XDocs An Adobe Wake-up Call

It seems like ancient history, but it was only a couple years ago when two
browsers — Internet Explorer (IE) and Netscape Communicator — were evenly
matched in the hearts and minds of Web surfers throughout the world.

It’s a cautionary tale for Adobe today, which found out
Microsoft has ideas of its own for XML-based dynamic forms.

It’s all part of the Redmond, Wash.-based giant’s dream for a collaborative
workplace entirely on the net, or .Net, in this case. XDocs,
presented by Steve Ballmer, Microsoft CEO Wednesday, is part of that dream.

And if Adobe isn’t careful, it could find itself in Netscape’s
position: struggling to keep the customers it has while becoming a
marginal player.

XML-based documents allow businesses to forward e-forms throughout the
corporation and make dynamic changes, corrections, edits, you name
it. XDocs is a form aimed directly at knocking Adobe from dominance in
e-documents and replace it with a Microsoft label. Plans are sketchy on
XDoc particulars, outside the fact it will be released as part of some
Office 11 packages.

If investor analyst opinion is any indication, it’s time for Adobe to ramp up their own plans for an XML-based e-document software application,
which has been in the works since earlier this year.

Deutsche Bank Securities rates Adobe shares a “hold,” primarily
concern from the investor community over Microsoft’s latest move. In a
document released to its customers (ironically enough, on an Adobe .pdf
file), Deutsche Bank analysts said:

“XDocs is likely the first of several steps that Microsoft can undertake
to meet its customers needs directly, and this competitive threat could cut
off much of Acrobat’s opportunity in the enterprise.”

Analysts point out Microsoft file formats still have many wrinkles that
need ironing out before putting up a serious fight with Adobe’s .pdf files,
namely inconsistent printing and secure document delivery, though analyst’s
predict Microsoft will sort that out soon enough.

But, despite the concerns, Adobe has been fairly silent about its own
e-documents strategy going forward.

“In February, the company bought up Accelio for $72 million, in a move
giving Adobe access to server-based Web publishing technology. Then, in
June, Adobe hired SAP to develop a platform to run
the Adobe/Accelio hybrid.”

Since then, the company has gone underground, though investor concern
before Microsoft even puts out more information than the fact it has
something in the works, should prompt Adobe officials to announce similar
e-document plans soon.

There’s no reason for panic, yet. This isn’t the first time Microsoft and
Adobe have squared off over electronic file types. When e-books were
gaining popularity in 2000, Microsoft pulled a similar move with its
Microsoft Reader software, in an area dominated by Adobe Reader. Adobe
still holds the edge in e-book market share.

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