Adobe Systems

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Adobe Systems Incorporated
Type Public
Traded as NASDAQADBE
NASDAQ-100 Component
S&P 500 Component
Industry Computer software
Founded Mountain View, California, US
(February 28, 1982 (1982-02-28))
Founder(s) Charles Geschke
John Warnock
Headquarters Adobe Systems complex,
San Jose, California, U.S.
Area served Worldwide
Key people Charles Geschke
(Co-Chairman)
John Warnock
(Co-Chairman)
Shantanu Narayen
(President and CEO)
Products List of Adobe products
Revenue
  • Decrease US$ 4,055.24 million (2013) [1]
Operating income
  • Decrease US$ 422.723 million (2013) [1]
Net income
  • Decrease US$ 289.985 million (2013) [1]
Total assets
  • Increase US$ 10,380.298 million (2013) [2]
Total equity
  • Increase US$ 6,724.634 million (2013) [2]
Employees 11,144 (2012)[3]
Website Adobe.com

Adobe Systems Incorporated is an American multinational computer software company headquartered in San Jose, California, United States. The company has historically focused upon the creation of multimedia and creativity software products, with a more-recent foray towards rich Internet application software development. It is best known for the Portable Document Format (PDF) and Adobe Creative Suite, later Adobe Creative Cloud.

Adobe was founded in February 1982[4] by John Warnock and Charles Geschke, who established the company after leaving Xerox PARC in order to develop and sell the PostScript page description language. In 1985, Apple Computer licensed PostScript for use in its LaserWriter printers, which helped spark the desktop publishing revolution.

As of 2009, Adobe Systems has 9,117 employees,[4] about 40% of whom work in San Jose. Adobe also has major development operations in Waltham, Massachusetts; New York City, New York; Orlando, Florida; Minneapolis, Minnesota; Lehi, Utah; Seattle, Washington; San Francisco and San Luis Obispo, California in the United States; Ottawa, Canada; Hamburg, Germany; Noida and Bangalore, India; Bucharest, Romania; Basel, Switzerland; and Beijing, China.

History[edit]

Adobe Systems headquarters in San Jose, California, U.S.

The company name Adobe comes from Adobe Creek in Los Altos, California, which ran behind the houses of both of the company's founders.[4] Adobe's corporate logo, featuring the stylized "A", was designed by Marva Warnock, wife of John Warnock, who is also a graphic designer.[5]

Adobe's first products after PostScript were digital fonts, which they released in a proprietary format called Type 1. Apple subsequently developed a competing standard, TrueType, which provided full scalability and precise control of the pixel pattern created by the font's outlines, and licensed it to Microsoft. Adobe responded by publishing the Type 1 specification and releasing Adobe Type Manager, software that allowed WYSIWYG scaling of Type 1 fonts on screen, like TrueType, although without the precise pixel-level control. But these moves were too late to stop the rise of TrueType. Although Type 1 remained the standard in the graphics/publishing market, TrueType became the standard for business and the average Windows user. In 1996, Adobe and Microsoft announced the OpenType font format, and in 2003 Adobe completed converting its Type 1 font library to OpenType.

In the mid-1980s, Adobe entered the consumer software market with Adobe Illustrator, a vector-based drawing program for the Apple Macintosh. Illustrator, which grew from the firm's in-house font-development software, helped popularize PostScript-enabled laser printers. Unlike MacDraw, the then standard Macintosh vector drawing program, Illustrator described shapes with more flexible Bézier curves, providing unprecedented accuracy. Font rendering in Illustrator, however, was left to the Macintosh's QuickDraw libraries and would not be superseded by a PostScript-like approach until Adobe released Adobe Type Manager.

In 1989, Adobe introduced what was to become its flagship product, a graphics editing program for the Macintosh called Photoshop. Stable and full-featured, Photoshop 1.0 was ably marketed by Adobe and soon dominated the market.[6]

In 1993, Adobe introduced PDF, the Portable Document Format, and its Adobe Acrobat and Reader software. PDF is now an International Standard: ISO 32000-1:2008. The technology is adopted worldwide as a common medium for electronic documents.

