it and if they don’t get it they’ll call you.””

Hogerland said the Yellow Dragon deal was consistent with Adobe’s ongoing search for companies it sees as a strategic fit. Last year, Adobe acquired Ottawa-based Accelio (formerly JetForm), arriving as a white knight after Waterloo, Ont.-based Open Text made a play for the firm.

Forrester Research analyst John Meyer said buying a firm like Yellow Dragon could signal the beginning of a change in direction at Adobe.

“”That type of acquisition, even though it’s a very small player in the space, is probably something around their strategizing, from a product perspective, about how to become less document-centric,”” he said.

Hogerland said the deal was more an add-on to Adobe’s existing Web services strategy.

“”Prior to the acquisition, our architecture allowed for the marriage of rich presentation of PDF with XML and Web services, and lots of enterprise customers are doing that,”” he said. “”The acquisition allows them to extend that and add that.””

Yellow Dragon’s software could be particularly useful for Adobe’s government customers, which according to Hogerland has embraced ebXML.

“”It’s going from outside of government to inside of government for the purposes of grants management, or some of those kinds of capabilities,”” he said as an example. “”This technology will give us the ability to enable more transaction-oriented communication.””

Hogerland said Yellow Dragon had a client list of its own but wasn’t aware of any overlap with Adobe’s installed base.

Comment: info@itbusiness.ca

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