Theories about where MSFT wants to go? Check this out for a bit of convergence…

Could Microsoft out-Apple Adobe?

Let’s examine a few trends and remember that Apple beat its competitors in the education market twenty years ago by having a rabid fan base along with compelling intuitive software.  Microsoft Live’s community had 60 million users last time I checked. Working within the existing Live framework will be critical for any Learning Management Systems (LMS) play that Microsoft chooses to do in the future.

The eLearning potential with Microsoft’s (NASD: MSFT) current portfolio of hardware and software, part of which is the XBox brand, is gaining momentum. I’ve been discussing current instructional design trends with instructional designers, consumer media analysts, military training officers, and gamers. We’ve reached current consensus:

There are a lot of benefits to using the XBox 360 as a training / eLearning platform, primarily because of the XBox Live community.

Having solid revenue generating Intellectual Property (IP) in both hardware and software gives a strong advantage to MSFT in this space. Windows Live Mesh is self descriptive; it meshes all the services together.

How Does Live Mesh Work?

From Ten things to know about Microsoft’s Live Mesh | All about Microsoft | ZDNet.com

Live Mesh builds on the cloud storage, management, service and provisioning and computational fabric that other Microsoft Live services use. On top of that, Live Mesh uses the same identity, synchronized storage and connectivity services that Microsoft uses for other Live offerings.

The “platform” services (a k a the “developer stack”) include the new Mesh Framework, as well as both a cloud and a client software run-time Mesh Operating Environment (MOE).

Live Mesh “experiences” from Microsoft and third-party providers will build on top of these layers.

Windows Live Mesh will make use of Silverlight as Michael Cote explained in People Over Process » Market Context for Silverlight – A Brief Q&A:

Q: What is your overall feeling about Silverlight at this time?

A: At the moment, Silverlight feels like it’s going to be on a full-on contender with Flash and Flex in a short time. Silverlight 2.0 is supposed to bring in the more “hard core” GUI programming features that Flex has.

Perhaps Microsoft’s Mesh project will address the offline synch tick-list of AIR. Then, the battle will be over ubiquity, developer hearts and minds, and control of the web.

Through the PC Silverlight allows some scary-good functionality.

Think about having Instructional Design teams building applications that can reach outside and into the web page itself: From More about Silverlight – Microsoft’s Flex / Flash Competitor

Further to that, Silverlight applications can access and manipulate the browser DOM (meaning they can reach outside and into the webpage itself) so once the Silverlight runtime is more common expect to see many developers of web applications tap into Silverlight for both a performance increase and for better visual enhancements and user experience.

This is important. We are now looking at two-way communication with Silverlight.

Available Silverlight eLearning Tools

I’ve seen a growing demand in Google hits on my site for how to take Captivate content and put it into Silverlight. People are asking about how to take the output from this market dominating tool and repurpose it into Silverlight and this is only the beginning.

Imagine having software tutorials buildable by instructional design staff that can be quickly hashed into something usable for the XBox 360, through XBox Live, or through Windows Live Mesh…

La Jolla-based MadCap Software’s Mimic (Adobe Captivate and TechSmith Camtasia competitor) outputs in Silverlight format. I haven’t heard whether TechSmith or Adobe are intending to put this into their products within the next release cycle.

Where is eLearning in all of this?

There are some other very significant benefits aside from Silverlight; meshing all of these services together adds Windows Live Writer and Instant Messaging in as well.

One benefit is in reaching people through advertising as well as explaining the process: Simple Instructions Work Best and Sell Products

Finding your audience is something that every Marketing person desires to do. Explaining a process so that an audience gets the point is what every Technical Communicator desires to do.

With Microsoft’s Live platform they’ve integrated both of these within their Instant Messaging client.

Regarding Windows Live Writer from Web 2.0 – Windows Live Writer reviewed for blogging:

Yet another entry from MSFT into the Web 2.0 space such as with the Silverlight framework which allows two-way communication from a website, and oh yes… this is for free. That’s pretty disruptive.

Adding to the chaos is the mash of what has occurred within the current eLearning space. Market analysis of eLearning from 2008 Corporate Learning Factbook Values U.S. Training Market at $58.5B:

* E-learning has grown dramatically. The use of self-study e-learning now accounts for 20% of student hours, up from last year’s figure of 15%.

This growth is driven largely by an increase in online training among small organizations (100-999 employees), which are acquiring the skills and technology to make online training a reality.

