In July 2004 Thomas Ehrnstrohm, director of global IS strategy at pharmaceutical giant AstraZeneca, placed an order for 50,000 copies of Adobe Acrobat. To most people, Acrobat is the useful reader that enables them to download page-image files from the Internet or open them when received as email attachments. At AstraZeneca, Acrobat is regarded as nothing less than a better way of doing business.
“With most new drugs subject to a 10-to-15-year development cycle, and requiring collaboration from scientists and key business stakeholders around the world, it’s critical for AstraZeneca to maintain tight control over all documentation,” says Ehrnstrohm.
“Acrobat will make it far easier to manage external communications by allowing us to maintain precise, secure records of all correspondence with regulatory bodies, partners, customers and patients. Acrobat also enables simultaneous, shared access to files and will make it much easier for the company to track documents as they progress through the lengthy regulatory review process,” he says.
Four years ago, the idea that a major multinational like AstraZeneca would see the need to globally deploy Acrobat, or regard Adobe as a fit partner for such a project, would have raised more than a few eyebrows. San Jose-based Adobe may be the world’s second biggest desktop software supplier, and its Acrobat Reader PDF viewer might be a near ubiquitous element of the enterprise desktop software inventory, but for most of its 23-year history, Adobe has been a big fish in the relatively small world of desktop publishing (DTP) and graphic design.
Today though, “that’s beginning to change,” says Adobe’s president and CEO, Bruce Chizen. In an increasingly regulated world, where the ability to produce, distribute, process and track high-quality documents in a reliable, secure but universally accessible way is becoming ever more important, the PDF-based technology that Adobe has largely given away for the past 10 years is coming into its own. Organisations as diverse as “DEFRA [the UK’s Department of Environment, Farming and Rural Affairs], AstraZeneca and Lloyds TSB are now all treating Adobe as mission critical,” claims Chizen.
Adobe’s transformation has not happened overnight – or by accident. It started in 1998 at a time when, according to Chizen, Adobe was essentially a provider of point-solutions to creative specialists. Its two primary products, PhotoShop (for image manipulation) and Illustrator (for graphic design), were market leaders, but new versions of these products slipped their launch deadlines just as Adobe’s important Japanese market succumbed to Asia’s late 1990s bout of economic flu.
While most other software companies were virtually printing money, Adobe’s stock price stalled and the company’s founders, PostScript author John Warnock, and fellow desktop publishing (DTP) pioneer Charles Geschke, initiated a senior management clear-out. Chizen was promoted to head the Adobe’s first unified product and marketing group, and imme-diately set about a painful restructuring effort which only narrowly averted a hostile takeover bid from rival DTP vendor, Quark.
With hindsight, Chizen believes that Adobe’s late ’90s crisis was a timely alert ahead of the dot-com bust that many other software vendors are only just beginning to recover from. The company that emerged from this crisis had a streamlined reporting system, a better structured global organisation and, critically, a refined strategy that is no longer focused on individual products and one or two narrow customer groups.
The new Adobe has four revenue sources: the company’s creative and professional division contributes about 37% of the company’s revenues; a digital imaging and video unit contributes 25%; its long-established OEM business (centred around the PostScript font technology) brings in 5% and finally, the intelligent documents group, which now accounts for 33%.
The first three of these activities – 67% of the business – helped Adobe rebound strongly from its late 1990 woes and record eight consecutive quarters of increased net income. However, it is Adobe’s fourth business, the intelligent documents division, that is now primarily responsible for the company’s surging revenue.
Since its creation in 2000, this business has more than doubled its revenue to $444.1 million in fiscal 2003, and already generated $266.4 million in the first half of 2004. It is the primary reason why Adobe is starting to attract the strategic interest of organisations like AstraZeneca.
Essentially, Adobe’s intelligent document business has been created to marry the worlds of paper and electronic documents. US companies, for example, last year spent $16 billion just re-keying data from paper documents into electronic systems – and that pattern is set to get worse.
Both communities need systems that allow them to preserve their investment in the essentially human-oriented world of paper documents, but without handicapping their ability to exploit the efficiencies to be had from investments in machine-driven e-documents technology. It is a situation that might almost have been invented for Adobe’s benefit.
In the world of paper documents Adobe’s Illustrator graphic design package is a de facto standard, the source of more company logo and letterhead designs than probably all other graphics packages combined. And, when it comes to distributing and viewing rich ‘paper’ documents electronically, what company does not render its documents as portable documents format (PDF) files accessible to the more than 700 million desktops that are today equipped with the Adobe Acrobat reader?
