Adobe
Adobe Inc., formerly Adobe Systems Incorporated, is an American multinational computer software company based in San Jose, California. It produces software for web design, photo manipulation, vector illustration, video and audio editing, mobile application development, print layout and animation.
| Adobe Inc. | |
|---|---|
| Type | Public |
| Traded as | Nasdaq: ADBE |
| Industry | Computer software |
| Founded | December 1982, Los Altos, California |
| Founder | John Warnock, Charles Geschke |
| Headquarters | San Jose, California, United States |
| Area served | Worldwide |
| Key people | Shantanu Narayen (chairman, president and CEO) |
| Products | Photoshop, Illustrator, Acrobat, InDesign, Premiere Pro, After Effects |
| Services | Adobe Creative Cloud, Adobe Experience Cloud, Adobe Document Cloud |
| Employees | More than 26,000 (2022) |
| Website | adobe.com |
Adobe has historically specialised in software for the creation and publication of graphics, photography, illustration, animation, video, film and print. Its flagship products include Photoshop, Illustrator, Acrobat and the Portable Document Format. Its bundled Creative Suite evolved into the subscription-based Creative Cloud, and the company expanded into digital marketing software, becoming by 2021 one of the leading providers of customer experience management.
The company has been the dominant supplier of design and creative software for four decades. It has also attracted sustained criticism, particularly over the move to subscription-only pricing and over early termination fees, the latter producing a joint civil action by the Federal Trade Commission and the Department of Justice in 2024.
History
PostScript, 1982 to 2000
Adobe was founded in December 1982 by John Warnock and Charles Geschke, who left Xerox PARC to develop and sell the PostScript page description language. The company began in Warnock's garage and took its name from Adobe Creek in Los Altos, California, the stream that ran behind his house. The corporate logo, a stylised A, was designed by the graphic designer Marva Warnock, John Warnock's wife.
Steve Jobs attempted to buy the company for five million dollars in 1982. Warnock and Geschke refused, but under pressure from their investors agreed to sell him shares amounting to 19 per cent. Jobs paid five times the company's valuation at the time plus a five-year PostScript licence fee in advance, a transaction that made Adobe the first company in the history of Silicon Valley to become profitable in its first year.
PostScript was the first international standard for computer printing, incorporating algorithms describing the letterforms of many languages; kanji printer products were added in 1988. Warnock and Geschke strengthened its credibility by licensing the Helvetica and Times Roman typefaces from Linotype after failing to reach agreement with Compugraphic. By 1987 PostScript had become the industry standard printer language, with more than 400 third-party programs and licensing agreements with 19 printer manufacturers.
In 1985 Apple licensed PostScript for its LaserWriter printers. The combination of the Macintosh, the LaserWriter and PageMaker created desktop publishing as an industry and established the market Adobe has served ever since.
Adobe's first products after PostScript were digital fonts in a proprietary format called Type 1, developed by Bill Paxton after he left Stanford. Apple subsequently developed the competing TrueType standard, which offered full scalability and precise control of the pixel pattern produced by a font's outlines, and licensed it to Microsoft.
Creative software, 1986 to 1996
From the mid-1980s Adobe entered the consumer software market with Illustrator, a vector drawing program for the Macintosh that grew out of the firm's in-house font development software and helped popularise PostScript laser printers. The company joined the Nasdaq Composite index in August 1986.
By the mid-1990s Adobe had acquired Photoshop from John and Thomas Knoll, FrameMaker from Frame Technology Corporation, and After Effects and PageMaker from Aldus, and had developed Premiere in-house, first released in 1991. The Aldus acquisition also gave Adobe control of the TIFF image file format.
PDF, 1993 to 1999
In 1993 Adobe introduced the Portable Document Format together with its Acrobat and Reader software. Warnock developed PDF under the code name The Camelot Project, using PostScript technology to create a widely available digital document format capable of displaying text, raster graphics, vector graphics and fonts.
