Aug 8, 2005

Code War Heats Up Between Microsoft and Adobe

Written by Dan Richman

What happens when a smaller software maker enters a collision course with giant Microsoft Corp.? Adobe Systems Inc., a San Jose-based company with a large presence in Fremont, is poised to find out.

Redmond-based Microsoft just announced two products that will compete with offerings from Adobe, and Adobe is about to buy a company with products that challenge Microsoft’s.

After that purchase, Adobe will practically own a rich market: software used by photographers, artists and Web developers to manage photos and graphic images and print them or create Web sites incorporating them.

Microsoft is active in just about every market except that one. And, as always, it’s seeking ways to tweak its slowing revenue growth.

Microsoft says it’s no threat. Some analysts don’t believe that.

“For Microsoft to continue to grow at the rate it wants, it needs to be conquering new markets, and Adobe’s is the biggest, juiciest prize right now,” said Jesse James Garrett, a director at consultancy Adaptive Path.

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