Postscript Adobe Product

Postscript Adobe Product Adobes first product, Postscript ®, was a driving force behind the desktop publishing revolution of the mid 1980s. Postscript provided an interface between computer program and an output device such as a printer. It comprised of three parts; a page description language which was open, documented and free, an interpreter which was licensed to output device manufacturers, and fonts which were sold to end customers such as graphic artists. The first postscript products were introduced in 1985 through a strategic alliance among four firms: Adobe, Apple, Aldus, and Linotype. The combination of products from these firms sparked the desktop users could create news letters and other documents that had a professional look and feel: documents could integrate graphics and text using professional quality fonts. The result was accomplished through a system of products. Aldus PageMaker software, which ran on Apple Macintosh, enabled the creation of documents that integrated text and graphics, PageMaker required a postscript device for printing. The Apple Laser writer was the first postscript printer and incorporated a postscript interpreter licensed from Adobe. Finally, professional looking documents only required high quality fonts such as Times Roman or Palatino, which typically were only available to professional publishers. Linotype, a firm with over 100 years of experiences in the typesetter industry, licensed a set of its most popular fonts to Adobe so that Adobe could offer them in postscript format. The Laser Writer came with 35 postscript fonts build in Linotype also introduced a high-end postscript image setter so that PageMaker documents could be used in professional publishing. By 1989, postscript had become the defacto standard for printing in the graphic arts and publishing industries. A most 100% of high-end image setters on the market incorporated postscript, while penetration in the general laser printer market reached only about 25%, penetration of Postscript in laser printers used by graphic artists was closer to 100%. Adobe also leveraged the underlying graphics technology of postscripts in applications software for the graphic arts community. The first end-user application, Adobe illustrator, was introduced in March 1987 and gained wide acceptance among graphic artists. Illustrator created output Postscript output and helped to create demand for Postscript printers. Adobe also acquired a number of software products including Photostop for digital image editing in 1989, and Aldus PageMaker in 1993. These products were extremely successful, with Photostop capturing over 90% of the market for photo-editing software. Ownership and leveraging of the Postscript standard had reaped huge rewards for Adobe; between 1984 and 1995, revenue had grown from $2.2 million to $762 million- a compound annual growth; rate of 70%. Adobes share price growth had been equally impressive, increasing at an average rate of29% between 1986, when the firm went public and 1995. In order to create PDF documents users had to purchase either Acrobat  ® Exchange for $195, or a more sophisticated product, Acrobat  ® Distiller for $695. As with the Postscript standard, the specification for PDF was open. By using documentation from Adobe, other firms could create files PDF format. Sales of Acrobat however were originally quite disappointing and reached only about $25 million in 1993. Given the advent of the internet, Adobe modified its Acrobat strategy. Instead of focusing exclusively on document exchange among workers within a corporation, Adobe also targeted internet users. The goal I was to make PDF the de facto standard for posting and exchanging documents on the internet. Question 2. In order to encourage software developers to use the Postscript language, Adobe made it open to anyone for free. The language was meticulously documented in what programmers fondly called â€Å"The Red Book†, and strong technical support was provided to third party developers working with the language. As a result, the number of applications supporting Postscript increased from 180 in 1986 to over 5,000 by 1991. To accelerate the diffusion of Postscript output devices, Adobe developed a boilerplate controller design based on the Motorola G8000 chip. Printer manufacturers interested in licensing Postscript had free access to this design, thus accelerating the development time for Postscript products. In addition, Adobe engineers often worked on joint product development teams with customers in order to help with the design of customized Postscript interpreters. The number of Postscript licenses increased from just one, Apple in 1985 to 60 by 1994. Adobe invested a large amount in creasing its own library of Postscript fonts. In 1986, Adobe invested 16% of sales in font development, and dollar investment continued to increase from 1985 through 1992. The number of Postscript fonts in the Adobe collection increased from 35 in 1985 to 2000 in 1994. These fonts were valued most highly by graphic artists designing pages for professional publishing. Adobe encouraged adoption of the Acrobat Reader by changing its previous policy of charging $50. The Acrobat Reader became widely available for free. In 1994, an alliance was made with AOL made the Acrobat Reader available to all AOL users. Adobe also established relationships with a number of computer vendors such as Compaq, Dell, and Sony to preload the Acrobat Reader on Personal Computers they sold. In 1995 free downloads of the Acrobat Reader were made available from the Adobe website. When users visited a site with PDF content they were instructed to click on a link to Adobe.com to get the free Acrobat Reader. Downloads of the Acrobat Readers explored starting in 1997, and by July 2000 over 197 million Acrobat Readers had been