S&P 500 Component
|December 1982; 34 years ago (1982-12)
Mountain View, California, U.S.
|Adobe World Headquarters,
San Jose, California, U.S.
|List of Adobe products|
|US$5.85 billion (2016)|
|US$987 million (2016)|
|US$478 million (2016)|
|US$12.85 billion (2016)|
|US$7.89 billion (2016)|
|15,706 (Q4, 2016)|
Adobe Systems Incorporated (/əˈdoʊbiː/) is an American multinational computer software company. The company is headquartered in San Jose, California, United States. Adobe has historically focused upon the creation of multimedia and creativity software products, with a more recent foray towards rich Internet application software development. It is best known for Photoshop, an image editing software, Acrobat Reader, the Portable Document Format (PDF) and Adobe Creative Suite, as well as its successor Adobe Creative Cloud.
Adobe was founded in December 1982 by John Warnock and Charles Geschke, who established the company after leaving Xerox PARC in order to develop and sell the PostScript page description language. In 1985, Apple Computer licensed PostScript for use in its LaserWriter printers, which helped spark the desktop publishing revolution.
As of 2015, Adobe Systems has about 15,000 employees worldwide, about 40% of whom work in San Jose. Adobe also has major development operations in Newton, Massachusetts; New York City, New York; Minneapolis, Minnesota; Lehi, Utah; Seattle, Washington; San Francisco and San Luis Obispo, California in the United States.
The company was started in John Warnock's garage. The name of the company, Adobe, comes from Adobe Creek in Los Altos, California, which ran behind Warnock's house. Adobe's corporate logo features a stylized "A" and was designed by the wife of John Warnock, Marva Warnock, who is a graphic designer.
Steve Jobs asked to buy the company for five million dollars in 1982, but Warnock and Geschke refused. Their investors urged them to work something out with Jobs, so they agreed to sell him shares worth 19 percent of the company, for which Jobs paid a five-times multiple of their company's valuation at the time, plus a five-year license fee for PostScript, in advance. The purchase and advance made Adobe the first company in the history of Silicon Valley to become profitable in its first year.
Warnock and Geschke considered various business options including a copy-service business and a turnkey system for office printing. Then they chose to focus on developing specialized printing software, and created the Adobe PostScript page description language.
PostScript was the first truly international standard for computer printing, as it included algorithms describing the letter-forms of many languages. Adobe added kanji printer products in 1988. Warnock and Geschke were also able to bolster the credibility of Postscript by connecting with a typesetting manufacturer. They weren't able to work with Compugraphic, but then worked with Linotype to license the Helvetica and Times Roman fonts (through the Linotron 100). By 1987, PostScript had become the industry-standard printer language with more than 400 third-party software programs and licensing agreements with 19 printer companies.
Warnock described the language as "extensible", in its ability to apply graphic arts standards to office printing.
Adobe's first products after PostScript were digital fonts, which they released in a proprietary format called Type 1. Apple subsequently developed a competing standard, TrueType, which provided full scalability and precise control of the pixel pattern created by the font's outlines, and licensed it to Microsoft.
In the mid-1980s, Adobe entered the consumer software market with Illustrator, a vector-based drawing program for the Apple Macintosh. Illustrator, which grew from the firm's in-house font-development software, helped popularize PostScript-enabled laser printers.
Adobe Systems entered NASDAQ in August 1986. Its revenue has grown from roughly $1 billion in 1999 to roughly $4 billion in 2012. Adobe's fiscal years run from December to November. For example, the 2007 fiscal year ended on November 30, 2007.
In 1989, Adobe introduced what was to become its flagship product, a graphics editing program for the Macintosh called Photoshop. Stable and full-featured, Photoshop 1.0 was ably marketed by Adobe and soon dominated the market.
In December 1991, Adobe released Adobe Premiere, which Adobe rebranded as Adobe Premiere Pro in 2003. In 1992, Adobe acquired OCR Systems, Inc. In 1994, Adobe acquired Aldus and added PageMaker and After Effects to its product line later in the year; it also controls the TIFF file format. In the same year, Adobe acquired LaserTools Corp and Compution Inc. In 1995, Adobe added FrameMaker, the long-document DTP application, to its product line after Adobe acquired Frame Technology Corp. In 1996, Adobe Systems Inc added Ares Software Corp. In 2002, Adobe acquired Canadian company Accelio (also known as JetForm).
On December 12, 2005, Adobe acquired its main rival, Macromedia, in a stock swap valued at about $3.4 billion, adding ColdFusion, Contribute, Captivate, Acrobat Connect (formerly Macromedia Breeze), Director, Dreamweaver, Fireworks, Flash, FlashPaper, Flex, FreeHand, HomeSite, JRun, Presenter, and Authorware to Adobe's product line.