In December 1991, Adobe released Adobe Premiere, which Adobe rebranded to Adobe Premiere Pro in 2003. In 1994, Adobe acquired Aldus and added Adobe PageMaker and Adobe After Effects to its product line later in the year; it also controls the TIFF file format. In 1995, Adobe added Adobe FrameMaker, the long-document DTP application, to its product line after Adobe acquired Frame Technology Corp. In 1996, Adobe Systems Inc added Ares Software Corp.[7] In 1999, Adobe introduced Adobe InCopy as a direct competitor to QuarkCopyDesk.[8]

Adobe acquired its former competitor, Macromedia, in December 2005, which added newer software products and platforms such as ColdFusion, Dreamweaver, Flash and Flex to its product portfolio.

In 2013 Adobe Systems endured a major security breach. Vast portions of the source code for the company's software were stolen and posted online[9] and over 150 million records of Adobe's customers have been made readily available for download.[10]

Products[edit]

Desktop software
Adobe Photoshop, Adobe Lightroom, Adobe InDesign, Adobe Illustrator, Adobe Fireworks, Adobe Soundbooth, Adobe Acrobat and Adobe Audition
Server software
Adobe ColdFusion, Adobe Content Server and Adobe LiveCycle Enterprise Suite, Adobe BlazeDS
Formats
Portable Document Format (PDF), PDF's predecessor PostScript, ActionScript, Shockwave Flash (SWF) and Flash Video (FLV)
Web-hosted services
Adobe Kuler, Photoshop Express, and Acrobat.com
Web design programs
Adobe Dreamweaver, Adobe Contribute, Adobe Muse, Adobe Flash Builder, Adobe Flash Catalyst, Adobe Flash, and Adobe Edge
Video editing and visual effects
Adobe Premiere Pro, Adobe After Effects, Adobe Prelude, and Adobe SpeedGrade
eLearning software
Adobe Captivate
Organizational software
Adobe Extension Manager and Adobe After Effects
Web content management Software
Adobe Experience Management (AEM)
Digital Advertising Optimization Software
Adobe Media Optimizer (AMO)

Awards[edit]

Since 1995, Fortune has ranked Adobe as an outstanding place to work. Adobe was rated the 5th-best U.S. company to work for in 2003, 6th in 2004, 31st in 2007, 40th in 2008, 11th in 2009, 42nd in 2010, 65th in 2011, 41st in 2012, and 83rd in 2013.[11] In May 2008, Adobe Systems India was ranked 19th of great places to work in India.[12] In June 2014, it was ranked 6th of great places to work in India.[13] In October 2008, Adobe Systems Canada Inc. was named one of "Canada's Top 100 Employers" by Mediacorp Canada Inc., and was featured in Maclean's newsmagazine.[14]

Criticism[edit]

Pricing[edit]

Adobe has been criticized for its pricing practices,[15][16] with retail prices being as much as twice as high in non-US countries as in the US.[17] As pointed out by many, it is significantly cheaper to pay for a return airfare ticket to the United States and purchase one particular collection of Adobe's software there than to buy it locally in Australia.[18][19]

After Adobe revealed the pricing for the Creative Suite 3 Master Collection, which was £1,000 higher for European customers,[20] a petition to protest over "unfair pricing" was published and signed by 10,000 users.[21] In June 2009, Adobe further increased its prices in the UK by 10% in spite of weakening of the pound against the dollar,[22] and UK users are not allowed to buy from the US store.[23]

In 2011, after the company announced that it will only allow owners of the most recent versions of Creative Suite to upgrade to new versions, Scott Kelby, The President of The National Association of Photoshop Professionals, wrote an open letter to Adobe asking it to re-think its product upgrade policy.[24][25]

Customer service[edit]

The company has been criticized by users for bad customer service.[26] In August 2009 Adobe apologized on their main support web page for poor customer service.[27][28]

Security and stability[edit]

For years hackers have exploited vulnerabilities in Adobe programs, such as Adobe Reader, to gain unauthorized access to computers.[29] Adobe's Flash Player has also been criticized for, among other things, suffering from performance, memory usage and security problems (see criticism of Flash Player). A report by security researchers from Kaspersky Lab criticized Adobe for producing the products having top 10 security vulnerabilities.[30]

