Protecting the throne: Adobe debuts Creative Suite 3

Adobe's $3.4 billion acquisition of Macromedia in 2005 was viewed as a master stroke for the market leader in digital creativity tools. It matched the stars of Adobe's portfolio, including Photoshop and InDesign, with Macromedia's Dreamweaver and Flash, giving the company a complete set of "best in breed" titles that executives hope will solidify its place at the top.

Today, Adobe will start to see just how much the acquisition was worth as it releases Creative Suite 3 into a market that's about to become more competitive.

The massive Creative Suite 3 (CS3), a revamped set of products that account for more than half of the company's $2.58 billion in revenue, includes tools for photographers, graphic artists, audio engineers, Web designers and developers, and filmmakers.

It's the first major release of Adobe's flagship creative products since the Macromedia acquisition, and the largest in company history.

Analysts say the product is entering the $3 billion market for software used to create digital content in a strong position.

"When they combined the two companies they basically just took the best of breed," said Chris Swenson, analyst at market researcher NPD Group. "They have the leading tools for every single product category."

But even before the full CS3 line -- including 13 programs sold individually or in six packages — hits the market this summer, a new contender is stepping up to challenge Adobe's supremacy in digital creativity products.

Microsoft plans to release Expression Studio, a set of tools targeted at a narrower segment of digital creative professionals and Web developers, within the next month.

This brewing battle for digital creatives is not the first time the two software companies have gone head-to-head, nor is it the only place they're treading on each other's toes.

"There's a lot of other areas where these companies are competing," Swenson said. "This is just sort of the tip of the iceberg."

Forthcoming platform

Another source of competition involves Silverlight, the new name Microsoft is expected to announce today for a forthcoming platform designed to allow developers to build multimedia applications that will run on any Web browser, and on either the Mac or Windows operating system.

It was formerly known as Windows Presentation Foundation Everywhere, or WPF/E, and is seen as a competitor to Adobe's Flash, among other things.

Brian Goldfarb, group product manager in Microsoft's developer division, said the company is trying to make a consumer-friendly brand that users will plug in to their browsers.

Adobe, on the other hand, is honing in on the desktop, traditionally Microsoft's territory, with a new development environment code-named Apollo. It aims to allow developers to build applications to run on the desktop using any major Web programming technology, including HTML, Flash or Ajax.

"[That's] important because as people are looking to do new kinds of applications, they're actually no longer accepting the fact that they can [only] use one technology," said John Loiacono, senior vice president of Adobe's Creative Solutions Business Unit. "They're combining many things."

Both Silverlight and Apollo are geared toward a new class of software called "rich Internet applications," or RIA, that have characteristics of both desktop and Web-based applications and seek to bridge the gap between the two.

"[RIA] is emerging," Microsoft's Goldfarb said. "It's still very amorphous and ambiguous as to what exactly it is."

Picnik photo-editing

One example of the technology is Picnik, an RIA from a Seattle startup that allows users to edit their photos online — a task traditionally done with a desktop application — and then share them through sites such as Flickr. (Adobe has an online version of its market-dominating picture editor, Photoshop, in the works.)

Google Maps is probably the most famous RIA, said Ryan Stewart, a Seattle RIA developer and consultant who blogs on the topic for ZDNet.

"To me, rich Internet applications combine the creative influences on the Web and the richness of the desktop to create the ultimate hybrid applications," Stewart wrote recently.

Apollo and Silverlight essentially represent new venues for which Web developers can build next-generation applications.

Meanwhile, Adobe and Microsoft are vying to get creative professionals to use their new toolsets to build those applications, which are becoming more sophisticated and attractive.

The market for the tools is growing as companies recognize the need to make their online presence stand out. Jon Peddie Research expects the digital content creation software market to reach nearly $5 billion by 2012.

As an example, Goldfarb pointed to the wide variety of travel sites on the Web today, all selling essentially the same set of products — airline tickets, hotel and rental-car reservations and other travel services.

"But people tend to have an affinity for one site or another," he said. "And why is that? It is the user experience that they provide. ... Businesses are differentiating on that."

Caleb Belohlavek, Adobe's group product manager for CS3, put it bluntly: "Our customers need to grab the attention of their customers; if not, they're going to move on."

Clear leader

Adobe is the clear leader with an established set of products in CS3, which it is calling its biggest release ever.

But the San Jose, Calif., company is not underestimating its competition, especially since the Expressions team in Redmond is led by veterans of Adobe and Macromedia.

"We do not take them for granted," said Loiacono, who spent a career at another Microsoft competitor, Sun Microsystems, before coming to Adobe. "We do not underestimate their capabilities. They're a bunch of really, really smart people and they have a lot of money to play with and a lot of resources to throw at problems."

Adobe is also concerned that Microsoft will leverage its dominant market share in other areas, particularly with software developers who use Microsoft's Visual Studio line, to push Expression Studio.

Both companies are highlighting how their tools will improve the way designers — the creative types who come up with the look and feel of a Web site or application — work with developers, who implement that vision by writing code and add back-end features for e-commerce and other functions.

Each company is taking advantage of its historical strengths to improve the designer-developer workflow.

Microsoft's Expression Studio allows developers to open a designer's work directly in Visual Studio. "There's no longer that translation process that needs to occur," Goldfarb said.

Focus of approach

Adobe's approach focuses on the designer's specialized skills. The company has standardized the user interface and file sharing across all of the CS3 programs so designers can quickly move from Photoshop to InDesign, for example.

"More and more people are getting more creative, but to be a trained designer is something very different," Loiacono said. "So we're trying to make it easy for someone who is in the design space to be able to work with someone in the development space and then be able to have that workflow go back and forth rather seamlessly."

Microsoft is also pressuring Adobe on price. While it's difficult to do a head-to-head comparison of the CS3 and Expression Studio because they contain different elements and are sold in different combinations, Microsoft is coming in well under Adobe. One example: Microsoft's Web design tool retails for $299, $100 less than Adobe's.

"I think Microsoft's going to keep Adobe honest" on price, NPD's Swenson said. But he added that the Redmond company still has an uphill battle.

"It's not an easy task that Microsoft has ahead of them to take on Adobe," he said.

Benjamin J. Romano: 206-464-2149 or bromano@seattletimes.com