Adobe released Adobe Media Player in April 2008. On April 27, Adobe discontinued development and sales of its older HTML/web development software, GoLive in favor of Dreamweaver. Adobe offered a discount on Dreamweaver for GoLive users and supports those who still use GoLive with online tutorials and migration assistance. On June 1, Adobe launched Acrobat.com, a series of web applications geared for collaborative work. Creative Suite 4, which includes Design, Web, Production Premium and Master Collection came out in October 2008 in six configurations at prices from about USD $1,700 to $2,500 or by individual application. The Windows version of Photoshop includes 64-bit processing. On December 3, 2008, Adobe laid off 600 of its employees (8% of the worldwide staff) citing the weak economic environment.
On November 10, 2009, the company laid off a further 680 employees. Adobe announced it was investigating a "coordinated attack" against corporate network systems in China, managed by the company.
Adobe's 2010 was marked by continuing front-and-back arguments with Apple over the latter's non-support for Adobe Flash on its iPhone, iPad and other products. Former Apple CEO Steve Jobs claimed that Flash was not reliable or secure enough, while Adobe executives have argued that Apple wish to maintain control over the iOS platform. In April 2010, Steve Jobs published a post titled "Thoughts on Flash" where he outlined his thoughts on Flash and the rise of HTML 5. In July 2010, Adobe bought Day Software integrating their line of CQ Products: WCM, DAM, SOCO, and Mobile
In January 2011, Adobe acquired DemDex, Inc. with the intent of adding DemDex's audience-optimization software to its online marketing suite. At Photoshop World 2011, Adobe unveiled a new mobile photo service. Carousel is a new application for iPhone, iPad and Mac that uses Photoshop Lightroom technology for users to adjust and fine-tune images on all platforms. Carousel will also allow users to automatically sync, share and browse photos. The service was later renamed to "Adobe Revel".
In October 2011, Adobe acquired Nitobi Software, the makers of the mobile application development framework PhoneGap. As part of the acquisition, the source code of PhoneGap was submitted to the Apache Foundation, where it became Apache Cordova.
On November 9, 2011, Adobe announced that they would cease development of Flash for mobile devices following version 11.1. Instead it would focus on HTML 5 for mobile devices. On December 1, 2011, Adobe announced that it entered into a definitive agreement to acquire privately held Efficient Frontier.
In December 2012, Adobe opened a new 280,000 square foot corporate campus in Lehi, Utah.
In 2013, Adobe Systems endured a major security breach. Vast portions of the source code for the company's software were stolen and posted online and over 150 million records of Adobe's customers have been made readily available for download. In 2012, about 40 million sets of payment card information were compromised by a hack of Adobe.
A class-action lawsuit alleging that the company suppressed employee compensation was filed against Adobe, and three other Silicon Valley-based companies in a California federal district court in 2013. In May 2014, it was revealed the four companies, Adobe, Apple, Google, and Intel had reached agreement with the plaintiffs, 64,000 employees of the four companies, to pay a sum of $324.5 million to settle the suit.
Since 1995, Fortune has ranked Adobe as an outstanding place to work. Adobe was rated the 5th best U.S. company to work for in 2003, 6th in 2004, 31st in 2007, 40th in 2008, 11th in 2009, 42nd in 2010, 65th in 2011, 41st in 2012, and 83rd in 2013. In 2015, Adobe Systems India was ranked 21st of great places to work in India. In June 2014, it was ranked 6th of great places to work in India., In October 2008, Adobe Systems Canada Inc. was named one of "Canada's Top 100 Employers" by Mediacorp Canada Inc., and was featured in Maclean's newsmagazine.
Adobe has been criticized for its pricing practices, with retail prices being up to twice as much in non-US countries. As pointed out by many, it is significantly cheaper to pay for a return airfare ticket to the United States and purchase one particular collection of Adobe's software there than to buy it locally in Australia.
After Adobe revealed the pricing for the Creative Suite 3 Master Collection, which was £1,000 higher for European customers, a petition to protest over "unfair pricing" was published and signed by 10,000 users. In June 2009, Adobe further increased its prices in the UK by 10% in spite of weakening of the pound against the dollar, and UK users are not allowed to buy from the US store.
Adobe ranked no. 5 on a list of Internet’s 9 Most Hated Companies, based on a 2013 survey on Reddit.com. Adobe's Reader and Flash were listed on The 10 most hated programs of all time on TechRadar.com.
Hackers have exploited vulnerabilities in Adobe programs, such as Adobe Reader, to gain unauthorized access to computers. Adobe's Flash Player has also been criticized for, among other things, suffering from performance, memory usage and security problems (see criticism of Flash Player). A report by security researchers from Kaspersky Lab criticized Adobe for producing the products having top 10 security vulnerabilities.