Observers noted that Adobe was spying on its customers by including spyware in the Creative Suite 3 software and quietly sending user data to a firm named Omniture.[31] When users became aware, Adobe explained what the suspicious software did and admitted that they: "could and should do a better job taking security concerns into account".[32] When a security flaw was later discovered in Photoshop CS5, Adobe sparked outrage by saying it would leave the flaw unpatched, so anyone who wanted to use the software securely would have to pay for an upgrade.[33] Following a fierce backlash Adobe decided to provide the software patch.[34]

Adobe's software has been criticized for, among other things, slow performance and frequent crashes.[35][36][37]

Marketing ethics[edit]

Adobe has been criticized for pushing unwanted software - third-party browser toolbars and free virus scanners, usually as part of the Flash update process,[38] and for pushing a third-party scareware program designed to scare users into paying for unneeded system repairs.[39]

Criticism of Creative Cloud[edit]

Main article: Adobe Creative Cloud

Adobe has caused concerns within the photography and filmmaking community, especially long term users.[40][41] In May 2013, Adobe Systems announced plans to end perpetual software licensing for its Creative Suite products in favor of a subscription-based service model called Creative Cloud, which had been introduced as an alternative licensing model in May 2012.

Shifting to a software as a service model, Adobe announced more frequent feature updates to its products and the eschewing of their traditional release cycles.[42] Customers must pay a monthly subscription fee and if they stop paying, they will lose access to the software as well as to the work they saved in proprietary file format,[43] which is not backward-compatible with the Creative Suite[44][45] (Adobe admitted that this is a valid concern[46]). In addition, they will not be able to retrieve their files from the cloud once the subscription has expired.[47] They must have an Internet connection[48] to download the software and to use the 2 GB of provided storage space (or the additionally purchased 20 GB[49]), and must validate the license monthly.[50]

Although investors applauded the move, the reaction across segments of Adobe’s user base was swift.[51] This shift has been met with mixed reviews by both corporations and independent designers, with many people expressing their displeasure on the web[52][53][54] and through multiple Internet petitions[55] calling upon Adobe to continue selling creative software under the perpetual licensing model.[56] Among these was a Change.org petition which reached over 30,000 signatures within a few weeks of the announcement.[57] As of May 29, 2014, there are 47,881 signatures.[58]

According to the critics, the move to a perpetual rental scheme was highly disruptive to many users,[59] and caused an unprecedented loss of trust in Adobe as a company and an attendant rise in anxiety among their customers.[60][61] Users noted that they have not always wanted, nor could they afford, to upgrade to the newest versions of the software, and the new licensing was essentially forcing them to do this.[62] College officials expressed their concern with the new licensing terms, worried about rising costs and have asked about switching to alternative products.[63] Adobe VP of Creative Solutions responded that they: "expected a higher degree of this type of reaction from the hobbyist photographic community".[64] Despite a storm of customer criticism over Adobe's move to subscription-only pricing,[65] the company announced that it would not sell perpetual licenses to its software alongside the subscriptions - "We understand this is a big change, but we are so focused on the vision we shared for Creative Cloud, and we plan to focus all our new innovation on the Creative Cloud".[66]

Online articles began offering examples of replacements of Photoshop,[67][68] Illustrator, and other programs,[69][70][71] with competing products such as CorelDRAW,[72] PaintShop Pro,[73] and Pixelmator[74] directly offering alternatives, and launching promotions for dissatisfied Adobe customers.[75] Adobe, however, claimed that Creative Cloud is its "highest customer satisfaction product in the creative space" and that even prior to Adobe's move to a pure subscription model, "more than 80 percent of customers who bought products from Adobe's Web site picked CC over CS." [76]

Creative Cloud has been criticized for broken file syncing, one of its core features.[77][78] In May 2013 Adobe announced that it was suspending the file-sync desktop preview "for the next couple of weeks".[77] Reviewers of Creative Cloud were disappointed with the functionality of the cloud storage[79][80][81] and were "far from convinced by Adobe's subscription model".[82] Users were concerned that they would be forced to upgrade their computer hardware when it is no longer supported by the current version of the Creative Cloud software.[83]

