Shantanu Narayen, recently appointed President and Chief Operating Officer of Adobe Systems, browses through his emails. “Look at my inbox.

Everything comes into this in PDF (portable document format),” he tells us, grinning enthusiastically at the rate at which the PDFs are percolating the global markets. It’s been more than a decade since PDFs were created and there is still no foreseeable competition.

Fortunately, still Adobe has a larger market to capture—it has 16 million users out of an estimated 60 million.

Last quarter, the company witnessed overwhelming results—with PDFs contributing 42 percent of its $472 million revenue. Bruce Chizen, CEO, verbosely stated his ambition of upping that percentage to 50 by the next quarter. If Chizen’s words translate into reality, then Adobe could possibly brand their name on all digital documents globally.
Intelligent documents, as the company refers to the Acrobat PDF, would make Adobe the monarch in its space.

But predictions are not pronouncement. As opportunity increases the competition will as well. For example, Microsoft may launch software on its Windows operating system that could do the same work as PDF for free. And this could change Adobe’s business. However, Adobe doesn’t seem to subscribe to words like “may be” and “perhaps.” “Our main concern now is promoting PDF awareness to various industries,” says Narayen—obviously hinting at Adobe’s disinterest to brainstorm for lurking competition.

Narayen, the No.2 official at Adobe, reasons how Adobe is losing to its two most important factors: lack of awareness that Adobe has created in delivering solutions, and that unawareness-bred homegrown inventions. “Enterprises are investing massively in all its business critical transactions to revamp their back office works with the available knowledge management tool, but the real problem lies in how to transfer documents without any changes,” he says. To capitalize on this transformation from manual processes documentation to electronic documentation, Adobe is aggressively marketing on its Acrobat and PDF products.

“Truly, Adobe’s real competitive advantage comes with its core competency involved in building a very core technology platform,” says Narayen, who is now the head of all technology divisions at Adobe, including the engineering technology group, core technology groups and advanced technology group. Today, Adobe offers products ranging from print and web publishing software, online services, digital imaging and video as well as audio editing. All these classified into two important market segments: creative professionals who use Indesign, PremierePro, Illustrator or Type and consumer customers who use Photoshop, Photoalbum and Photodeluxe.

Although these products have been less visible than the PDF, Narayen is optimistic of Adobe’s latest bundled product, Creative Suite. A package that assimilates all required publishing softwares like Photoshop, Indesign, Illustrator, GoLive, Acrobat and Design guide in one basket giving an extra advantage to its creative professionals. Narayen’s instincts as a co-founder of Pictra, a digital software company in 1996, also assisted him in sensing a massive migration among the user community from analog to digital photography. For this, the company introduced products like Photoshop and Photoalbum for all its customer segments.

At Adobe, Narayen believes innovation takes priority. As the company cashed on newer areas like web, print and digital publishing, the next transition was with video—a trend which large companies like Google, Yahoo, and Microsoft are raving about. “In the imaging and video area, video as a medium of communication will experience enormous growth given the ubiquity of DVD playback as well as the increasing adoption of broadband,” explains Narayen. “We expect our creative professional customers to increasingly integrate video into their work.” Narayen is also attempting to build a new era in today’s publishing industry, known as network publishing, using Adobe. After desktop and web publishing, this would be the third evolution of publishing using a network of interactive softwares and products.

All these products currently account for 58 percent of Adobe’s revenues and obliterate competition from heavyweights like Microsoft, Apple, Quark and some of the field’s smaller players. However, Narayen does not consider them as major competitors (so will not its competitors) because Adobe’s culture as a company is strong and its focus on customer satisfaction is unique. “This is because of the good grasp we have on what the customer wants and how we could lead the customers concern,” he says. “Our strategy for retaining customers is simple: provide an excellent product that provides not only good value, but solves problems that customers may not have realized that they had.”

To detect software glitches and customer problems, Adobe established R&D centers in India, Australia, Germany, Japan, England and Canada, among others. Not only did these centers develop parts for larger products delivered to U.S. markets but originated a global product from conception to fruition.

Conception is something that Adobe highly admires. One of Narayen’s core goals in Adobe is hiring people who can conceive big ideas. “We hire passionate and intelligent people for Adobe,” he says, “and this always gives us a competitive edge.” As any company would aspire to, Adobe expects its employee to add value to its image rather than simply doing a skill in which he or she is proficient. “Adobe is a company based on certain values and run on those value based principles. If a person doesn’t subscribe to our values then he tends not to survive in the company,” says Narayen regarding Adobe’s culture for company building. “Our motto is integrity, customer focus, teamwork, and leadership.”

Adobe has another motto, ‘to facilitate innovation within the organization and incubate new businesses.’ To boost its innovation the company set up “seed”, a group of entrepreneurs and residents who focus on how to incubate new businesses within Adobe. A business idea Adobe conceived and is now executing is the barcode server. A simple design that assigns a barcode to selected documents on Adobe Reader, which people often use to copy and sign, then re-key into the document.

By adopting this method, one could create a barcode while entering data, keep the content intact and retrieve the data in the exact XML schema as one wishes by swiping the barcode. “As we grow our existing businesses we want to make sure that we bring newer innovation from what we learn from the Silicon Valley, empower people with it and see them champion in a particular idea,” says Narayen.

Today, Adobe’s products are globally well accepted and Narayen is witnessing emerging markets worldwide. “We see India and China as potential markets, considering the wave of transformation happening in the government content workflow industries and digitization of everything,” he says. “Given the country’s myriad languages, India is surely a place to market and innovate.” Enterprise business is permeating not just in the Asian and the European countries but in America as well. Currently their only enemy is piracy.