Autonomy Corporation plc announced it has entered into a definitive agreement to acquire etalk Corporation, a provider of enterprise-class contact center products, for a purchase price of US$70 million payable in a combination of cash and Autonomy ordinary shares, with an opportunity to earn additional consideration payable in Autonomy ordinary shares upon meeting and exceeding certain future performance-related targets. Combined Autonomy and etalk products are expected to be generally available within a quarter. Autonomy is expecting to discontinue certain aspects of the etalk business. The transaction is expected to be accretive to Autonomy’s earnings per share within six months from closing, excluding the impact of one-time and non-cash acquisition related charges. http://www.autonomy.com
Coveo Solutions Inc. announced that they have signed an OEM agreement that will allow Acuity to complement the text mining capabilities of its product with the search functionality of Coveo Enterprise Search (CES). Acuity provides software that presents corporate information in a visual way. Using computational linguistics and pattern recognition, Acuity helps users to automate the discovery process and find the structure in unstructured data by creating charts and other graphics to facilitate analysis. ,
I’m way behind in planned blog entries from last week’s conference, but this has jumped to the top of the queue. Rather than repeat points made by others I’ll point you to Thad’s post, and a couple of other postings and focus on a point I haven’t seen made yet. Tim’s skepticism of Flash. But while every analyst under the Sun will talk about what this means to Microsoft, there is an aspect of this that needs more attention.
Whatever the combined suite of Adobe and Macromedia apps ends up looking like, it will be a mammoth suite with a combination of document and web capabilities that will compete with Microsoft Office, which will also have a combination of document and web capabilities. The real competition won’t be immediate because the difference between creative and knowledge worker tools is still pretty wide, and it won’t be complete because there will always be a need for a difference. However, over time the differences will be managed more by configuration of functions than by buying separate applications.
Thinking about a future dominated by these huge suites you can’t help but think “What’s the alternative?”. Many of us author less and less in big powerful applications, and more with simple editing tools (email, blogs, HTML forms, Notepad etc.). There are two reasons for this. One is that “fast and easy” is critical for efficient communication and we naturally gravitate to it. Second, none of the authoring tools available today have succeeded in allowing us to easily author once for both documents and web pages. The big feature-heavy suites are good to have around, but we also need new authoring tools that are light, flexible and create content that is marked-up just enough to easily share with applications, whether office or web suites, or enterprise applications.
How did we become sheep? In fact eunuched sheep? Why is anyone pretending that the acquisition of Macromedia by Adobe has anything to do with the customers of either company? This is a deal only for the management and shareholders of Adobe and Macromedia. Anyone who pretends otherwise is a fool. Graphic designers and webmasters should be greeting this with the same enthusiasm that Buckingham Palace received the news of Prince Charles and Camilla.
Adobe is famous for making acquisitions that could be funded from the expense accounts of its senior executives. Most amount to spare change (and have a similar impact on Adobe’s corporate fortunes). Adobe’s last big purchases were Aldus and FrameMaker, both in the mid-90s. As far as I can tell PageMaker is the only extant product remaining from Adobe’s purchase of Aldus, and it’s on life support. A year ago Adobe made it clear to PageMaker users to upgrade to InDesign pronto, or face product upgrade and customer support hell. Adobe continues to pretend that FrameMaker is a going concern, but it’s an ill-kept secret in the industry that the next version of InDesign will be announced at FrameMaker’s graveside.
What’s the win for either company’s customers? Better products? Better customer service? More innovation? Give me a break! These are two great companies, leaders in their field both in terms of innovation and customer service. But they are competitors. And in the dog-eat-dog world that we call “capitalism,” the larger dog eats the Chihuahua for lunch, and we all call it “synergy.”
In today’s CNET we were offered the kind of analyst’s quote that passes for informed critique:
“Consolidation in the industry is not always the best thing,” said Bruce Heavin, co-founder of Lynda.com. “I’ve always seen Macromedia and Adobe get better when they were on each other’s heels. When Adobe had LiveMotion, I saw better things coming out of Flash. And GoLive has helped Dreamweaver progress.”
That said, Heavin said the acquisition could improve compatibility between products.
“I think it will make it easy for these programs to talk to each other,” Heavin said. “It could wind up making it easier for the customers and the users… In the end I think this will be somewhat (emphasis mine) of a good thing.”
I’d never heard of lynda.com before today. An authoritative expert, no doubt — the site helps “media designers & communicators understand how to use professional tools and design to enhance visual communication through web, print, and motion graphics.”
My first reaction to today’s news was “where are they going to dump FreeHand?” You may recall that Adobe ended up with FreeHand once before, after acquiring Aldus in 1994. Legal action by Altsys, FreeHand’s developer, and some semblance of a Federal anti-trust department, forced Adobe to return all rights for FreeHand to Altsys. And then Altsys promptly sold itself to Macromedia.
Those of us more than 11-years-old recall that Altsys’ big product was not FreeHand but Fontographer (FreeHand may have generated more cash, but Fontographer was the product that put Altsys on the map). Fontographer was the first, and, as far as I know, remains the best product for creating digital fonts (OpenType fonts excepted). I’d long ago forgotten about it, but see tonight that it remains available, buried on Macromedia’s site. So Adobe got that in the bargain (let this serve as a reminder to Adobe management — they probably didn’t notice along the way!).
Theof the announcement is a model of corporate bafflegab:
“Why are the companies joining now?”
“Both companies are experiencing great success and momentum and have great opportunities ahead of them, and believe that together, they will be better able to achieve their combined vision with greater synergy. We also believe the joining of two healthy companies will lead to a more successful combined company.”
Wow! That certainly makes sense to me!
Analysts who are trying to be provocative are positioning the takeover as a stab against Microsoft. According to Monday’s Wall Street Journal:
“Microsoft already regards PDF’s success as a long-term threat. The next version of Windows, code-named Longhorn and due out next year, is expected to include features to move documents around companies and the Internet, and aimed at eliminating the need for PDF.
‘There’s a huge battle brewing’ between Adobe and Microsoft, said Andy Warzecha, senior vice president of Meta Group, a unit of technology-research firm Gartner Inc., in Stamford, Conn.'”
Zowie! That faux-battle is a subject for a separate critique. But tell me how does the acquisition of Macromedia make the least bit of difference in this “battle”? Adding Flash to PDF makes no sense whatsoever (though no doubt, some engineers will find the bandaids to do so). SVG was Adobe’s “Flash-killer.” It seemed like a joke at first, but has gained W3C endorsement (including endorsement from Macromedia). It’s a more complex format than Flash, and far less ubiquitous, but offers significant features that Flash doesn’t even reach for. On top of that, SVG is a direct descendent of PDF, and shares much of the code base. Flash is the bastard cousin of PDF.
As I think about the acquisition tonight, only two things are clear to me. First, Adobe needed to do something that would make headlines to justify its recently inflated share price and reputation. With its share prices suddenly inflated into the stratosphere Adobe could afford to make an all-stock deal for Macromedia (Macromedia shareholders take note: sell ASAP). Second, there’s no better time to make an obviously anti-competitive acquisition than during the reign of George Bush II.