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Adobe Acrobat:
    Creating a Billion
    Dollar Product
    Sarah Rosenbaum
    Director of Product Management
    July 12, 2006




                                                        1
2006 Adobe Systems Incorporated. All Rights Reserved.
Products Begin as Ideas


                                                            Ideas can take a while to reach
                                                            market
                                                            Acrobat history:
                                                               “Camelot” idea paper published in
                                                               1991 by John Warnock
                                                               Version 1.0 shipped in 1993

                                                            What’s your window of
                                                            opportunity?




                                                        2
2006 Adobe Systems Incorporated. All Rights Reserved.
Understand and Evaluate Business Dynamics: Packaging

                                                        Packaging
                                                          Make it easy for customers to
                                                          understand and purchase
                                                          Separate components or bundled?
                                                          Where is the market maturity?




                                                                        1996


                        1993                                                                2003


                                                                         3
2006 Adobe Systems Incorporated. All Rights Reserved.
Understand and Evaluate Business Dynamics: Pricing

       Business model: per unit, volume licensing, subscription, etc.
       Integrator, end-user, other
       Revenue mix you’re targeting
       Competitive landscape




                                                        4
2006 Adobe Systems Incorporated. All Rights Reserved.
Understand and Evaluate Business Dynamics: Placement

       What channels are most available and appropriate?
       2-Tier distribution, Direct sales force
       Value Added Reseller (VAR)
       Systems Integrator (SI)
       Original Equipment Manufacturer (OEM)




                                                        Distribution



                       Retailers                        Catalogues     VAR



                                                            5
2006 Adobe Systems Incorporated. All Rights Reserved.
Understand and Evaluate Business Dynamics: Promotion

    Brand
    Channels – how/what?
    Word of mouth? Web?
    Direct sales force
    Advertising




                                                        6
2006 Adobe Systems Incorporated. All Rights Reserved.
Understand and Evaluate Technology: Product Definition

         For whom?
         What problem does it solve?
         How critical is the pain?
         Is it usable?




                                                        7
2006 Adobe Systems Incorporated. All Rights Reserved.
Understand and Evaluate Technology: Features

       Transforming: new, major capabilities that transform the uses of the product
       Tuning: improving functionality that already exists




                                                            Digital Signatures                       AutoCAD, MS Visio,
                                                                                                     MS Project
                                   WWW integration MS Office integration                             integration
                                   Print-publishing         Web Capture pages                        Prepress features
                                   capabilities
                                                            Enhanced commenting                      Layers
                                   Fillable forms           tools
                                                                                                     Take comments back
                                   Paper Capture            Additional Print-    eBooks support      to Word
Plug-in arch.                                               publishing
                 Native Japanese                                                 R & C workflow       Enhanced security
Full-text search support                                    New UI               creation, monitoring

Acrobat 2.0                                   Acrobat 3.0        Acrobat 4.0           Acrobat 5.0        Acrobat 6.0



                                                                         8
2006 Adobe Systems Incorporated. All Rights Reserved.
Understand and Evaluate Technology: Market Changes

       Birth of World Wide Web and Acrobat 3
       Applications of your technology –
          Did you foresee them?
          What can you do to improve them?




                                                        9
2006 Adobe Systems Incorporated. All Rights Reserved.
Understand and Evaluate Technology: Build, Buy, or Both?

    NIH syndrome – where is your engineering group?
    Quickest path to execution – can you tolerate the cost of licensing other
    technology?
    Is the technology so fundamental that you MUST own it?

                     Built                                 Licensed                 Bought

       Web Capture
       Sticky notes
                                                        Encryption libraries
       Microsoft Office
       integration                                      Search engines          Enhanced commenting
                                                        Fonts                   capabilities
       AutoCAD
       integration                                      Prepress capabilities   OCR engine



                                                                 10
2006 Adobe Systems Incorporated. All Rights Reserved.
Considerations – it’s a Balancing Act

Internal Drivers
   Revenue achievement and timing
       Personalities
       Available resources
       Company direction
       Organizational changes                                External Drivers
       Gross margin achievement                                Competitive landscape
       Customer demands                                        Competitors’ actions
                                                               Customer demands
                                                               Channel partners
                                                               Technology developments
                                                               Analyst/Press reviews


                                                        11
2006 Adobe Systems Incorporated. All Rights Reserved.
Acrobat Revenue and Release History


   $500,000

   $400,000

   $300,000

   $200,000

   $100,000

                    $0
                         1993             1994          1995     1996   1997        1998     1999    2000     2001    2002     2003


                    Acrobat 1.0                                Acrobat 3.0                                  Acrobat 5.0


                                   Acrobat 2.0                                             Acrobat 4.0                       Acrobat 6.0


Note: Revenue numbers are approximate and not exact
                                                                               12
2006 Adobe Systems Incorporated. All Rights Reserved.
What Product Management Can Do

       Know your competition
                Monitor their actions, announcements, press/analyst coverage
                Complete regular SWOT analyses
                        Include all functions of the company who contribute to your product

       Talk to customers
       Talk to potential customers – they’re your growth opportunity
       Research the market developments and changes
       Research and understand technology developments and trends
       Read, search, attend appropriate conferences and meetings
       Maintain a holistic view of the business
                Don’t limit yourself to your authority area; get to know all aspects

       Don’t be afraid to try and fail and change what you’re doing. Nothing is exactly right
       the first time.