Although Creative Cloud was expected to curtail the piracy of Photoshop,[84] which is one of the most pirated pieces of software,[85] Creative Cloud was hacked and its applications made illegally available a day after it officially launched.[86][87] However, Adobe claims that Creative Cloud will be more accessible and provide better value – “We believe in fighting piracy of software by making the right software for the right people at the right price”.[88]

The service has been criticized for its price, which is higher in Europe than in the US and according to Adobe is based on "customer research that assesses the value of the product in the local market".[89] Critics noted that Adobe lists 29 supported currencies, whereas boxed versions could be installed in any of the world’s 249 territories without issue.[90] Current users of Creative Suite 3 and higher get discounts for the Creative Cloud service for a limited time, after which the subscription cost reverts to the regular price.[50] Creative Cloud has also been criticized for its Terms of Use, a license agreement that according to the critics raises issues with privacy, predictability and fairness for the customer.[91][92][93]

In May 2014 the service was interrupted for over a day due to a login outage leaving graphics professionals locked out of Creative Cloud.[94][95][96][97][98] Adobe apologized for this global Creative Cloud failure[99] and thanked users "for bearing with us".[100] When initiatlly asked whether customers would be compensated, the company's Customer Service responded: "We cannot offer compensation for the outage. I'm so sorry again for the frustration."[101][102] Adobe later announced that it would review compensation on "a case by case basis".[103] The outage was heavily criticized, as was Adobe's Software as a Service model in general.[104]

Source code and customer data breach[edit]

On October 3, 2013, the company initially revealed that 2.9 million customers' sensitive and personal data was stolen in security breach which included encrypted credit card information.[105][106][107][108][109]

A 3.8 GB file stolen from Adobe and containing 152 million usernames, reversibly encrypted passwords and unencrypted password hints was posted on AnonNews.org.[110] LastPass, a password security firm, said that Adobe failed to use best practices for securing the passwords and has not salted them.[111] Another security firm, Sophos, showed that Adobe used a weak encryption method allowing to recover a lot of information with very little effort.[112][113] Facebook and Evernote began notifying their users who used the same email addresses for their accounts as those compromised in the Adobe breach.[114][115] According to an IT expert, Adobe has failed its customers and ‘should hang their heads in shame’.[116]

Many of the credit cards were tied to the Creative Cloud software-by-subscription service.[117] Adobe offered its affected US customers a free membership in a credit monitoring service, but no similar arrangements have been made for non-US customers.[118][119] When a data breach occurs in the US, penalties depend on the state where the victim resides, not where the company is based.[120]

A class-action lawsuit has been filed against Adobe for failing to safeguard the login credentials and financial information of consumers who used Adobe’s Creative Cloud service[121][122] - "In this case it is alleged that Adobe requires many of its consumers to keep active credit and debit card numbers on file but did not safeguard them from hackers".[123] Experts cited in the lawsuit claim there will be future breaches by hackers resulting from Adobe's "shoddy security protocols" and reliance on a "software-as-a-service" system.[121]

After stealing the customers' data, cyber-thieves also accessed Adobe's source code repository, likely in mid-August 2013.[124] Because hackers acquired copies of the source code of Adobe proprietary products,[125] they could find and exploit any potential weaknesses in its security, computer experts warned.[126] Security researcher Alex Holden, chief information security officer of Hold Security, characterized this Adobe breach, which affected Acrobat, ColdFusion and numerous other applications, as "one of the worst in US history".[127] Adobe also announced that hackers stole parts of the source code of Photoshop, which according to commentators could allow programmers to copy its engineering techniques[128] and would make it easier to pirate Adobe's expensive products.[129]

According to Hold Security, a firm which discovered 40 GB of Adobe's source code[130] on a server of a Russian-speaking hacker group,[131] the "disclosure of encryption algorithms, other security schemes, and software vulnerabilities can be used to bypass protections for individual and corporate data" and may have opened the gateway to new generation zero-day attacks.[132] Hackers already used ColdFusion exploits to make off with usernames and encrypted passwords of PR Newswire's customers, which has been tied to the Adobe security breach.[133][134] They also used a ColdFusion exploit to breach Washington state court and expose up to 160,000 Social Security numbers.[135]

