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The Gloves Are Off: Adobe Targets Microsoft's Enterprise Video Market Lead

by: Dan Rayburn August 20, 2008 | about stocks: ADBE / MSFT    
Dan Rayburn

Dan Rayburn

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Historically, Microsoft's (MSFT) Windows Media technologies have always dominated the enterprise market for multiple reasons, the biggest being that the WM Player was bundled into the OS and the server is cheap to deploy. And while I think Microsoft still has the majority share of the enterprise market, Adobe (ADBE) continues to get more aggressive in targeting IT decision makers inside enterprise organizations.

With Adobe making the licensing costs for FMS3 a lot cheaper than they use to be, and the fact that live Flash is now considered stable in FMS3, I am beginning to hear from more enterprise customers who are now evaluating Flash.

Previously, a year or so ago, I saw very few enterprise companies willing to even consider Flash for streaming inside their Intranet. And while Adobe has a long way to go before it displaces Windows Media anytime soon with the Fortune 500, it's a clear sign that Adobe is trying to hit Microsoft where it hurts. The enterprise market has always been one that Microsoft has dominated and that other video formats have not tried to penetrate since RealNetworks (RNWK) stopped getting the majority of their revenue from server licenses almost seven years ago.

Another sign of this push by Adobe is the number of articles I see about video in the enterprise that quote Adobe or talk about Flash (see: Streaming Media In The Enterprise). In the past, you rarely saw Adobe talking about the enterprise market or saw them quoted in enterprise focused editorial coverage. Seems that is starting to change.

While most people always talk about Adobe and Microsoft going head to head for all online video, I don't think they really do. Microsoft has always been the winner for video that was live, needed to be downloaded, played on devices or needed DRM. And Adobe has always been the winner for video that was used for advertising, media and entertainment content, true cross platform for Mac users and content that require embedding and custom design. The new version of FMS3 is getting some traction to challenge Microsoft for live content and Microsoft is trying to challenge Adobe in other areas with Silverlight.

But Adobe starting to go after enterprise video is new and shows signs that they are really taking the gloves off. It's too early to know if Adobe can displace or eat into Microsoft's share of the enterprise market, but it's something to keep a close eye on.

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This article has 3 comments:

  •  
    Aug 20 07:31 AM
    looks like Microsoft is loosing some market share from many angles...
    Reply
  •  
    Sep 02 02:28 AM
    I work for Microsoft and I've to say that our company is extremely interested in video in the enterprise. A year ago we started an internal podcasting initiative called Academy Mobile (video: www.youtube.com/watch?... ).

    We started talking publicly about it and based on customer's feedback, we decided to productize our internal experience.

    At Enterprise 2.0 in June '08 we launched the Podcasting Kit for SharePoint (www.codeplex.com/pks ). It's a free add-on to SharePoint that enables the 'YouTube for Enterprise' scenario.

    If you are interested to learn more about it, we are open to share ideas and best practices on how video is working successfully inside Microsoft. You can also follow me on twitter.com/tosolini
    Reply
  •  
    Sep 05 01:10 PM
    This analysis fails to discuss Silverlight, which is being used widely for prerecorded content, advertising, contnet, and live content (such as the Olympic streaming or the DNC streaming coverage). So Microsoft continues to be the best choice for live content, but it's really ADBE that should worry, as Silverlight provides a more affordable, higher quality streaming option that uses the same technology (visual studio and C#) that IT professionals know and trust. Silverlight includes DRM without extra costs, and doesn't require extra server licenses. I'd expect Flash to loose marketshare to Silverlight, or the growth of Flash will at least be limited.
    Reply
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