The challenge for Adobe’s intelligent documents division has been two-fold. First, it has had to take this strong desktop paperpublishing position and use it as the foundation for a new set of server-based electronic document management products. Then, it has had to extend the confidence that its creative customers have in its products to enterprise application buyers, who are more used to dealing with the corporate software giants such as IBM, Microsoft, SAP and Oracle.
Given Adobe’s track record as a software engineering company – responsible for such pivotal industry standards as PostScript and PDF – its response to the technical challenge has been predictably strong. The company spent roughly 20% of its $1.3 billion revenue for 2003 on research and development, and for the past several years, says Chizen, the bulk of this has been devoted to the intelligent documents platform development.
So far this effort has produced two key products: Adobe’s definition of an XML Data Package (XDP) which allows files to be described and rendered as either PDF or XML documents as required, and a document management architecture which allows a common set of services to be applied to documents derived from any enterprise application or web service, before delivery to the client as an electronic or printed document.
The ability to seamlessly switch documents between the human-facing world of PDF, and the machine-driven world of XML is fundamental to Adobe’s document strategy, and promises to offer enterprise customers the best of two worlds. For the growing number of companies that are now adopting XML schemas as a means of describing business processes, those schemas can now be extended to the documents that are the currency of so many business transactions, making the data they contain equally accessible to end-users and back-end applications.
XML meets PDF
This is the starting point for the conception of document and forms-based processes that offer far greater opportunities for automation than ever before, particularly when those documents are exposed to enabling services which can plug into Adobe’s intelligent document platform.
Already, for instance, Adobe has released its own Adobe Forms server that streamlines the process of creating electronic forms – described as either XML or PDF files – that understand enough about their own role in a business process to be self-validating, and capable of changing dynamically according to the data they capture. Other Adobe document service products, such as LiveCycle, enable documents to be sensitive to existing business process management (BPM) regimes, or to employ security features – such as digital rights management – that allow them to play a self-managing role in collaborative working systems.
From a systems integration perspective, the Adobe intelligent document platform offers a way for third-party vendors to apply new services to their documents by sup-porting the XDP model. And application vendors, such as SAP and IBM, are already using the intelligent document approach to expose data generated by their enterprise applications as web services. For Adobe’s enterprise customers, the intelligent documents approach allows a variety of different systems-level policies to be flexibly deployed against individual documents, so as not to force an investment in proprietary systems that compromise the documents’ ability to be easily distributed and accessed by end-users – both within and without the corporate firewall.
Early adopters of Adobe’s intelligent documents technology include the IRS in the US. Using PDF to distribute forms to the millions of US citizens who now complete tax returns online was a natural decision for the IRS. However, by exploiting Acrobat Reader’s less well-known ability to act as a client for richer Adobe documents services, the IRS can also now apply routines that make electronic forms self-validating, and is even capable of supporting a bar-code based e-signature system that makes the completed forms legally binding.
As sales of Adobe’s intelligent PDF/XML-oriented server products increase (they are still only the equivalent of a fifth of Acrobat desktop sales) more applications will emerge that advertise the virtue of an intelligent document approach. However, with Microsoft now also taking a similar document-driven approach to process design and delivery with its InfoPath product, and other vendors beginning to see similar potential in the W3Cs emerging XForms standard, Adobe is not guaranteed to have the market for intelligent documents all to itself.
To guard against the possibility of seeding a new market – only for better-known enterprise software vendors to reap the benefits – Adobe has not been slow to enlist the support of application vendors, such as EMC’s Documentum and IBM, who might otherwise be rivals. Both these vendors now use Adobe Forms as a front-end to their respective repository-based document and content management systems.
It could be argued that the lack of a document repository solution of its own is a potentially critical gap in Adobe’s enterprise document management strategy, but Chizen believes it is nothing of the kind. “We think that that document repository is an important part of the workflow systems, but we wouldn’t add much value as a repository provider,” he says.
Instead, by partnering with the likes of IBM, Adobe’s enterprise software is now in the product catalogues of IBM’s 5,000-strong global sales force, and equally accessible to the 1,000-strong sales force of SAP, which is now encouraged to offer Adobe technology to the 28,000 SAP customers who are looking for ways of publishing information to users outside their corporate firewall.
To some extent, Adobe is playing a slightly disingenuous game by presenting itself as a desktop software company to enterprise application vendors it wishes to partner with, whilst also quietly building a salesforce of its own (albeit among the ranks of IBM, SAP, BEA and other enterprise software salesforces) to promote itself as a bona fide enterprise server software vendor to its own customers. But none of its new enterprise software partners are likely to complain too much if, by penetrating their customer bases with its intelligent document platform, Adobe is at least preventing Microsoft finding yet another route into the corporate application market.