Together these applications constitute one of the most popular software franchises around. Annually, they’re responsible for generating some $3.8 billion in revenue for Adobe, which has been selling some of them for decades. As the company’s CEO, Shantanu Narayen is responsible for preserving and growing that revenue stream and protecting the legacy of the software that drives it in a fast-changing industry.

That’s no easy task with HTML5 emerging as a threat to Flash on the Web, and tablets evolving from content- consumption devices to content-creation ones. And then there’s Apple. Since 2007, the company has refused to allow Flash on its iOS devices, essentially banning it from one of the most important and popular mobile software platforms today.

All those difficult questions and more, coming up next.

9:19 am: Here we go. Narayen’s appearance on stage is preceded by a short video.

Narayen is being coached on how to answer some of the hardest questions, like ones about HTML5.

Narayen is being a really good sport, by practicing fist bumps.

The coach gives him a lot of praise, saying that he has a man crush on Narayen.

9:22 am: Walt welcomes “the very well-prepared Shantanu Narayen” to the stage.

All joking aside, Walt launches right into it, saying that he wants to talk Flash.

Narayen says that they had an internal bet at the company on how fast Walt would ask about Flash.

Bet’s over!

9:24 am: Flash is really a small part of the company, Narayen argues.

In terms of the revenue, it’s part of a suite of offerings. Since we produce apps that allow you to produce for the Web and print, it’s actually a very small part of the company.

9:25 am: Walt’s not letting him off easy. He wants to know “what’s the deal between you and Steve Jobs?”

Narayen is glad he’s asking! (The interview coaching is already coming in handy from earlier).

It’s become fairly clear that it’s not about technology. It’s about a business model and control over a platform.

It’s control over the app store that’s at issue here. We allow people to author once and get the widest distribution possible. We’ll have 130 million phone devices that have Flash by the end of the year.

Walt says Flash struggles: “I’ve yet to test a phone where it works well on a device.”

9:27 am: Walt wants to go back to the fight with Apple. Is it because of a historical issue?

Narayen goes back to saying it’s a business-model issue: “It’s all about control of the applications running on the platform that lets the platform come to life. If you build in Flash, you can run the apps on other platforms.”

9:29 am: Walt asks about the work-around that Adobe has created since Flash isn’t available on iOS devices.

Narayen says Flash can run on an iOS device if it’s within an AIR application. “If you can build an app using our tools, and if you run it through AIR, it can be in the App Store.”

Walt asks if that’s good enough for Adobe.

Narayen: “We put customers front and center. Developers are using our tools, but it’s an extra step….We will work around any obstacles that are in our way because our goal is to help developers get their apps out.”

9:31 am: Walt’s changing the conversation to HTML5. It’s not mature, but it’s coming along. People say it will replace Flash.

Narayen addresses the threat:

“We welcome the evolution to HTML5, and are actively contributing to it.”

Good question from Walt: Why would you do that if it competes with Flash?

Narayen says they make money from selling the tools for helping to reduce the complexity to the user for producing content, so its inherent business model can remain the same.

9:34 am: Narayen gives an example of this new reality. Wired magazine is using its digital publishing suite. The suite allows them to create an app for Android, iOS and other platforms.

Walt asks, it’s that simple? The argument is over? No more nasty calls between Adobe and Apple?

Narayen says, yep, he’s excited about the future. It’s an argument that the press likes to continue bringing up.

9:40 am: Walt and Narayen advance the conversation to Adobe’s Omniture unit, which measures activity on the Web.

Walt wants to know why every single provider is all over the map, and there are no standards or consistency on measurement from all the various providers, like Nielsen.

Narayen says they measure every single click.

Walt interjects that those numbers are completely different than what Nielsen says. He knows this because of his relationship with AllThingsD.com.

Narayen says he’s very hopeful that there will be standards soon. It’s crucial if we want advertising dollars to continue shifting online from other media.

9:43 am: Walt wants Narayen’s opinion on the revolution of tablets. Are they consumption or production devices?

Narayen says he thinks they are real. “I think tomorrow they will be equally productive devices. We’ll provide all of our creative tools on these devices. You’ve already seen us provide Photoshop on tablets.”

