The company that owns Photoshop dominates the creative software market thanks to these two things

The work of people in the world of creative and professional designers around the world is mainly based on Adobe software. Thanks to its dominance in the innovative software market, the 40-year-old company has become one of America’s most valuable technology companies.

Adobe was founded in 1982 by two former Xerox employees, John Warnock and Charles Geschke. Products of today’s Adobe Creative Suite include Adobe Illustrator graphics software, Adobe Acrobat Reader PDF reader and editing software, Adobe Premiere video processing software, Adobe After Effects and can’t help but mention the name. familiar graphics software Photoshop and dozens of other products.

In the beginning, Adobe had only one product, PostScript. This is a programming language designed to print text on laser printers. In the early 80s of the last century, people mainly printed documents using dot matrix printers. The needles make small dots on the paper to form letters, pictures. This technique makes the text look rough, blurry, and inaccurate. The introduction of PostScript in 1984 created a new breakthrough in electronic publishing, helping users create products that look more professional.

Buy back, buy back, and buy back

To maintain competitiveness for many years, in addition to developing its own products, Adobe also made dozens of investments and acquisitions. Like many other big tech companies, acquisitions help Adobe break into new product areas.

In 1994, the company merged with rival Aldus. Aldus products such as PageMaker publishing software and After Effects animation software are included in Adobe’s product line. They were later developed into Adobe InDesign and Adobe After Effects as we know them today.

In 1995, Adobe acquired Photoshop. The software is so famous that it has become a familiar verb. Like ‘Google this information’, people say ‘Photoshop for me this picture’. 90% of creatives and designers in the world use this software.

In 2005-2006, Adobe acquired another competitor, Macro Media, with prominent products being the web development tool Dreamweaver, and Flash video player. Both are included in the Adobe Creative Suite.

Most recently, Adobe acquired design platform Figma for $20 billion. This is the largest acquisition at a price 50 times the revenue of Figma. This shows how ‘hungry’ Adobe is for Figma.

Switch to recurring subscription fees

Adobe’s success also comes from timely adaptation. In 2011, Adobe began to transition from a one-time product sale to a software-as-a-service (SAS) model that charges a recurring subscription fee. This model has completely changed the consumption behavior of software users. Instead of having to spend a huge amount of $ 1,300 to own Photoshop for life, people pay a recurring fee of $ 70 / month to rent it.

Initially, this decision was considered risky because most of Adobe’s revenue comes from tangible products such as software CDs. But time has shown this decision to be correct. Adobe’s revenue not only continues to grow, but also mainly comes from recurring subscription fees. In 2021, Adobe recorded revenue of $15.79 billion. In which, registration fee revenue accounts for 90%.

Reference from: WSJ