Adobe Embraces the Cloud – Hazy Days Ahead for Microsoft?

June 3, 2008 Appirio
Narinder Singh
Yesterday Adobe announced – a new set of collaborative apps available online that allow users to create and share documents and PDFs, host web meetings and much more. The announcement received significant attention from the press and bloggers, and highlights the degree to which Microsoft’s office monopoly is being attacked. A number of excellent articles discuss what’s available in, but we’d like to focus on a couple related questions that CIOs may have in this area. 
Microsoft may be lagging on collaboration features, but won’t they eventually get there?  Shouldn’t I just wait?  
We have, in this blog, often highlighted the fundamental challenges facing on-premise vendors attempting to create Internet-based SaaS solutions.  They face two basic constraints.  First is the pricing model.  It’s hard to put out an offering that competes with existing products and costs only a fraction of what you’re currently charging.  Google Apps are free (for enterprise domain support, users pay $50/seat/year). is also free in limited use.  Microsoft can’t simply lower its prices this dramatically without throwing its investors into a tizzy.  Even if Microsoft could provide its on-premise Windows + Office licenses at this price point, the overall solution – including hardware, other applications and labor – would still cost companies many times what an Internet-based solution does.  
This seriously limits Microsoft’s options, and leads to the second major constraint: On-premise solutions are physically and emotionally closed systems.  This is a subject I discussed during a media roundtable last week at the Google I/O developer conference. 
Microsoft products have been architected for over 20 years around the notion of a single user working on a document.  This makes them incompatible with the shared multi-tenant approach of,  Google, and others.  When the Internet boom arrived, Microsoft was slow to get it, they just added a few basic capabilities to allow documents to be sent back and forth between individual silos (even the original version of Bill Gates’s 1995 book “The Road Ahead” barely even mentioned the web ).  The later introduction of Sharepoint was a way to work around the constraints of this approach, but it’s a far cry from Internet-style collaboration.   On the Internet, everything starts with sharing, working together, and exchanging information. Google Apps, and now, revolve around those principles. Adobe didn’t simply add a “share” button to its on-premise applications and declare victory.
Using Office to improve how people work together in your organization is like asking an emotionally closed person to facilitate a session on open communication. Microsoft would have to basically become a different person (or undergo a lifetime of therapy) to drive new improvements to collaboration in an enterprise. 
Google Apps and sound like similar concepts.  Do I need to wait for one to win or can I use both together? 
win or can I use both together?
While Adobe and Google Apps have some overlap (e.g. document support), most of their capabilities are distinct (Google Mail and Calendar, Adobe Connect Now for web meetings) and generally complementary.  Even if they had substantially more overlap, we believe choice is ultimately good for the customer.  It helps prevents Microsoft-style monopoly pricing and gives customers more options to meet varying business needs.  
Overlap does not mean they are mutually exclusive either.  Cloud-based products are inherently more open and allow for deeper connections between solutions.  For example, Appirio Contact Sync for Salesforce and Google Apps was built on two cloud solutions – Google and – keeping contacts in both applications updated and in sync.  This gives customers more flexibility in where they store contacts without needing to enter duplicate data.  Companies like Appirio, are helping customers to get more benefit out of one platform, say Google or Adobe, while allowing seamless interaction with other SaaS solutions. 
In the web world, customers shouldn’t have to decide the equivalent of the Beta vs. VHS standard wars (or for those more current Blueray vs. HD-DVD).  Because of the open nature of “the cloud”, solutions can be more easily integrated.  This means vendors no longer have to figure out every future permutation to maintain an integrated solution.  Those who try to  will never move quickly enough to keep up with what customers need.  Instead vendors can focus on the core qualities of their SaaS applications, such as their primary functional value, open APIs, multi-tenancy, open business practices, and how they maintain the highest rate of innovation.  This preserves future options and allows vendors (and their customers) to benefit from the innovations of the larger ecosystem. 
Adobe, with its launch of, may one day represent a case study on how a large on-premise business can transform itself.  By using their core assets and applying them to a new market, Adobe has the opportunity to fully embrace the future of cloud computing.  If they remain true to this vision, they will provide customers with more reputable choices in the cloud, and will further relegate the old guard of on-premise software to playing catch up.
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