“Our creative community will share images on these devices. You can do a touch-up on a tablet, and it syncs up with your computer.”

9:46 am: Walt asks about moving Creative Suite, which includes Photoshop, Dreamweaver and Illustrator, to the iPad.

Narayen says you can mix colors with a tactile feeling on the iPad and then move that back over to the computer.

For more on how Photoshop interacts with the iPad, check out this AllThingsD story from earlier this year.

Walt wants to know about non-iPad tablets. Is there an opportunity there?

Narayen is bullish: “There will be another 20 tablets that will come by the end of the year that will push the industry in different directions–video production and tablets with a stylus. I think the community is vibrant. I’m really excited.”

In particular, he names Android as the rising star: “What you saw with smartphones hitting an inflection point with Android, you’ll see it again with tablets.”

Also, he sees both HP and RIM gaining traction in the enterprise.

“The real platform war is the Internet. I think it’s so early in the evolution. I think Facebook has an opportunity to ask ‘what does a Facebook app look like on the tablet?’ I think there’s still a huge opportunity to connect to people on these devices.”

9:51 am: Time for questions from the audience.

A question about the cloud.

Narayen said that you’ll see Adobe using the cloud to deliver tools as cloud offerings, but also leveraging it to enable collaboration among several users.

Next question is about creating tools for companies, like Zynga, which creates games for social networks, like Facebook.

Narayen says there are companies that build entire sites and enterprise applications in Flash. He says that they have to build their tools to the highest standards to support them.

Flash has multiple components, Narayen said. It has video and gaming on a variety of devices.

Walt wants to know why things don’t work sometimes.

Narayen offers to sit down with Walt some time, so he can see exactly what he’s referring to because he doesn’t know.

9:57 am: An audience member asks about privacy and Flash cookies. (No, this isn’t when cookies are sold really quickly until the inventory runs out.)

Narayen is doing a lot of work on this front to make sure it’s clear to consumers. In particular, they are working with browser vendors to be synced up on opting in and out, so there’s consistency in the browser and plug-ins.

That’s it folks. Thanks for reading. Next up, another demo and then we have AT&T’s Ralph de la Vega.

Chief Financial Officer Mark Garrett said the company reduced its revenue expectation for the second quarter by $50 million–or roughly one third of the original expectation for Japan–due to an uncertain business environment after the nation was rocked by an earthquake and tsunami.

The revenue hit is amplified, said Chief Executive Shantanu Narayen, because Japanese companies typically close sales in March, which is the end of the fiscal year for many of them. However, he said, the tragedy hasn’t changed Adobe’s optimism about the market and its long-term growth prospects.

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“You know, we value our independence, and we continue to think that we just have tremendous opportunities ahead of us as a company,” Narayen said in an interview with Fox Business Network today. “The macro trends that are driving our business, creating content, monetizing it, managing it, and delivering that value to our customers, that is what we’re focused on as a company. We have tremendous strategic partnerships not just with Microsoft. We have partnerships with Google and with Apple, as well as with all media companies who use our creative tools to produce content….

“We partner with Microsoft and the partnership with Microsoft is all about making sure that our creative applications, which are the best-selling creative applications in the world, work really well on the Windows platform. So, that is the nature of the partnership with Microsoft.”

Investment bankers and stock markets can calm down–Microsoft and Adobe are not in talks about an acquisition.

Spurred by a story in the New York Times that Microsoft was eyeing the software company for purchase, Adobe (ADBE) stock went wild today, up 11.5 percent to $28.69.

Except, according to numerous sources at both companies with whom I talked today, it’s “nonsense.”

Sure, it might be an interesting idea–kind of like AOL (AOL) and Yahoo (YHOO) merging–but that’s not the case at this point either.

Chalk this one up to blabby bankers and stock speculators–this might be a good rumor for regulators to look into.

Of course, as is typical, the execs at both companies talk a lot–you might have noticed that Adobe has a lot of software that is popular on the Windows operating system.

So, they had a meeting!

But it is kind of hard to do an acquisition when “Steven A. Ballmer, Microsoft’s chief executive, recently showed up with a small entourage of deputies at Adobe’s offices to hold a secret meeting with Adobe’s chief executive, Shantanu Narayen.”

