More than a flash of success

IN CONVERSATION

Adobe has acquired Virtual Ubiquity and its online word processor, Buzzword. It has also added a new service Share, which allows users to share, publish and organise documents online.

Clearly, Adobe is bolstering its position in new areas, as Naresh Gupta, managing director of Adobe India and senior vice-president of the print and classic publishing unit of Adobe Inc, tells Priyanka Joshi

Adobe had an extraordinary quarter and the going looks good. What is India's contribution to the bottomline?

Our third quarter sales were a record $851.7 million, up from $602.2 million in the third quarter of 2006. Expectations are that in the fourth quarter, our revenue should be $860-$890 million. This quarter was driven primarily by Creative Suite 3, but we had good, solid revenue growth across all our businesses.

We intend to position India not as a cost-saving destination but as any other development centre. Nearly 25-30 per cent of Adobe worldwide's research and development (R&D) is being done in India, with Indian engineers. We invest 19 per cent of our revenues in R&D and India is not a small set-up. It employs close to 1,100 people, who have filed for over 33 patents in the last nine years.

With revenues expected to touch $3 billion this year, up from less than $2 billion in 2005 before it bought Macromedia, Adobe is definitely riding high...

Definitely. For the present "Facebook generation", we are looking at opportunities in gaming, video and online multimedia delivery tools. Helping partners monetise the in-game advertising stream will be our biggest target now.

As a leader in rich Internet applications development, Adobe will revolutionise the way people come together to engage with ideas, information and each other.

Flash video, for one, has been proliferating on the web. Today, Flash video works within the browser with content streamed from servers anywhere over the Internet.

But you might think of movie download services that want to use Flash video to deliver movies to desktops, with the ability to play offline.

Consumers may have a number of Flash video files on their desktop and the Adobe Media Player will allow them to manage those. The Adobe Media Player is really the next step of the entire video-publishing workflow, allowing Flash video to be a more compelling format.

Besides tightening its hold over the desktop publishing business, how will Adobe seize new opportunities thrown up by the Internet?

We are looking actively at creating rich e-learning content as the global e-learning market, which is estimated to be around $10.6 billion, is growing at 25 per cent CAGR across geographies.

The e-learning market in India is about $25 million with an annual growth rate of 17-18 per cent. Adobe has all the rich media platforms that can create engaging content and bridge the shortage of training staff. We expect the enterprise segment, which is corporate training, to be big initially.

The company, globally, is expanding beyond its core niche of photographers, videographers and web designers. Photoshop Extended targets the medical and dental imaging professions, and LiveCycle Enterprise Suite targets deep-pocketed corporate clients.

Will it be a challenge to stay ahead of competing products from Microsoft and of open-source software that rivals Adobe mainstays such as Flash?

Adobe's Flash Player is installed on approximately 98 per cent of internet-enabled desktops. There is no doubt that Flash has been driving the web video revolution for some time.

What distinguishes Adobe's strategy is our belief in developing across platforms like Mac, Windows and Linux, and also across non-PC devices.

With Flash Lite and FlashCast, Adobe has been focused on mobile services for quite a while. I think it's a huge market opportunity. In fact, the Adobe Reader for mobile devices was completely done in India.

But we continue to leverage our core strengths, which are authoring tools. After all, the bulk of digital content is being authored in our applications. But the fact that it's a huge market opportunity will attract other competitors, including Microsoft.