Observers noted that Adobe was spying on its customers by including spyware in the Creative Suite 3 software and quietly sending user data to a firm named Omniture. When users became aware, Adobe explained what the suspicious software did and admitted that they: "could and should do a better job taking security concerns into account". When a security flaw was later discovered in Photoshop CS5, Adobe sparked outrage by saying it would leave the flaw unpatched, so anyone who wanted to use the software securely would have to pay for an upgrade. Following a fierce backlash Adobe decided to provide the software patch.
Adobe has been criticized for pushing unwanted software including third-party browser toolbars and free virus scanners, usually as part of the Flash update process, and for pushing a third-party scareware program designed to scare users into paying for unneeded system repairs.
Customer data breach
On October 3, 2013, the company initially revealed that 2.9 million customers' sensitive and personal data was stolen in security breach which included encrypted credit card information. Adobe later admitted that 38 million active users have been affected and the attackers obtained access to their IDs and encrypted passwords, as well as to many inactive Adobe accounts. The company did not make it clear if all the personal information was encrypted, such as email addresses and physical addresses, though data privacy laws in 44 states require this information to be encrypted.
A 3.8 GB file stolen from Adobe and containing 152 million usernames, reversibly encrypted passwords and unencrypted password hints was posted on AnonNews.org. LastPass, a password security firm, said that Adobe failed to use best practices for securing the passwords and has not salted them. Another security firm, Sophos, showed that Adobe used a weak encryption method permitting the recovery of a lot of information with very little effort. According to an IT expert Simon Bain, Adobe has failed its customers and ‘should hang their heads in shame’.
Many of the credit cards were tied to the Creative Cloud software-by-subscription service. Adobe offered its affected US customers a free membership in a credit monitoring service, but no similar arrangements have been made for non-US customers. When a data breach occurs in the US, penalties depend on the state where the victim resides, not where the company is based.
After stealing the customers' data, cyber-thieves also accessed Adobe's source code repository, likely in mid-August 2013. Because hackers acquired copies of the source code of Adobe proprietary products, they could find and exploit any potential weaknesses in its security, computer experts warned. Security researcher Alex Holden, chief information security officer of Hold Security, characterized this Adobe breach, which affected Acrobat, ColdFusion and numerous other applications, as "one of the worst in US history". Adobe also announced that hackers stole parts of the source code of Photoshop, which according to commentators could allow programmers to copy its engineering techniques and would make it easier to pirate Adobe's expensive products.
Published on a server of a Russian-speaking hacker group, the "disclosure of encryption algorithms, other security schemes, and software vulnerabilities can be used to bypass protections for individual and corporate data" and may have opened the gateway to new generation zero-day attacks. Hackers already used ColdFusion exploits to make off with usernames and encrypted passwords of PR Newswire's customers, which has been tied to the Adobe security breach. They also used a ColdFusion exploit to breach Washington state court and expose up to 160,000 Social Security numbers.
Adobe acquired Aldus Corp. in 1994, a software vendor that sold FreeHand, a competing product. Freehand was direct competition to Adobe Illustrator, Adobe's flagship vector-graphics editor. The Federal Trade Commission intervened and forced Adobe to sell FreeHand back to Altsys, and also banned Adobe from buying back FreeHand or any similar program for the next 10 years (1994-2004). Altsys was then bought by Macromedia, which released versions 5 to 11. When Adobe acquired Macromedia in December 2005, it stalled development of Freehand in 2007, effectively rendering it obsolete. With FreeHand and Illustrator, Adobe controlled the only two products that compete in the professional illustration program market for Macintosh operating systems.
In 2011, a group of 5,000 Freehand graphic designers convened under the banner Free Freehand, and filed a civil antitrust complaint in the US District Court for the Northern District of California against Adobe. The suit alleged that Adobe has violated federal and state antitrust laws by abusing its dominant position in the professional vector graphic illustration software market and that Adobe has engaged in a series of exclusionary and anti-competitive acts and strategies designed to kill FreeHand, the dominant competitor to Adobe’s Illustrator software product, instead of competing on the basis of product merit according to the principals of free market capitalism. Adobe had no response to the claims and the lawsuit was eventually settled. The FreeHand community believes Adobe should release the product to an open-source community if it cannot update it internally.
As of 2010, on its FreeHand product page Adobe stated "While we recognize FreeHand has a loyal customer base, we encourage users to migrate to the new Adobe Illustrator CS4 software which supports both PowerPC and Intel-based Macs and Microsoft Windows XP and Windows Vista." As of 2016, the Freehand page no longer exists and simply redirects to the Illustrator page. Adobe's software FTP server still contains a directory for FreeHand, but it is empty.
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