RoboHelp’s Dysfunctional Corporate Accounting | All I Hear From Adobe Are Crickets

Adobe RoboHelp,Corporate Authenticity,SEC,Securities and Exchange Commission,Enron,WorldCom

I’m hearing crickets and very little else about Adobe’s exclusion of RoboHelp from their SEC and Investor Relations documents . I was hoping that someone close to Adobe would be able to figure out what was up with the budgets, so I posted onto the HATT. No luck. No Adobe MVPs even touched the subject. Nobody knows nuthin’.

As far as everyone knows, it’s an obscure area of expertise, yet it’s critical. When it gets screwed up, it’s like everyone’s paycheck bounced.

How Did All This Start ?

I was just looking for more information regarding their technical support expenditures and the level of outsourced overseas labor used within the company.

Note: Just tonight I found the tech support information I was looking for. While ASP Online says small companies spend 20% on Tech Support, the industry average is 8%, and according to Adobe’s 10-K their overall spending level is a mere 3%. No wonder nobody is happy with Adobe’s tech support.

I was also looking for RoboHelp specific data, which should have been found within their internal documents or within the SEC Filing 10-K under their market segment.

From the Securities and Exchange Commission:

The annual report on Form 10-K provides a comprehensive overview of the company’s business and financial condition and includes audited financial statements.

From Adobe’s 10-K regarding RoboHelp’s market risks :

In technical Web authoring and publishing, our Adobe RoboHelp product faces competition from large-scale Web publishing systems, XML-based Web publishing companies, as well as lower-end publishing products such as Microsoft Word. Competition is based on the quality and features of products, the level of customization and integration with other publishing system components, the number of hardware platforms supported, service, and price. We believe we can successfully compete based upon the quality and features of the Adobe RoboHelp product.

Good so far. This is information that shareholders are supposed to have prior to investing, otherwise it’s not full disclosure. That much I know to be true.

Also, the budget for everyone (tech support, developers, marketing) has to come from somewhere, allocated directly from the segment.

Of course they won’t let you know specifics…

Again from Adobe’s 10-K:

…We have the following segments: Creative Solutions, Knowledge Worker Solutions, Enterprise and Developer Solutions, Mobile and Device Solutions, and Other, which includes the Print and Classic Publishing and Platform segments.

I found out RoboHelp was not listed within the 10-K segments and it raised my eyebrows. All I’m asking is which market segment RoboHelp falls into. Does RoboHelp belong in Knowledge Worker Solutions, Other, or what?

Does Adobe Have To Detail Every Product’s Budget?

One more time from Adobe’s 10-K:

The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies. With the exception of goodwill, we do not identify or allocate our assets by the operating segments.

So Adobe doesn’t have to release specifics in the 10-K but they do have to account for the segment a software program falls into. Now we enter dysfunctional behavior.

In fact, their Investor Relations pages provided exactly the information the 10-K stated (above) they didn’t provide. I’m sure accounting firms provide one report, and marketing and PR provides the other.

Yet the detailed information didn’t provide anything for RoboHelp as seen in last week’s post.This stands out among all the other software acquired in the Macromedia purchase, and in the other Adobe products.

No revenue, no spending. RoboHelp’s still a black hole. Now I’m getting on my SEC high horse and it’s time we all got acquainted with this regulatory commission.

Basic SEC for Help Authoring Tool Users

Look, you just can’t have a public company and have black holes in the accounting. Money has to come from somewhere! It can’t just pop in from nowhere, and earnings have to be reported somewhere also.

Investor Relations documentation is directly related to the SEC because it includes forward looking information such as Product Release cyles!

That’s the rub for public companies. Private companies can tell everyone (except the IRS) to go spin if people want to know what their budgets are and what their specific earnings are.

The SEC requirements for public companies are there for shareholder protection. In return for this disclosure, they are allowed to raise money through the sale of shares. That’s for all of our protection so we don’t lose our shirts by investing in misrepresentation.

Without this, we’re left looking at a simple slush fund. This means that the RoboHelp revenue stream is pumped into another product’s revenue stream. We’ll call this phantom product Product B. The outlay of expenditure for RoboHelp design and support can come from the same Product B or…

It can come from other product lines entirely.This would be skirting the edges of unethical reporting because the true indication of the product’s commercial success would be cloaked.

Worst Case Damage by Misrepresentation of Revenue Streams

Enron. WorldCom. Arthur Andersen. ’nuff said.

Why does this matter to HAT users?

Easy - being a public company, you can read the writing on the wall if the budgets in your favorite start getting decreased. For investors, if the segment is tanking you can look at the competition to see if someone’s killing them. You can also see how committed Adobe is to that segment by how much of a budget they’re putting into it.

Adobe is gracious enough to provide plenty of information on their Investor Relations page for us to discern everything - except about RoboHelp.

Why Does Omitting RoboHelp Matter?

I’m skeptical about Adobe’s level of commitment to RoboHelp and the Help Authoring Tool (HAT) Market. The reason Adobe’s commitment to RoboHelp is suspect is simple; on again / off again indicators going ad infinitum.

1. Senior technical support staff gets laid off in June, then they want them back in July.This occurs even though Adobe has a market-low 3% expenditure on product technical support.
2. Macromedia shut the product down in 2005, the laid off developers start MadCap, Adobe says in 2006 that they’ll be there.
3. They release RoboHelp 6 not X6 which shows a lack of knowing the market even to the product’s naming convention.
4. Now RoboHelp 7 is getting released, but RoboHelp doesn’t even show up on Adobe’s Investor Relations Product Listing.
5. Nobody with any Help Authoring Tool experience is left at the reins controlling this runaway horse.
6. There are no familiar faces except for RJ Jacquez, but he’s not talking about the hard data behind the RoboHelp market.

Remember, Adobe says they don’t have to release the information in the 10-K, yet they did release the specific product line information in their Investor Relations documentation. They are supposed to detail where RoboHelp would fall into as a segment, yet they didn’t.

Dysfunctional. At best.

Clear as mud? Let me know…