Public relations[edit]

Adobe ranked no. 5 on a list of Internet’s 9 Most Hated Companies, based on a 2013 survey on Reddit.com.[136] Adobe's Reader and Flash were listed on The 10 most hated programs of all time on TechRadar.com.[137]

According to critics, Adobe's PR deteriorated after the company introduced the Creative Cloud subscription-only licensing model.[138] A class-action lawsuit leveling claims of unfair business practices and breach of contract related to a massive security breach has been filed against Adobe in a California federal court.[139]

Employee antitrust litigation[edit]

A class-action lawsuit alleging that the company suppressed employee compensation was filed against Adobe, and three other Silicon Valley-based companies in a California federal district court in 2013.[140] In May 2014 it was revealed the four companies, Adobe, Apple, Google, and Intel had reached agreement with the plaintiffs, 64,000 employees of the four companies, to pay a sum of $324.5 million to settle the suit.[141]

Investor relations[edit]

Investors applauded Adobe's cloud-focused rental model and did not take notice of the criticism of Creative Cloud or the massive security breach which Adobe and its customers suffered.[142][143]

Corporate affairs[edit]

Leadership[edit]

Executive Board[144][145]
Charles Geschke Co-Chairman
John Warnock Co-Chairman
Shantanu Narayen President & Chief Executive Officer
Mark Garrett Executive Vice President and Chief Financial Officer
Donna Morris Senior Vice President, People and Places
Kevin M. Lynch Senior Vice President & General Manager, Document Services and Acrobat

Company events[edit]

Arguably, one of Adobe's few missteps on the Macintosh platform was their failure to develop their own desktop publishing (DTP) program. Instead, Aldus with PageMaker in 1985 and Quark with QuarkXPress in 1987 gained early leads in the DTP market. Adobe was also slow to address the emerging Windows DTP market. However, Adobe made great strides in that market with the release of InDesign and its bundled Creative Suite offering. In a failure to predict the direction of computing, Adobe released a complete version of Illustrator for Steve Jobs' ill-fated NeXT system, but a poorly produced version for Windows.

Despite these missteps, licensing fees from the PostScript interpreter allowed Adobe to outlast or acquire many of its rivals in the late 1980s and early 1990s.

In 1992, Adobe acquired OCR Systems, Inc.; in 1994, the company acquired Aldus Corporation. On May 30, 1997, Adobe reincorporated in Delaware by merging with and into Adobe Systems (Delaware), which had incorporated on May 9, 1997. Adobe Systems Incorporated (Delaware), the surviving corporation, changed its name to Adobe Systems Incorporated concurrently with the merger.[146]

The company acquired GoLive Systems, Inc. and released Adobe GoLive in 1999 and began shipping Adobe InDesign as a direct competitor to QuarkXPress and as an eventual replacement for PageMaker. In May 2003, Adobe acquired Syntrillium Software, adding Adobe Audition to its product line. In December 2004, French company OKYZ S.A., makers of 3D collaboration software, was acquired. This acquisition added 3D technology and expertise to the Adobe Intelligent Document Platform.

On December 12, 2005 Adobe acquired its main rival Macromedia in a stock swap valued at about $3.4 billion, adding Adobe ColdFusion, Adobe Contribute, Adobe Captivate, Adobe Acrobat Connect (formerly Macromedia Breeze), Adobe Director, Adobe Dreamweaver, Adobe Fireworks, Adobe Flash, FlashPaper, Adobe Flex, Macromedia FreeHand, Macromedia HomeSite, Macromedia JRun, Adobe Presenter, and Macromedia Authorware to Adobe's product line.[147][148][149]

In January 2007, Adobe Photoshop Lightroom was released to assist photographers in managing digital images and post production work. Adobe acquired Scene7 in May of the same year. The company makes an image processing and display platform used in many retail sites on the web. In July, Adobe released Soundbooth. This product was not intended to replace the existing Adobe Audition but merely to provide an environment for professionals not specializing in audio. On August 3, 2007, the company announced their plans to discontinue development of Authorware, the “visual authoring tool for creating rich-media e-learning applications for delivery on corporate networks, CD/DVD, and the Web.”[150] Authorware was one of the development tools acquired in the Macromedia/Adobe merger. It was replaced by Adobe Captivate. In October, the company acquired Virtual Ubiquity, along with its online word processor, Buzzword.