Adobe kept PDF proprietary from its introduction until 2008, when it became an ISO international standard as ISO 32000-1:2008, although the format was free for viewers from the outset. The decision to give away the reader while charging for the authoring tools established a pattern widely imitated in software distribution.
Creative Suite and Macromedia, 2000 to 2009
Adobe acquired the Canadian company Accelio, also known as JetForm, in 2002. In May 2003 it purchased the audio editing and multitrack recording software Cool Edit Pro from Syntrillium Software for 16.5 million dollars together with a large loop library, renaming the product Adobe Audition.
Also in 2003 the company introduced the first Adobe Creative Suite, bundling its creative software in a single package comprising InDesign, the successor to PageMaker, together with Illustrator, Photoshop, ImageReady and InCopy. The 2005 second edition added an updated Acrobat, Premiere Pro, GoLive, the file manager Bridge and Dreamweaver.
Dreamweaver came from the 3.4 billion dollar acquisition of Macromedia, completed as a stock swap, which also added ColdFusion, Contribute, Captivate, Breeze (rebranded Adobe Connect), Director, Fireworks, Flash, Flash Professional, FlashPaper, Flex, FreeHand, HomeSite, JRun, Presenter and Authorware. The purchase removed Adobe's principal competitor in creative software and gave it near-complete coverage of the professional design market.
Adobe released Adobe Media Player in April 2008 and on 27 April discontinued GoLive in favour of Dreamweaver. On 1 June it launched Acrobat.com, a set of web applications for collaborative work. Creative Suite 4 appeared in October 2008 in six configurations priced from approximately 1,700 to 2,500 dollars.
On 3 December 2008 Adobe laid off 600 employees, eight per cent of its worldwide staff, citing the weak economy. On 15 September 2009 it announced the acquisition of the web analytics and online marketing company Omniture for 1.8 billion dollars, completed on 23 October, whose products were integrated into the Adobe Marketing Cloud. A further 680 employees were laid off in November 2009.
Flash, security breach and litigation, 2010 to 2014
Adobe's 2010 was dominated by a public dispute with Apple over the latter's refusal to support Flash on the iPhone and iPad. Jobs argued that Flash was neither reliable nor secure enough, publishing an open letter titled Thoughts on Flash in April 2010 setting out his position and the case for HTML5. Adobe executives argued that Apple wished to maintain control over the iOS platform. Apple's position prevailed: in November 2011 Adobe announced that it would cease development of Flash for mobile devices after version 11.1 and focus on HTML5.
The company continued acquiring. It bought Day Software in July 2010, DemDex in January 2011 for audience optimisation, Nitobi Software in October 2011, maker of the PhoneGap mobile development framework whose source code was subsequently submitted to the Apache Foundation as Apache Cordova, and Efficient Frontier in December 2011. A 280,000 square foot campus opened in Lehi, Utah in December 2012.
In 2013 Adobe suffered a major security breach in which large portions of its software source code were stolen and posted online and records of more than 150 million customers were made available for download. A separate 2012 breach compromised approximately 40 million sets of payment card details.
A class action alleging suppression of employee compensation was filed against Adobe and three other Silicon Valley companies in a California federal court in 2013. In May 2014 Adobe, Apple, Google and Intel agreed to pay 324.5 million dollars to settle claims brought on behalf of 64,000 employees, in a case concerning mutual agreements not to recruit each other's staff.
Creative Cloud, from 2011
In 2011 Adobe introduced Creative Cloud, a subscription plan initially at 600 dollars a year, in place of a perpetual licence that could exceed 2,000 dollars for creative professionals. The launch coincided with criticism of the pricing of Creative Suite 5 and of Adobe's refusal to extend a Creative Suite 6 discount to users who had not bought CS5.
Initial reception among technology journalists was favourable, but a later CNET survey found that more users viewed subscription creative software negatively than positively. Pricing began at 75 dollars a month for the full suite, discounted to 50 dollars for an annual commitment and 30 dollars for former Creative Suite users.
