Adobe Inc.

Date Founded: 1982

Industry:Software

Corporate Headquarters: San Jose, California

Type: Public

Headquartered in San Jose, California, Adobe Systems is a technology firm that specializes in software tools for digital media creation and digital marketing. It is far from the largest technology company, trailing such giants as Apple and Microsoft in sales and other business metrics. Nevertheless, through products such as PhotoShop, Illustrator, and Acrobat Reader, the latter of which facilitates a consistent display of documents across many different technology platforms, Adobe has established itself as a major player in the market. Its products are used by computer users around the world.

Adobe was founded in 1982 by John Warnock and Charles Geschke, who both worked at PARC, Xerox’s Palo Alto Research Center. Together they developed a computer language that could faithfully transfer a document stored on a computer to a printed page. Frustrated by Xerox’s inability to bring the product quickly to market, they left the company to form Adobe, named after a creek near Geschke’s home.

A strategic partnership with Apple enabled the two men to develop a refined and more robust version of their computer language, which they named PostScript. Adobe then joined Apple and Aldus to effectively launch the desktop publishing industry. The company also pioneered the development of digital fonts and developed products tailored to publishers, graphic designers and artists, advertisers, web designers, and other creative workers. Serving as co-chairs of a global company during the early years of the twenty-first century, founders Warnock and Geschke faced new challenges in competing in several areas—especially cloud computing and digital advertising and marketing, including marketing analytics.

History

At PARC, Geschke and Warnock developed Interpress, software that enabled computers both to communicate with printers and to produce consistently formatted output. When company executives said that Xerox would need seven years to bring the product to market, the pair got backing from a venture capitalist and founded Adobe.

In 1983 the two men signed an agreement with Apple to supply the software for the Apple LaserWriter, a printer then in development. Soon after, those two firms teamed with Aldus, publisher of the PageMaker layout software, and the desktop publishing industry was born. Adobe licensed PostScript to other computer and printer companies, which helped entrench the language and ensure its eventual status as a standard. Later versions of PostScript provided enhanced ability to manage color, graphics, and illustrations.

In 1986 Adobe introduced Type 1 typefaces. These typefaces could be scaled to print with fidelity on printers with different resolutions, which enhanced Adobe’s position in the publishing and graphic arts industries. That same year, Adobe went public. The following year, Adobe released Illustrator, a program for creating complex computer-generated art. By 1990 Adobe had surpassed $300 million in sales and had more than 1,300 employees.

It also faced a challenge when Apple and Microsoft collaborated to develop a competing type-creation system called True Type. While Adobe survived, True Type—and its later iteration, Open Type—prevailed, and Adobe had to convert its font library to that standard.

Nevertheless, the company continued to grow. Adobe began selling the innovative digital image editing program PhotoShop in 1990, and three years later, it issued its first edition of Acrobat, a document display program that used the new Portable Document Format (PDF) file format. Over time, the PDF format became a standard. Acrobat was originally sold, but starting in 1994, Adobe provided it for free. In 2003 the company released several versions of the software, including a premium version with enhanced features for editing and annotating PDF files.

In the mid-1990s, Adobe grew by expansion, absorbing Aldus and then buying Frame Technology, publisher of software useful for creating and publishing long and complex documents. In 1999 Adobe published InDesign, a professional design and page layout program that supplanted PageMaker. The introduction of InDesign was followed the next year by the rollout of InCopy, a related program with editing tools.

Late in the 1990s, Adobe faced a crisis when sales plummeted. The company cut back on staff and restructured, rebounding with vigor. In 1999 it purchased GoLive, a web-design program that expanded its business into a new area.

In 2000 and 2001, Geschke and Warnock retired from operations, although they remained co-chairs. New CEO Bruce Chizen oversaw the effort to move the company to business-wide solutions. In 2003 Adobe released Creative Suite, which included more integrated versions of the Adobe product line.

Two years later, Adobe purchased Macromedia, giving it control of Flash, a web-based animation program, and Dreamweaver, web development software that eventually replaced GoLive.

Chizen stepped down in 2008 and was replaced by then-COO Shantanu Narayen. In 2013 Adobe shifted its marketing approach, ending the sale of Creative Suite products on disc and requiring customers to buy monthly subscriptions for cloud-based versions of the programs. Adobe said that this approach allowed it to update and enhance programs more easily and provide users with the highest-quality, most useful tools. Many users, however, complained that monthly subscriptions cost them more in the long run.

The company performed well throughout the 2010s and 2020s, achieving double-digit growth for every year between 2015 and 2022. Despite a dip in growth in 2020 amid a larger economic recession triggered by the onset of the COVID-19 pandemic, the company achieved record revenue in 2022. The 2010s and 2020s also saw Adobe expand by acquiring smaller tech companies, including marketing automation firm Marketo in 2018. As Adobe grew, it also sought to diversify, branching out into e-commerce and other growing sectors.

During this time, the company also shifted away from some of its older products, including Flash. The end-of-life (EOL) date for Flash in December 2020 marked the end of one of the most popular animation tools of the 2000s and the culmination of a lengthy decline in support for the software, which worsened throughout the 2010s as many consumers shifted to using mobile devices, which did not support Flash after 2011. In the 2020s, Adobe continued to innovate, incorporating the use of Artificial Intelligence to better innovate their products.

Impact

While eclipsed in size by other software companies, Adobe has had a significant impact on both personal and professional computing. Its image-editing program, PhotoShop, has been widely used by consumers, and anyone who has downloaded a PDF such as a restaurant menu to a smartphone or tablet probably viewed it on Acrobat. InDesign and Illustrator are prominent tools for professionals. Adobe—in conjunction with Apple and Aldus—gave birth to desktop publishing and helped move professional publishing into a new technological era.

Over the years, the company has received many accolades for its working environment and sense of corporate responsibility. From the mid-1990s into the 2020s, it was consistently listed by Fortune magazine as one of the hundred best companies to work for. It has often been cited for its environmentally friendly policies by organizations such as the US Green Building Council and Newsweek and for corporate giving by the San Francisco Business Times.

Nevertheless, the company has endured criticism as well. Over the years, Flash was widely criticized as unstable and open to security breaches, and the program was not adopted by Apple for the iPhone. In 2011 Adobe announced that it would no longer support Flash for any mobile devices, although it did still offer the program for desktops and laptops. Many users continued to criticize the program, however, claiming that it was plagued by bugs that could lead to security issues for users. Adobe eventually stopped supporting Flash in December 2020, though the software retained its legacy as one of the most popular animation tools of the early 2000s.

Security increasingly became an issue for the company in the first decades of the twenty-first century. In 2014 Adobe revealed that credit card records for 38 million customers had been stolen. Outside computer security groups claimed the hack might have yielded data on as many as 150 million customers. In July 2015, revelations of a hacker group’s ability to use Flash to take over and issue commands to users’ computers forced Adobe to issue several emergency security patches for that program. These problems, combined with criticisms over the move to cloud computing, tarnished the company’s image. Nevertheless, in 2023, Adobe remained a viable and innovative software company that continued to adapt to changing technology.

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