On November 12, 2007, CEO, Bruce Chizen resigned. Effective December 1, he was replaced by Shantanu Narayen, Adobe's current president and Chief Operating Officer. Bruce Chizen served out his term on Adobe's Board of Directors, and then continued in a strategic advisory role until the end of Adobe's 2008 fiscal year.

Adobe released Adobe Media Player in April 2008. On April 27, Adobe discontinued development and sales of its older HTML/web development software, GoLive in favor of Dreamweaver. Adobe offered a discount on Dreamweaver for GoLive users and supports those who still use GoLive with online tutorials and migration assistance. On June 1, Adobe launched Acrobat.com, a series of web applications geared for collaborative work.[151] Creative Suite 4, which includes Design, Web, Production Premium and Master Collection came out in October 2008 in six configurations at prices from about USD $1,700 to $2,500[152] or by individual application.[153] The Windows version of Photoshop includes 64-bit processing.[153] On December 3, 2008, Adobe laid off 600 of its employees (8% of the worldwide staff) citing the weak economic environment.

Adobe announced two acquisitions in 2009: on August 29, it purchased Business Catalyst,[154] and on September 15, it bought Omniture.[155] On November 10, the company laid off 680 employees.[156] Adobe announced it was investigating a "coordinated attack" against corporate network systems in China, managed by the company.[157] This same attack was also brought against Google and over 20 other companies. Adobe announced the new Creative Suite series (CS5) launched globally Monday, April 12, 2010. New software such as Flash Catalyst and Business Catalyst were also announced.

Adobe's 2010 was marked by continuing front-and-back arguments with Apple over the latter's non-support for Adobe Flash on its iPhone, iPad and other products.[158] Apple CEO Steve Jobs claimed that Flash was not reliable or secure enough, while Adobe executives have argued that Apple wish to maintain control over the iOS platform. In April 2010, Steve Jobs published a post titled "Thoughts on Flash" where he outlined his thoughts on Adobe Flash and the rise of HTML 5.[159] In July 2010, Adobe bought Day Software[160] integrating their line of CQ Products: WCM,[161] DAM,[162] SOCO,[163] and Mobile[164] and bringing along Chief Scientist Roy Fielding principal author of HTTP and co-founder of the Apache software foundation.

In January 2011, Adobe acquired Demdex, Inc with the intent of adding Demdex's audience-optimization software to its online marketing suite.[165]

At PhotoShop World 2011, Adobe unveiled a new mobile photo service.[166] Carousel is a new application for iPhone, iPad and Mac that uses Photoshop Lightroom technology for users to adjust and fine-tune images on all platforms.[166] Carousel will also allow users to automatically sync, share and browse photos.[166] The service was later renamed to "Adobe Revel".[167]

On November 9, 2011 Adobe announced that they would cease development of Flash for mobile devices following version 11.1. Instead they will be focusing on HTML 5 for mobile devices.[168]

On December 1, 2011, Adobe announced that it has entered into a definitive agreement to acquire privately held Efficient Frontier.[169][170]

In December 2012, Adobe opened a new 280,000 square foot corporate campus in Lehi, UT.[171]

Financial information[edit]

Adobe Systems entered NASDAQ in 1986. Its revenue has grown from roughly $1 billion in 1999 to roughly $4 billion in 2012.[172] Adobe's fiscal years run from December to November. For example, the 2007 fiscal year ended on November 30, 2007.

Social responsibility[edit]

Adobe promotes several ongoing social responsibility initiatives, including Adobe Youth Voices and Creativity Scholarships through the Adobe Foundation.[173][174]

As part of its Lehi, Utah, campus construction, Adobe supported an Artist In Residence program at Thanksgiving Point Institute, in which artist Andrew Smith constructed a kinetic sculpture to be placed in the new Adobe campus building.[175][176]

See also[edit]

References[edit]

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External links[edit]