In May 2013 Adobe announced that CS6 would be the last version sold under perpetual licence and that a Creative Cloud subscription would be the only route to new versions of Photoshop, Illustrator and its other creative applications. Reception was largely negative, despite the company attracting 500,000 subscribers in the first year. The change did not reduce piracy: cracked copies of Photoshop CC 2013 appeared on The Pirate Bay within a day of release.
The transition nonetheless succeeded commercially, converting lumpy upgrade revenue into predictable recurring income and substantially increasing the company's valuation.
Recent years
In March 2018 Adobe and Nvidia announced an expansion of their decade-long collaboration to optimise the Adobe Sensei artificial intelligence framework for Nvidia graphics processors, supporting features including automatic lip-sync in Character Animator and face-aware editing in Photoshop.
In September 2022 Adobe agreed to acquire the collaborative design platform Figma for approximately 20 billion dollars. The transaction faced opposition from the United Kingdom Competition and Markets Authority and the European Commission, both of which raised concerns that it would remove Adobe's closest competitor in interface design software. The companies abandoned the deal in December 2023, and Adobe paid a one billion dollar termination fee.
Adobe has since concentrated on generative artificial intelligence, principally through the Firefly models, which it has marketed as trained on licensed and public domain material rather than indiscriminately scraped imagery.
Operations
Adobe employed more than 26,000 people worldwide as of 2022. In addition to San Jose it maintains major development operations in the United States at Newton, New York City, Arden Hills, Lehi, Seattle, Austin and San Francisco, and in India at Noida and Bangalore.
Controversies
Subscription pricing
The 2013 decision to make Creative Cloud the only route to current versions of Adobe's creative software remains the most persistent criticism of the company. Opponents argue that customers who once owned a working copy of their tools indefinitely now lose access on ceasing payment, that this is a particular problem for archival access to past work, and that the absence of meaningful competition in professional design software allowed Adobe to impose terms that a competitive market would not have borne. Adobe's position is that subscription funds continuous development and that total cost of ownership for most professional users fell.
Early termination fees and the 2024 lawsuit
In June 2024 the Federal Trade Commission and the Department of Justice filed a civil action against Adobe and two executives, alleging that the company enrolled consumers in its most heavily promoted annual plan without adequately disclosing that cancellation after the first 14 days incurred an early termination fee of up to 50 per cent of the remaining obligation, and that it made cancellation unduly difficult. Adobe stated that it was transparent about its terms and would contest the claims.
Terms of service and artificial intelligence training
In June 2024 a revision of Adobe's terms of service prompted a substantial backlash from professional users, who read the wording as granting the company broad rights over content created or stored using its software, including for training artificial intelligence models. Adobe issued clarifications stating that it did not train generative models on customer content stored locally or in Creative Cloud, and subsequently rewrote the terms. The episode reflected wider unease among creative professionals about the use of their work as training data.
Security breaches
The 2013 breach, in which source code and the records of more than 150 million customers were taken, was among the largest disclosed at the time. Analysis of the leaked password data was widely cited as evidence of poor cryptographic practice, the passwords having been encrypted in a reversible mode rather than properly hashed, with password hints stored in plain text alongside them.
Flash security
Adobe Flash Player became one of the most frequently exploited pieces of consumer software, with a long record of serious vulnerabilities used in malware campaigns. The product reached end of life on 31 December 2020, and Adobe blocked Flash content from running thereafter. The extended decline of Flash is commonly cited both as a security case study and as an example of a proprietary web platform displaced by open standards.
Anti-poaching agreements
The 2013 class action concerned mutual agreements between Adobe, Apple, Google and Intel not to recruit each other's employees, which plaintiffs argued had suppressed wages across Silicon Valley. The 324.5 million dollar settlement followed an earlier proposed figure that the presiding judge had rejected as too low.
See also
References