Web 2.0 Summit: Adobe Thrives By Bucking The TrendWeb 2.0 Summit: Adobe Thrives By Bucking The Trend

According to the common Web 2.0 wisdom, Adobe ought to be in big trouble, said Tim O'Reilly, content chairman of the Web 2.0 Summit.

The whole idea of Web 2.0, he said, is everything should be free and ad-supported. Companies like Adobe should be dinosaurs. Yet Adobe is thriving. How is that possible? O'Reilly asked Adobe CEO Bruce Chizen.

"I don't think people realize how successful Adobe is," O'Reilly said, during a Q&A with Chizen at the Web 2.0 Summit. Revenue growth was 41% year-over-year, stock is at an all-time high. "Clearly, Web 2.0 has not been hurting you."

Chizen responded, "If you think about Web 2.0, you think about rich applications." Designing great applications requires perfect graphics, great images, interesting animations, and video. Even enterprise applications need to be engaging. "We are the enabler of a lot of that," he said. "There isn't an image on any Web site that hasn't been touched by Photoshop." Most enterprise workflows use PDF, Flex and Flash to display and render. More than 300 million non-PC devices have Flash, including the Sony PlayStation and Nintendo Wii.

O'Reilly added that YouTube and Flicker are Flash-based.

Thanks to YouTube and other places, Flash is the way to share video, Chizen said.

"More than that, people want quality. Mediocrity is not good enough. And if you want more than mediocrity, Adobe products are the way to go," Chizen said. Photoshop is $700 -- but people use it.

Chizen described some new applications and technologies Adobe is developing designed to take advantage of the Internet.

Chizen said Adobe plans to add support for VoIP to the Flash player, to make it evolve into a universal communications client.

Chizen described new technology, Adobe Integrated Runtime (AIR), designed to go beyond Flash by allowing developers to build applications that can either run in a browser while connected to the Internet, or run on the desktop as an application.

For example, Adobe developed a word processor, Buzzword, using AIR, that works online or as a desktop word processor, Chizen said.

AIR incorporates the best of Flash, with core attributes of Adobe Reader, creating a runtime that's lightweight, can integrate HTML, and render PDFs in the same applications, Chizen said. Developers can create Web applications without the design limitations of the browser, and can take advantage of local resources of the desktop computer, such as storage and peripherals.

Over time, Chizen said, Adobe will move from licensing desktop software hosted applications, which will be either subscription or advertising based.

For example, Adobe developed Premiere Express, a Web application for video editing, used by Photobucket and YouTube. MTV.com lets users remix professional music videos using Premiere Express. And Adobe is working on Photoshop Express, a hosted application for image editing.

But hosted applications have a disadvantage: Adobe's hosted apps require a lot of computing power, and desktop applications can take advantage of the power of the desktop.

Chizen took a dig at Microsoft. O'Reilly noted that Microsoft has Adobe in its sights, with Silverlight. But Chizen said that Silverlight is a Flash imitation. He said 99% of PCs have Flash, and 300 million non-PC devices. On the other hand, Silverlight has less than 3% total market share.

Even Microsoft doesn't use Silverlight, Chizen said. The Halo 3 promotional site uses Flash video, as does MSN Video.