No doubt you’ve heard the news. The two major players in graphics software, Adobe Systems and Macromedia, have agreed to become one. The all-stock transaction, in which Adobe will acquire Macromedia, is valued at $3.4 billion and requires both shareholder and regulatory approval before it is finalized. The entire process will take at least six months to complete.

The official statement, of course, refers to the usual synergies between the two companies, but is light on specifics, except for the makeup of the executive team. Adobe’s two present leaders, CEO Bruce Chizen and president and chief operating officer Shantanu Narayen will retain their positions, and Stephen Elop, Macromedia’s present and chief executive officer, will assume the job of president of worldwide field operations of the combined company.

With Adobe in the driver’s seat, the first questions are the usual ones when such a deal occurs. First of all, how many employees will be laid off, and, second, what’s the future of the Macromedia applications that compete with Adobe’s? Will Dreamweaver continue to be developed, for example, or will its features be integrated into Go Live? The answer is obvious, for it would not make much sense to sell two competing applications to the same audience. The same holds true for FreeHand, which many graphic artists regard as the only true competitor to Illustrator.

What’s more, Adobe not only gets control of the ever-popular Flash multimedia graphics format and such applications as Flash MX, but Director MX as well. And let’s not forget those Shockwave plugins for your browser, which are, by the way, bundled with Mac OS X, not to mention ColdFusion.

It’s clear there are few downsides to Adobe. In one fell swoop, it gets rid of its major competition, and gets a control of a suite of powerful graphics applications. At the same time, it will give you fewer choices, and that’s not a good thing. What incentive will Adobe have to make major improvements to GoLive and Illustrator without having a powerful competitor to deal with? Once the basic integration process, if any, is done, and the proper flourish is made over new versions of both programs at some future occasion, will development simply stall?

Obviously, InDesign will continue to improve, since it is locked in a tight battle with QuarkXPress for supremacy in the desktop publishing arena. Competition breeds innovation.

There may, however, be other reasons for the buyout, and they all focus on a certain company based in Redmond, WA. You see, the long-delayed upgrade to Windows, Longhorn (or whatever it’ll be called), will include a graphics system known as Avalon, which will include rich media capabilities that may compete with, for example, Flash and perhaps Acrobat. So the Adobe/Macromedia combo may amount to a frontal assault against Microsoft’s attempts at dominance.

Obviously, two heads are better than one, and the talents of Adobe and Macromedia, once brought together, could, conceivably, result in some great new products or at least some fascinating new features for existing products.

And where does that leave the Macintosh? Well, if the new Adobe is concentrating its efforts to avoid being overwhelmed by Microsoft in some areas, does it mean less attention will be paid to Mac OS X? As it is, Adobe and Apple aren’t always in sync. Apple’s Final Cut Pro, for example, killed development of the Mac version of Premiere. Not all Adobe products are available in Mac form as it is, and, without the competition from Macromedia, does it portend a further erosion of Mac compatibility?

Maybe, maybe not. As it is, Adobe and, in fact, Macromedia, make an awful lot of money from Mac users, who, of course, continue to dominate the graphics market. It wouldn’t make a whole lot of sense to abandon that critical revenue base. On the other hand, without compelling alternatives, there wouldn’t be as much incentive to release Mac and Windows products simultaneously. Is it also possible that future Mac versions of, say, GoLive, Illustrator and Photoshop will have fewer features than their Windows counterparts.

Of course, this is all speculation, and there will be plenty of it between now and the time the deal closes. On this week’s episode of The Tech Night Owl LIVE, multimedia wizard David Biedny, who has used both Adobe and Macromedia products for years, will provide his expertise on the matter. He was there, for example, when Photoshop 1.0 came out, so you can expect his usual illuminating and, as usual, sharply pointed insights.

This article was posted on Saturday, April 23rd, 2005 at 1:20 AM and is filed under News and tagged with: Adobe Systems, Bruce Chizen, Executive Team, Graphic Artists, Mac Os X, Powerful Graphics, Stephen Elop, True Competitor.