Analysis: Adobe Media Player, my @%$

The shaky economy plays into this. Re-education of adults is becoming a critical factor in economic restructuring. If industry is closing down, concessions from the unions force retraining. Cost efficient training is a growth industry.

While Adobe (NASD: ADBE)is repositioning itself and firing divisions, Microsoft has an advantage into the eLearning market and can leverage their existing Rich Internet Applications. If MSFT can duplicate what Apple did in the 1980s and entrench themselves into education, it will mean long term success in a disrupted market which has $58.5 billion in potential.

This model could effectively work even with a poor economy and would build an OS-free eLearning model built on IP within hardware and software which could be used globally.

No Jedi Mind Tricks Necessary

Whether there are corporate profits or not the Grinch, it seems, has struck twice in one calendar year for Adobe (NASD: ADBE). You heard my forecast about Adobe’s 2008 earnings here in last year’s posts and who can forget my venting in 2007 regarding Adobe’s negative user support strategy.

Now they have to cut 8% of their global workforce. Looks like the San Diego office will be shut down from the tweets I’ve read and MDowney, the Flex evangelist I was following in my Flex vs. Silverlight series is moving on as well… Good luck to everyone.

From the San Francisco Chronicle: Adobe laying off 600 employees

Adobe Systems in San Jose is laying off 600 employees and will restructure its business, the company announced Wednesday after the stock market closed.

Bottom line analysis for 2009: Adobe will survive in one form or another however all their software programs may not.

No Compelling Reason To Upgrade

Without the Vista mandatory upgrade upswing working in Adobe’s favor, I stated that this year’s sales were going to be significantly lower. I said sell short because there was no compelling reason to upgrade and people would figure they could get by just fine with last year’s model of CS3.

Panic in the streets of Bangalore… MadCap Flare Emerges

Well, ‘panic’ is not entirely fair to state about the Mumbai area after their recent security fiasco. 

Gorillas in the Mists

MadCap Software is currently pounding Adobe on the Technical Communication workflow front. According to the MadCap October press release two independent blogging polls showed MadCap Flare to be the new Gorilla in the Game, promoted up from Chimpanzee:

Flare was identified as the authoring application of choice by more than 39 percent of respondents to the surveys conducted on behalf of the HAT-Matrix.com and I’d Rather Be Writing technical communications blogs.

The surveys represent the first time that Flare, which debuted in March 2006, has seen higher customer use than any other competing solution–including legacy applications that have been on the market for more than a decade.

Add to this the 2008 recession stone skipping across the water and it means sobering trends for ADBE, losing ground on several fronts. From the San Francisco Chronicle:

The layoffs are in progress and represent 8 percent of Adobe’s global workforce, a spokeswoman said. They will affect all regions and business units. Adobe plans to offer more details Dec. 16 during its regular earnings conference call.

I’m not wishing for anyone to be out of work this holiday season. I was initially made aware of this by backtracking the ever-increasing Google hits from my article that detailed last year’s Adobe Holiday season layoffs when I stated: 

Personally, I think this goes back to (my opinion) the unconscious Adobe strategy to offshore all assets. Eventually everyone not performing 80 hour workweeks will lose their jobs in San Diego in favor of India based talent.

Sorry Adobe, No Freeloading From Microsoft’s OS Changes

Finally the insanity of upgrading a major suite like a brain-damaged maze rat hitting the lever for another piece of cheese has been closely examined by the bean-counters.

Again from the Chronicle:

“The global economic crisis significantly impacted our revenue during the fourth quarter,” Adobe’s president and chief executive officer, Shantanu Narayen, said in a statement. “We have taken action to reduce our operating costs and fine-tune the focus of our resources on key strategic priorities.”

Narayen said the chief cause of Adobe’s problems is weaker-than-expected demand for the company’s latest software, Creative Suite 4, which began shipping in October.

In short, economic buyers are looking at the WHY involved with an upgrade to a product every year and not seeing much substance. “Why are you wanting a new version of a product to do your job that you’re already going to do…?”

It simply means the value of the upgrade from CS2 or CS3 to CS4 isn’t compelling enough. I love this part of Narayen’s quote in the Chronicle:

The suite combines several tools used by illustrators and designers and is central to Adobe’s plans to create software that can connect the Web with PCs and phones.

Referring to the Adobe Media Player gambit they were trying to leverage against Microsoft? I’m going to lump that in with the Rich Internet Applications battle analyzed last year.

