Canadian developers shocked by Flash sale

Canadian Flash developers said they were caught by surprise by Adobe Inc.’s US$3.4 billion bid to purchase Macromedia as part of a strategy that executives said will bring a

more complete set of multimedia applications and Web authoring tools to enterprise customers.

San Jose, Calif.-based Adobe said Macromedia president Stephen Elop would become president of worldwide field operations under the combined organization, while Adobe chief executive Bruce Chizen and president Shantanu Narayen would continue in their current roles. The deal is expected to close this fall.

Adobe is best known for its PhotoShop and Illustrator series of software tools, while Macromedia has built its reputation on Flash, software that animates Web sites, and Breeze, which customers such as the Kuh-ke-nah Network of Smart First Nations have used to collaborate online. The two firms have competed in the Web authoring space, with Adobe acquiring GoLive in 1999 to compete with Macromedia’s popular Dreamweaver tool. The companies have also waged a long series of patent infringement battles over Flash, which were later settled.

In a conference call with executives and analysts Monday morning, executives said the company would operate under the Adobe brand but that products may continue to be branded Macromedia.

“We help them today as Adobe with their interactive forms, their intelligent documents,” Chizen said. “What Macromedia does is help them with their rich interactive information. Combined we’ll be able to offer them one complete set of tools.”

Several Macromedia customers and user groups said they were taken aback by Monday’s announcement, including Shawn Pucknell, who cofounded the annual Flash In The Can conference that recently took place in Toronto.

“It’s come as a surprise to everyone,” he said. “I’m still trying to get my head around it.”

Tim Goss of the Ottawa Macomedia Users Group agreed. “We actually have a fairly close relationship with Macromedia and they’ve been mum on the subject,” he said.

“There’s a lot of speculation that they’re going to merge the groups, that some of the features are going to go away, or that some of the products that are similar to Adobe products are going to disappear.” 

Grant Skinner, who runs the Edmonton Flash User Group, said there had been some rumblings about a takeover, but nothing specific.

“There’s been lots of acquisition rumours before – I think we’ve been waiting to see who would buy Macromedia,” he said. “They’re a very hot property right now with the ubiquity of Flash . . . we should be repeating the mantra, ‘At least it wasn’t Microsoft.’” 

Adobe, the world’s third-largest software company, has the potential to offer Macromedia much greater mass in terms of installed base, Skinner added.

“My big concern is that Adobe really doesn’t have any experience with developer tools – they have no offering for it right now,” he said. “Most of Macromedia’s tools are very developer-oriented. I’m concerned that Adobe doesn’t destroy that developer focus.” 

Goss said he was looking forward to call-in discussions Adobe had scheduled with developers to quell some of the rumours.

“The only thing I think is come out of this immediately is that we’ll see different bundles of software,” he said. “They’ll try and complement what Adobe already has – adding PhotoShop to the Macromedia bundles for example, to make a full package for people.” 

Narayen said the merged organization would be looking to take the asynchronous capabilities of Adobe’s Acrobat reader and combine them with the real-time capabilities of Macromedia’s Breeze, among other things.

“Clearly Macromedia has done a wonderful job in the mobile space of having their technology on all of these devices, as well as delivering solutions like Flashcast,” Narayen added. “PDF has also been one of the rich formats that is available on these devices, and I think the combination allows us to bring a more integrated rich client platform.”

Elop said enterprise users could expect to see an improved set of products for communication, from document-oriented workflow to Web-based collaboration.

“If you look at the best attributes of Flash and those of PDF, they can complement each other in ways that can help drive the art of communication and capitalize on the information explosion,” he said. “With the success of Flash as a platform expanding into the non-PC world . . . we can rapidly gain the scale and resources to drive our agendas much faster.”

While this Adobe’s largest acquisition to date, it has made a number of smaller deals, including one two years ago to acquire Vancouver-based XML specialist Yellow Dragon.

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