Memo to the Times: When there is an acquisition afoot–in my experience–it’s all private airplanes and law offices and not a company HQ visit by the very loud and very noticeable Ballmer, the exact polar opposite of a shrinking violet.

In any case, it is not a big surprise at this point if longtime rivals like Adobe and Microsoft (MSFT)–which makes a competing video technology called Silverlight to Adobe’s Flash–talk about trying to stop the explosive growth of Apple, especially in the mobile space.

Microsoft is about to launch its Windows Phone 7, after many cloddish efforts in the arena have failed, and Adobe has been subject to a withering attack from Apple (AAPL) and its CEO Steve Jobs.

Jobs, in no uncertain terms, has dissed Flash relentlessly as a technology.

Others have not, such as Google (GOOG), which recently showed strong support for Adobe’s Flash in its recent launch of Google TV.

In fact, it is Google that is more mentioned in Silicon Valley as the logical acquirer of Adobe, if there were to be a sale.

Along with all its various assets, such as the Photoshop and Acrobat software that dominates online publishing, Adobe’s Omniture unit is one of the more powerful and popular analytics companies on the Web, which is right in Google’s wheelhouse.

Personally, that’s the one I would bet on, although that’s entirely me speaking.

Until that happens, here is a video interview of Jobs smacking around Adobe and Flash at the eighth D: All Things Digital conference in June:

Please see this disclosure related to me and Google.

]]> http://allthingsd.com/20101007/adobsoft-nonsense-on-the-microsoft-adobe-rumor-in-any-case-itd-more-likely-be-goodobe/feed/ 13 http://allthingsd.com/20101007/report-microsoft-adobe-hold-secret-summit-on-apple-and-mobile/ http://allthingsd.com/20101007/report-microsoft-adobe-hold-secret-summit-on-apple-and-mobile/#comments Thu, 07 Oct 2010 21:05:56 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=50373 So Microsoft CEO Steve Ballmer dropped by Adobe recently for a secret meeting with Adobe chief Shantanu Narayen, the New York Times reports. It lasted about an hour and covered a number of topics, among them how to better compete against Apple in the smartphone market and a possible acquisition of Adobe by Microsoft.

Given the meeting’s length, it’s hard to imagine the buyout talk extended much beyond a casual mention of the idea, though the two companies have held more in-depth discussions on the matter in the past. It’s far more plausible this was largely an “enemy of my enemy is my friend” chat, with Apple (AAPL) in the villain’s role, with some peripheral jawing about getting Flash running on Windows Phone 7.

But who knows, right? By purchasing Adobe (ADBE), Microsoft would gain a lot of IP and recent Adobe acquisition Omniture, whose Web traffic measurement software is that industry’s standard. And with nearly $37 billion in cash and short-term equivalents, Microsoft (MSFT) is certainly capable of writing the $15.5 billion check it would likely take to acquire the company.

]]> http://allthingsd.com/20101007/report-microsoft-adobe-hold-secret-summit-on-apple-and-mobile/feed/ 0 http://allthingsd.com/20100923/adobe-ios/ http://allthingsd.com/20100923/adobe-ios/#comments Thu, 23 Sep 2010 10:07:09 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=49134 The recent loosening of Apple’s developer rules, particularly the company’s decision to remove a prohibition against “intermediary translation or compatibility layers” in iOS apps, hasn’t done much for Adobe.

Though the company renewed support for its Packager for iPhone–a tool that allowed programmers to recompile applications written in Flash in Apple’s mobile OS–almost immediately after Apple (AAPL) lifted its restriction on it, Adobe (ADBE) hasn’t seen quite the sort of pickup you’d expect following the relaxation of what it once decried as Apple’s “tyrannical control” over developers.

Consider this exchange between Adobe CEO Shantanu Narayen and Piper Jaffray analyst Michael Olson during the company’s earnings call earlier this week.

Olsen: Just one quick one regarding the Apple stuff allowing apps developed with Adobe tools to be used on their devices. Other than being a good headline that kind of helps dissipate some of the clouds that are on that issue, do you believe it actually changes the demand for Adobe Creative products?