From CharlesJeter.com – Rich Internet Applications War Is Brewing last May:

Apparently Adobe is betting on its Flash penetration giving it an advantage in shoehorning users into downloading the Adobe Media Player, and Microsoft enjoys the simple advantage of being able to offer Windows Media Player as they have done for nearly ten cycles as an integrated part of the Windows operating system.

In short, Microsoft is continuing to severely pound Adobe in the Media Player world. Adobe is getting no traction with this tactic in this economy.

MSFT is still continuing to attack the Macromedia-originated Flex with Silverlight. Now that their Flex pitchman Downey is out of the Flex role he dominated, I’m wondering how MSFT will respond to this opening. If they’re smart, they’ll hire Downey to take apart his old firm. He has guts and he’s technically smart as well.

Where will Adobe turn? They’ve got plenty of money in the bank to ride this out, it might just be cutting back on innovation.

Theory: Adobe is not going to spend dev money where it’s failing

When your flagship product suite is not selling, what happens to the lower-tier products and the people who support them? They’re expendable. They get cut. 

The second part is directly in the TechComm world. Again, I predicted this last year:

If stock prices start slipping, where are they going to make their cuts? I am predicting that it’s now or never for RoboHelp; if they don’t perform by mid-2008, resources could be pulled off for other products that make a higher profit.

With RoboHelp sliding quickly to the middle of the pack of TechComm tools those resources may not be saved for a rainy day when they could be repurposed to save the company’s bottom line.

I expect axes to cut across new features and for sales of lower tier products like Adobe TCS to stay flat for a good two years.

By the way, Tom Johnson took an undeserved beating in the HATT forums about his survey, and his survey results were redeemed by Char’s hat-matrix.com evaluation.

RoboHelp is, by virtue of Adobe’s business model, going to have resources cut. Even Captivate is in jeopardy; sales figures are probably great but what has Captivate’s upgrade selling point been since the Technical Communications Suite (TCS) came out?

What is the compelling new feature set for TCS?

Bundling mid-grade products together to beat an emerging market leader has failed. According to the two surveys, that strategy just didn’t sell customers on the value of the Adobe TCS products. Even if overall sales are still high, the economic conditions mean the automatic buy orders aren’t going to be authorized.

What does that mean for Technical Communicators?

If you see names changing in the Tech Comm blog at Adobe, it might be time to learn another tool. Being able to add the MadCap Flare software list to your repertoire might net you the job you need should your position become affected by the economy. 

If you can wait another year for the suite upgrade then you do it when times are tough and every dollar counts. Or you migrate to another tool for cost or cost-benefit reasons.

What does this mean for Investors?

It means there’s enough confusion going on that other companies might pull significant market share away from Adobe. That weakens them and makes it easy for takeover.

Related Articles:

• Prove My Help Authoring Tools Survey Wrong <- IRBW
• HATT Survey Results <- Hat-Matrix.com
• Adobe & MadCap’s Cold War: Market Share
• Adobe and MadCap’s Cold War: Who’s the Superpower Today?
• Is MadCap Flare Now Leading Adobe RoboHelp In HAT War?
• Friday Comments Review: RoboHelp vs. Flare
• MadCap Software’s New Digs | More Adobe Layoffs
• My Position on Adobe and RoboHelp
• Adobe’s 3Q Profit Beats Predictions <- 2007

Don’t say I didn’t tell you about this coming up… Clearly IE8 and Silverlight is a triple threat when looking towards adoption of RIA.

From The Register:

TechEd 2008 Bill Gates has announced the next betas of Internet Explorer 8 and Silverlight 2 while outlining plans from Microsoft on development services…

The second beta of Microsoft Silverlight cross-browser media player and development platform will be released by the end of this week under a Go Live license. 

A Go Live license lets developers use pre-release code in real-world applications, but without the safety net of Microsoft support.

The second beta had been promised for the second half of 2008, so it’s… early!

As for Bill Gates’ last day, this YouTube video is pretty good with some great celeb cameos.

FWIW, GoLive is pretty cool. I’ve been working on a review for some time updating us on Silverlight and GoLive. With all the hubbub going on for me we’ll see how that looks for later this week.

Related Articles:

Rich Internet Applications War Is Brewing

Adobe FLEX vs Microsoft Silverlight Part 1

More about Silverlight – Microsoft’s Flex / Flash Competitor

How to convert 60 million users to Silverlight quickly

My LMS / eLearning Disruptive Technology Concept

Halo 3, XBox and Technical Communication? (Part 5)

Microsoft Releases Silverlight, Extends Support to Linux

CharlesJeter.com Category: Rich Internet Applications