                                                                  13
2006 Adobe Systems Incorporated. All Rights Reserved.
14
2006 Adobe Systems Incorporated. All Rights Reserved.

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How PM Helped Build a Billion Dollar Business

  • 1. Adobe Acrobat: Creating a Billion Dollar Product Sarah Rosenbaum Director of Product Management July 12, 2006 1 2006 Adobe Systems Incorporated. All Rights Reserved.
  • 2. Products Begin as Ideas Ideas can take a while to reach market Acrobat history: “Camelot” idea paper published in 1991 by John Warnock Version 1.0 shipped in 1993 What’s your window of opportunity? 2 2006 Adobe Systems Incorporated. All Rights Reserved.
  • 3. Understand and Evaluate Business Dynamics: Packaging Packaging Make it easy for customers to understand and purchase Separate components or bundled? Where is the market maturity? 1996 1993 2003 3 2006 Adobe Systems Incorporated. All Rights Reserved.
  • 4. Understand and Evaluate Business Dynamics: Pricing Business model: per unit, volume licensing, subscription, etc. Integrator, end-user, other Revenue mix you’re targeting Competitive landscape 4 2006 Adobe Systems Incorporated. All Rights Reserved.
  • 5. Understand and Evaluate Business Dynamics: Placement What channels are most available and appropriate? 2-Tier distribution, Direct sales force Value Added Reseller (VAR) Systems Integrator (SI) Original Equipment Manufacturer (OEM) Distribution Retailers Catalogues VAR 5 2006 Adobe Systems Incorporated. All Rights Reserved.
  • 6. Understand and Evaluate Business Dynamics: Promotion Brand Channels – how/what? Word of mouth? Web? Direct sales force Advertising 6 2006 Adobe Systems Incorporated. All Rights Reserved.
  • 7. Understand and Evaluate Technology: Product Definition For whom? What problem does it solve? How critical is the pain? Is it usable? 7 2006 Adobe Systems Incorporated. All Rights Reserved.
  • 8. Understand and Evaluate Technology: Features Transforming: new, major capabilities that transform the uses of the product Tuning: improving functionality that already exists Digital Signatures AutoCAD, MS Visio, MS Project WWW integration MS Office integration integration Print-publishing Web Capture pages Prepress features capabilities Enhanced commenting Layers Fillable forms tools Take comments back Paper Capture Additional Print- eBooks support to Word Plug-in arch. publishing Native Japanese R & C workflow Enhanced security Full-text search support New UI creation, monitoring Acrobat 2.0 Acrobat 3.0 Acrobat 4.0 Acrobat 5.0 Acrobat 6.0 8 2006 Adobe Systems Incorporated. All Rights Reserved.
  • 9. Understand and Evaluate Technology: Market Changes Birth of World Wide Web and Acrobat 3 Applications of your technology – Did you foresee them? What can you do to improve them? 9 2006 Adobe Systems Incorporated. All Rights Reserved.
  • 10. Understand and Evaluate Technology: Build, Buy, or Both? NIH syndrome – where is your engineering group? Quickest path to execution – can you tolerate the cost of licensing other technology? Is the technology so fundamental that you MUST own it? Built Licensed Bought Web Capture Sticky notes Encryption libraries Microsoft Office integration Search engines Enhanced commenting Fonts capabilities AutoCAD integration Prepress capabilities OCR engine 10 2006 Adobe Systems Incorporated. All Rights Reserved.
  • 11. Considerations – it’s a Balancing Act Internal Drivers Revenue achievement and timing Personalities Available resources Company direction Organizational changes External Drivers Gross margin achievement Competitive landscape Customer demands Competitors’ actions Customer demands Channel partners Technology developments Analyst/Press reviews 11 2006 Adobe Systems Incorporated. All Rights Reserved.
  • 12. Acrobat Revenue and Release History $500,000 $400,000 $300,000 $200,000 $100,000 $0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Acrobat 1.0 Acrobat 3.0 Acrobat 5.0 Acrobat 2.0 Acrobat 4.0 Acrobat 6.0 Note: Revenue numbers are approximate and not exact 12 2006 Adobe Systems Incorporated. All Rights Reserved.
  • 13. What Product Management Can Do Know your competition Monitor their actions, announcements, press/analyst coverage Complete regular SWOT analyses Include all functions of the company who contribute to your product Talk to customers Talk to potential customers – they’re your growth opportunity Research the market developments and changes Research and understand technology developments and trends Read, search, attend appropriate conferences and meetings Maintain a holistic view of the business Don’t limit yourself to your authority area; get to know all aspects Don’t be afraid to try and fail and change what you’re doing. Nothing is exactly right the first time. 13 2006 Adobe Systems Incorporated. All Rights Reserved.
  • 14. 14 2006 Adobe Systems Incorporated. All Rights Reserved.