downloaded, with ongoing downloads of about 6 million more each month. Traffic to the Adobe site was also significant with about 11 million unique visitors a month. Downloads also drove sales of the full Acrobat product, needed for PDF creation. Adobe mark et research indicated that 88% of full Acrobat purchasers had used the Acrobat Reader prior to buying the full product. Question 3. Standard wars and battles for dominance in the market between incompatible technologies are products of the information age. Adobe announced it would release the entire PDF specification (current version 1.7) to the International Standards Organization. PDF has reached a point in its maturity cycle where maintaining it in an open standards manner is the next logical step in evolution. Not only does this reinforce Adobes commitment to open standards, but it demonstrates that open standards and open source strategies are really becoming a mainstream concept in the software industry. PDF will go from being an open standard/specification and de facto standard to a full blown dejure standard. (http://www.ameinfo.com/40724.html) Adobe has found that with Postscript and PDF, publishing the specifications, making them open but not open standards is the right path. This is because once something becomes a standard driven by a standards body, it moves to a glacial place Ad innovation slows down significantly because everybody has to agree and compromise. If it is made a totally open source, they do not get a return on investment. They believe that by opening up the specification, they allow other people to take advantage of it. However, they still own the source and get to innovate around that standard more quickly. (http://www.ameinfo.com/40724.html) Uncertainty about the market of e-Books hinged on a number of factors. One of the major impediments to adoption of E-Books was on-screen readability. Anti-aliasing technology had been developed by both Adobe (Cool Type) and Microsoft (Clear Type), improving text resolution by up to 300% e-Book resolution, however, was still not close to matching the quality of paper. So far the place of e-Books was similar or higher than that of print books, constraining demand. In addition, dedicated e-Books reading devices had been relatively expensive, costing a minimum of $250. Finally, the selection of e-Books was still quite limited and e-Books formatted for one device could generally not be used on another. Depending upon their assumptions about pricing and standards, analysts had different perspectives on the potential of the market. After the well publicised battle between VHS and Beta formats in the VCR industry, both produces and consumers were wary of standards war. No consumer wanted to be stuck with the equivalent of Betamax CVR, an orphan product with no tapes to play on it. Likewise, producers did not to be on the losing end of a standards war. It was unclear how standards in the e-Book market would evolve. While Microsoft had changed head on into the consumer it is wondered whether Adobe should instead focus elsewhere. Other segments, such as professional and technical users, while similar than the general consumer market, seemed to place more value on what e-Books had to offer and were leading in their adoption. In addition, Adobes superior graphics capability was more highly valued by the professional market. Adobe can win the standards war by creating alliances with other software companies. A good company is Google. Relative market caps show Adobe at $24 billion, Google at $148 billion and Microsoft at $296 billion. Google needs something like Adobe and Microsoft does not have the same perspective. This could be a strategic relationship to help Adobe win formats/standards war against Microsoft. Adobe may already own the market for electronic documents thanks to PDF, but the company knows that Microsoft has a habit of showing up late to a party and stealing the crown. In turn Adobe is beta testing a new project it calls â€Å"mars† which is an answer to Microsofts new XPS format. (http://www.inforules.com/summaries.htm) Negotiations over standardization and interconnection and standardization are critical once a network has been launched Adobe can explore seven key assets that show its ability to successfully wage a standards war. These are; intellectual property rights, control over an installed base of users, ability to innovate, manufacturing abilities, first mover advantages, strength in complements and brand name reputation. The standard wars are especially bitter and crucial to business success in markets with string network effects that cause consumers to play high value on compatibility. (http://www.inforules.com/summaries.htm) Pre-emption is one of the two crucial market place tactics that Adobe can use in its standards battle. The logic of pre-emption is straight forward: build an early lead so positive feedback works for you and against your rival. The same principle implies in markets with learning by doing: the first firm to gain significant experience will have lower costs and can pull even further ahead. (Shapiro, Varian 1999) Expectations management is the second by tactic in standard wars. Expectations are a major factor in consumer decisions about whether or not to purchase a new technology. Just as incumbents will vary to knock down the viability of new technologies that emerge, so will those very entrants strive to establish credibility. (Shapiro, Varian 1999) Reference: Carlo Shapiro, Hal R. Varian. Information Rules. A Strategic Guide to the Network Economy. Retrieved from http://www.ameinfo.com/40724.html on 5th March 2008 Carlo Shapiro, Hal R. Varian. The Arts of Standard Wars, California Management Review, Vol.41, No.2 1999. http://www.inforules.com/summaries.htm http://www.business.ualberta.ca/mlounsbury/ORG658/readings/standard%20wars.pdf