Narayen: What we did see was that the day Apple announced the removal of the licensing restrictions that a number of people who had created products using our tool submitted that to the Apple Store and were approved. I think it just continues to reflect the opportunity which we have with our tools, which is to help designers and developers continue to develop their applications and content in our tools and repurpose it to multiple different output media. In the short run, I would say the impact was muted.

A “muted” impact. Too bad for Adobe that the same can’t be said of the impact of the company’s latest earnings on its share price….

Anyway, that the relaxation of Apple’s developer rules hasn’t had much of an effect on demand for Adobe software is hardly surprising. Any developer that’s serious about writing apps for Apple’s mobile devices is likely going to use its iOS SDK because it results in better apps. As one prominent dev recently told me:

Flash is one way to write cross platform apps, but in my professional opinion–Flash typically does not result in high quality applications on the desktop and mobile. Ignoring performance issues…text rendering in flash typically doesn’t look native, controls never look or behave exactly right, and integration with native system-wide functionality is often missing (spell check, bouncing tableviews, native view selection styles). This results in sub-par applications. Apps that are written specifically for cross platform tend to not take advantage of native features unique to each device.”

]]> http://allthingsd.com/20100923/adobe-ios/feed/ 0 http://allthingsd.com/20100615/verizon-to-debut-next-gen-droid-on-eve-of-iphone-4-launch/ http://allthingsd.com/20100615/verizon-to-debut-next-gen-droid-on-eve-of-iphone-4-launch/#comments Tue, 15 Jun 2010 21:34:06 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=42724

What an astonishing coincidence.

Motorola and Verizon Wireless have set a date for the debut of their next-generation Droid device: Wednesday, June 23, one day prior to the street date for release of Apple’s iPhone 4. Presiding over the launch: Verizon Wireless marketing chief John Stratton, Google (GOOG) VP of engineering Andy Rubin, Motorola co-CEO Sanjay Jha, and–more interestingly–Adobe (ADBE) CEO Shantanu “Thoughts on Flash” Narayen (see invitation above; click to enlarge).

A bold move. But a potentially foolish one as well. If this year’s iPhone launch week is anything like those of years past, Apple (AAPL) will be sucking so much air out of the news cycle there may be little left for Verizon (VZ) and Motorola (MOT), even if this latest Droid is as promising as it sounds.

]]> http://allthingsd.com/20100615/verizon-to-debut-next-gen-droid-on-eve-of-iphone-4-launch/feed/ 0 http://allthingsd.com/20100609/twelve-tech-ceos-descend-on-the-capitol/ http://allthingsd.com/20100609/twelve-tech-ceos-descend-on-the-capitol/#comments Wed, 09 Jun 2010 12:00:36 +0000 Ben Worthen http://voices.allthingsd.com/?p=25818 Microsoft’s (MSFT) Steve Ballmer and Adobe’s (ADBE) Shantanu Narayen are among a dozen technology-industry chief executives who will spend the next 24 hours in Washington lobbying government officials there on issues including intellectual-property protection and data protection laws.

The trip is an annual one arranged by the Business Software Alliance, an industry group based in Washington D.C., and the twelve leaders is the most that have ever attended, says Robert Holleyman, the organization’s president. This year, the CEOs will meet with members of President Obama’s cabinet and several members of Congress.

This year, the top issue on the CEOs’ agenda is a familiar one: software piracy in China. Mr. Holleyman says that 79 percent of all software used in the country is illegally copied, and that this costs U.S. software makers $7.6 billion annually. With the number of PCs sold in China skyrocketing, “the piracy rate means that the losses are growing astronomically,” he says.

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]]> http://allthingsd.com/20100609/twelve-tech-ceos-descend-on-the-capitol/feed/ 0 http://allthingsd.com/20100430/adobe-and-apple-ceos-square-off/ http://allthingsd.com/20100430/adobe-and-apple-ceos-square-off/#comments Fri, 30 Apr 2010 19:50:49 +0000 Alan Murray http://voices.allthingsd.com/?p=24567 Yesterday, Adobe (ADBE) CEO Shantanu Narayen sat down with Alan Murray of The Wall Street Journal and fired back at Apple’s (AAPL) Steve Jobs in the latest round of the increasingly vocal Flash fight between the two companies. The video’s embedded below.

