Next Clash of Titans: Microsoft vs. Adobe

By Ben Bajarin

Microsoft’s battles over the years, with companies like Apple, Sun and most recently Google, are the stuff of software legend. The next competitor to visit the woodshed: Adobe.

Microsoft is the largest software company in the world and its products touch the lives of millions of consumers and businesspeople each day. Despite its dominance, Microsoft still faces very tough software competition from many different directions.

For example, just about everyone knows about the quarter-century long software war between Microsoft and Apple in personal computers – which has now found a new battlefield in mobile devices.

But another software war in which Microsoft is enmeshed is much less known – yet may be just as important: between Microsoft and Adobe in a duel to become the dominant Internet software platform.

It’s easy to forget that, like Microsoft, Adobe also touches millions of people daily – though to a lesser degree . . .except for one incredible product: Flash. Flash software has been the industry standard for glossy/multimedia/interactive web experiences for about a decade now and it continues to gain developer attention and mind share. It is the Windows of multimedia. And Microsoft wants that market.

Adobe has several tricks up its sleeve to maintain its lead. For example, the underlying architecture for Flash is called “Flex” and it runs in the Adobe Integrated Runtime Environment or “AIR.” This combination is crucial for Adobe because it is likely that someday all computing applications and processor heavy lifting will migrate from the local desktop to the Internet. When that happens, the world will need a standard Internet platform to run on — and right now, Adobe AIR is the leading contender.

But now Microsoft is making its move.

Obviously, with Internet Explorer, Microsoft already owns the main consumer conduit to the web. But the world is changing fast, and Microsoft is racing to adapt. In particular, in the world of software, power has shifted to the developers – and they care less about the plumbing than the tools. Microsoft understands this and has developed its own proprietary programming environment, its Flash Killer, called Silverlight.

Being Microsoft, Silverlight has already experiencing delays. Nevertheless, so great is the anticipation for this platform that new third party applications are already showing up on-line. That means that when Silverlight does finally see the light of day, it will arrive already supported by numerous applications. Even better, just because it is Microsoft, the company will escape the biggest challenge facing most such new technologies – getting the platform out there to a critical mass of users. When you are Microsoft, and can simply push the install out over the Web to a billion users as a Windows update or a Vista built-in. It’s that built-in advantage that still makes competitors tremble.

But even if Microsoft can force much of the world (remember its past anti-trust troubles?) to adopt Silverlight, it can’t make users – or, more important, developers – love it. The real challenge facing Microsoft is how to get the best developers on board developing some of the best new web software on the Internet. And to do that Microsoft not only must show that Silverlight can be as innovative as anything produced by the much-more technically respected Adobe, but that it is committed to continuously upgrading Silverlight to keep it at the cutting edge.

But Adobe has always prided itself on its technical acumen . . .and it is hardly standing still waiting for Microsoft to catch up. Adobe is already planning to respond to the Silverlight challenge with ‘Flash 10’, which will support the hot new Open GL programming language, which is used to create rich 3D environments PC for video games. Adobe hopes that Flash 10 will attract software developers who want to explore so-called visual computing, i.e., highly visual and multimedia computer interfaces. If the history of Adobe Flash is any indication, Flash 10 is likely to spark a new wave of software innovation.

In other words, we have the classic duel that has defined the electronics industry for more than two decades: Microsoft versus the Innovator. The Innovator can win (or at least stay alive) as long as it can stay far enough ahead and capture the imaginations of the creative types. Microsoft can win if by leveraging its position to capture dominant market share, staying within range of the Innovator, and wait for its opponent to stumble.

Who will win this Internet Platform War? It’s too early to tell. But it will be a close-run thing: Microsoft isn’t the company it used to be, and Adobe isn’t some newcomer like Netscape. Both companies have the depth and the cash to fight this one for a long time. . .and that’ll likely be good news for the rest of us.

Ben Bajarin is Director of the Consumer Technology Practice for Creative Strategies, Inc. in Silicon Valley.