Adobe Boosts Enterprise Growth in Third Quarter

Adobe Systems (Nasdaq: ADBE) released its third quarter 2004 earnings on Monday, reporting $403 million in revenues, a 27 percent increase from the same period last year.

Adobe currently shows $1.2 billion in revenues on the year to date, only $60 million shy of topping 2003's final numbers. The company currently reports 3,749 employees worldwide.

Although it remains one of Apple's (Nasdaq: AAPL) most significant partners, Adobe has also seen its platform mix shift to a broad Windows base. Currently 70 percent of its revenues come from Microsoft (Nasdaq: MSFT) platform users.

Effects of Accelio

The San Jose-based software maker remained steady following a solid second quarter. Its enterprise segment is now seeing results from its 2002 acquisition of Accelio, a Canadian software firm focused on electronic forms technology.

Forrester Research senior analyst Robert Markham suggested that the acquisition allowed Adobe to join the enterprise market with LiveCycle.

"Adobe's enterprise forms strategy gets a boost with the announcement of LiveCycle, which will propel eForms into wide use and provide a competitive target for competing forms vendors," Markham recently wrote to Forrester clients.

Java-Based

Adobe LiveCycle, first released in June, is a Java (J2EE)-based solution for large organizations seeking a "paperless" environment. Through a collection of front- and back-end tools, electronic forms can be provided in Acrobat PDF and HTML formats to local and remote users. Ultimately the resulting data can be captured for management through a rules engine.

"This approach will be especially relevant to the financial, insurance, and government verticals. Adobe's initial targets have been the public and financial services sectors, with plans for aggressive expansion into other industry segments," Markham continued.

Platform Neutral Solution

LiveCycle's Java architecture opens up the platforms it can support. Based on Adobe's track record on Apple and Microsoft technology, this move appears to be strategic and one that acknowledges the varying server-side environments at the enterprise level, along with the heterogeneous client operating systems found in many industry verticals.

Some analysts, including Markham, have suggested Adobe will require more .Net integration in LiveCycle.

"The Adobe strategy is to ensure the LiveCycle platform is equally supported in both J2EE and Microsoft .Net environments," Markham noted. "However, Adobe also recognizes the need to provide easy integration options to .NET."

Competing at the Top

For his part, Markham expects that as Adobe builds upon its enterprise product portfolio, it will be going up against the majors in the e-forms sector, including FileNet (Nasdaq: FILE), Microsoft and Verity (Nasdaq: VRTY).

He believes Adobe brings credibility through its reputation. "Because of Adobe's size and resources, it is having a profound effect on the enterprise forms market, which up to now has only been served by small vendors," Markham said.