]]> http://allthingsd.com/20100430/adobe-and-apple-ceos-square-off/feed/ 0 http://allthingsd.com/20100429/live-blogging-the-journals-interview-with-adobe-ceo/ http://allthingsd.com/20100429/live-blogging-the-journals-interview-with-adobe-ceo/#comments Thu, 29 Apr 2010 18:59:56 +0000 Jennifer Valentino-DeVries http://voices.allthingsd.com/?p=24517 Earlier on Thursday, Apple CEO Steve Jobs published an essay in which he took Adobe to task over its Flash software, which Apple does not support on its mobile products, such as the iPhone and iPad. Below, Adobe CEO Shantanu Narayen discusses the essay in an interview with The Wall Street Journal’s Allan Murray

• Mr. Murray likens the Apple-Adobe fight to that between reality TV stars Jon and Kate Gosselin and asks about the history between the two companies. Mr. Narayan says that Adobe has been “true to the position” with which it was founded and to the idea that it should help people deal with multiple operating systems.
• Mr. Narayan talks about Adobe “certainly” shipping on Android’s latest version. He says that it is an “incredibly productive time” for Adobe and discusses Creative Suite 5, saying that Adobe’s “innovation is blowing people away.”
• The technology problems that Mr. Jobs mentions in his essay are “really a smokescreen,” Mr. Narayan says. He says more than 100 applications that used Adobe’s software were accepted in the App Store. “When you resort to licensing language” to restrict this sort of development, he says, it has “nothing to do with technology.”
• He says that Apple’s restrictiveness is just going to make it “cumbersome” for developers who are trying to make products that work on many devices. They’re going to have to have “two workflows” … one for Apple devices and one for others.
• Speaking about Mr. Jobs’s assertion that Adobe is the No. 1 cause of Mac crashes, Mr. Narayan says if Adobe crashes Apple, that actually has something “to do with the Apple operating system.”

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]]> http://allthingsd.com/20100429/live-blogging-the-journals-interview-with-adobe-ceo/feed/ 0 http://allthingsd.com/20081203/adobe-announces-q4-morale-reduction/ http://allthingsd.com/20081203/adobe-announces-q4-morale-reduction/#comments Wed, 03 Dec 2008 22:56:09 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=9094
Well, no wonder Adobe won’t have an exhibition booth at Macworld Conference & Expo 2009–the company’s sacking employees who might have otherwise staffed it….

Citing the standard litany of economic tribulations, Adobe (ADBE) Wednesday reduced its fourth-quarter outlook and said it will cut 600 jobs around the world–about eight percent of its workforce. The company now expects revenue of $912 million to $915 million. In better times, that revenue target range had been $925 million to $955 million. “The global economic crisis significantly impacted our revenue during the fourth quarter,” said CEO Shantanu Narayen. “We have taken action to reduce our operating costs and fine-tune the focus of our resources on key strategic priorities.”

Adobe shares slipped nine percent to $20.50 in after-hours trading.

]]> http://allthingsd.com/20081203/adobe-announces-q4-morale-reduction/feed/ 3 http://allthingsd.com/20071113/chizen/ http://allthingsd.com/20071113/chizen/#comments Tue, 13 Nov 2007 14:44:26 +0000 John Paczkowski http://digitaldaily.allthingsd.com/20071113/chizen/ If Adobe Chief Executive Officer Bruce Chizen planned to quit while he was ahead, he couldn’t have picked a better time. When Chizen steps down as CEO at the end of this month, to be succeeded Dec. 1 by Adobe COO Shantanu Narayen, he will depart a company that’s flourishing financially. Adobe posted better-than-expected third quarter results in September and expects to post fourth-quarter revenue “near the high end” of its target range.

So why resign?

“As any CEO will attest, the job of chief executive is all-consuming,” Chizen said during a call with analysts. “Quite simply, I’m at a point in my life where I would like to take a step back and think about what I would like to do in the next stage of my life. As much as I love Adobe products and employees, I didn’t want to find myself at 55 saying, ‘Gee, I wish I had done something else besides Adobe.’ ” What will he do next? “It could be that I do nothing, travel, sit on boards, run another company, invest in another company. I don’t know–nor would I ever know if I didn’t decide to take a break.”

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