Adobe has given multiple reasons for their recent announcement to withdraw their Premiere video editing software from the Macintosh platform, including decreased market share due to competition from Apple’s Final Cut Pro, Apple’s advantage in creating software on their own platform, and Apple’s advantage in marketing to Mac users through name recognition. The decision to discontinue Premiere was rumored on multiple online discussion forums earlier in the year, and Adobe hinted that some changes were coming when they announced that the PC platform had become the company’s recommended choice over Macs for using Adobe software.

Adobe has been having more market problems aside from Premiere. Photoshop is still the king of image editing, but many of their other applications have been losing market preference. GoLive once offered powerful advantages over Macromedia’s Dreamweaver, and Illustrator was the professional choice over Macromedia’s FreeHand, but that has been changing. Adobe has disappointed many users with incremental upgrades that offer few significant new features. Macromedia, on the other hand, has been pushing product development and their products reflect the investment. Combined with Macromedia’s aggressive marketing, their products are stealing serious market share from Adobe.

The classroom is another market in which Adobe has been slipping. Many Adobe products were preferred for teaching because they were considered the professional’s choice, and preferred by administration because of significant educational discounts for multiple software licenses. In recent years, Adobe’s discounts to educational institutions have become less attractive than those offered by Macromedia, sometimes to the point that three Macromedia licenses could be purchased for the same price as one license for the competing Adobe product. Over the years, many educational institutions have replaced their Adobe products with the Macromedia counterparts, not because of teaching preference but because of the cost savings. As more students in grade school and college have used Macromedia products, more of those students also choose Macromedia products upon graduating and becoming professionals.

The “cut and run” strategy Adobe has applied to Premiere has historically not solved many problems for other software companies, and it’s doubtful that this strategy will help Adobe here. Avid did themselves some damage in the 90s when they discontinued their software-only video editing offerings on the Mac platform, and the company is still trying to claw back some of those users lost in the debacle.

With Avid missing from the lower-end video editing market, Adobe had an amazing opportunity to take over with the obvious vacuum Avid’s withdrawal created. Apple recognized this same opportunity and introduced Final Cut Pro in 1999 (now making it four years old and less than half the age of Premiere). Premiere had a significant and established market at the time of Final Cut Pro’s introduction, and perhaps Adobe assumed they were the winner by default and therefore had nothing to worry about. While Adobe rested, Apple kept developing Final Cut Pro as though it were on Miracle Gro. In contrast to Apple, Adobe’s upgrades to Premiere were less than noteworthy, appearing as though they had lost interest in the product altogether. The most significant change over the years was Premiere’s drop in price, but even that wasn’t enough to convince people to keep from switching to the easier-to-use, more advanced but more expensive Final Cut Pro.

Even with a remaining significant share in the Mac video market, Adobe has decided to duplicate Avid’s decision rather than learn from it. It may never be possible to know all of the reasons for such a questionable decision, but looking at Adobe’s history reveals some insight into the company’s behavior. The story between Adobe and Aldus is a good example.

In the early 90s there were many software companies with innovative products. Aldus had changed the publishing industry altogether in the 80s with PageMaker, but wanted to expand their software offerings. Aldus achieved this by absorbing successful smaller companies or licensing their software for distribution. Silicon Beach Software, remembered for such greats as SuperPaint, Super 3D, and SuperCard, was incorporated into Aldus along with Altsys’ FreeHand and CoSA’s After Effects.

Adobe had been looking longingly at PageMaker for years, with the understanding that should Adobe combine the PageMaker layout software with their PostScript printing language, they would truly be king of the publishing markets. Because Aldus had been struggling with profits, the company finally decided to entertain Adobe’s buyout offers and in 1994 the companies were merged to create Adobe Systems. This was a great achievement for Adobe, since not only did they acquire PageMaker but they also obtained many other software titles that competed with Adobe’s existing products.

This Microsoft-like move would have been a complete coup of most of Adobe’s competition except for one problem. Altsys had specifically stated in their contract with Aldus that the FreeHand software must continue to be developed, and it was obvious that Adobe would squash FreeHand in favor of Adobe’s own Illustrator software. Eventually things were settled with a 13% devaluing of the Aldus offerings in the merger and Altsys selling FreeHand to Macromedia. Many of the consumer products that were similar to Adobe’s professional offerings were discontinued within a few years.

This is just one example of Adobe using acquisition as their answer to competition. Another software title now associated with Adobe, GoLive’s CyberStudio, was purchased by Adobe in 1999, renamed to Adobe GoLive, and Adobe’s PageMill product was discontinued in favor of the superior recent acquisition. Adobe’s own official published history, the book Inside the Publishing Revolution: The Adobe Story, proudly reports Adobe’s history of acquiring competing technology through buyouts and mergers. Between 1991 and 2003, over 23 companies were absorbed by Adobe using this business strategy. Adobe has innovated some great original products, but much of their history is buying the competition’s technology rather than inventing their own competitive solutions.

Adobe pulled Premiere from the Mac market because the Apple is too big for Adobe to buy, and Adobe doesn’t recognize any other solutions to compete against Final Cut Pro. They are facing similar problems with competition from Macromedia, but let’s hope they don’t decide to wimp out there as well. No longer certain of how to develop new products from scratch, Adobe is lost without being able to buy their way into winning their markets. Let’s hope this is something they can resolve by regaining the spirit of innovation that created the company and brought us PostScript, Photoshop, and Acrobat, and that the slide Adobe has already started does not signify their continued loss and does not turn the company into a footnote in software history.