Photoshop’s ‘Acrobat’ic Leap

Adobe with its Photoshop, Acrobat, Pagemaker and other software is the numero uno in print, online and video today. But is it making its channel happy?

 If there is one knee-jerk moment for all the principals in India, it is when a competitor comes up with something new. However, the situation may not be the same inside the board room of Adobe India. With no big competitors in the market, and a stronghold in the minds of the customers, Adobe is marching ahead and doubling the numbers every financial year.

"The journey of Adobe in India has been exciting and I am glad to be a part of that journey since 1994 onwards when we first initiated discussion with their first distributor, Wipro, even though we used to sell Adobe and erstwhile Macromedia products bundled with the multimedia kits that we were selling in the country since 1992. We are glad that even after 18 plus years we continue to sell and promote Adobe, which is still contributing over 80% to our revenue," says Harinder Salwan, MD, Tricom Multimedia. However, he says, "The margins in business have moved more from front-end to back-end as the new breed of partners are more interested in achieving targets and meeting numbers at the cost of discounting the product prices and directly affecting the product positioning. Days of commanding the premium on Adobe has nearly vanished though I am proud to state that we have managed to maintain healthy margins on the front-end primarily due to our knowledge of the products and the technology and the support being provided to the customers."

According to some channel partners from the West, "The focus of Adobe over the years has shifted to promoting the suites which are a cost-effective solution, but then even today we find products which are no longer being supported by Adobe, having a huge following viz Pagemaker, freehand, but then the products like InDesign are being pushed in suites and not individually, and we still find more users continuing to use QuarkXpress and Corel for page layouts." The partners are also expecting some amount of shift to happen, provided the partners can promote them more aggressively in an individual manner, as that would help in increasing the desktops as well as the revenue to the company. Acrobat and Photoshop are the two flagship products of Adobe, but then we expect some price rationalization. The recent experiment done for the Photographers Association has also shown results which has helped Adobe to taste a bit of success though they only managed to scrape the surface partly with that effort. We are expecting some more efforts on that front to happen."

PIRACY VERSUS DEVELOPMENT
Piracy is there in every software in the country. According to the channel sources, in India, piracy in Adobe is 90%, primarily due to high pricing of the products and the multiplicity of taxes, which make the products approximately 25-35% expensive in India. "The revenue of Adobe today as per my personal opinion is close to 50% of every quarter coming from anti-piracy, and 50% coming in from business development and or new customers," says one channel partner. This shows how serious the revenue loss for Adobe is in the country and also how big the market is out there for Adobe to grow with excellent products. If they come out with attractive pricing, sky is the limit for this vendor.
Adobe is numero uno in the verticals of print, online, and video today, with their products touching lives of all individuals, be it a student, designer, business executive, business owner, or anyone using it, but barely a handful of them own them in reality. The channel partners are also happy that Adobe now has special pricing for students/teachers, which was missing since many years, and is now available for a couple of versions. Partners are finding success happening in the area, with discounted prices for education and special pricing for the corporate under the contract program. Adobe recently introduced Enterprise agreements for large MNCs.
A channel partner from South said, "I have known Adobe as a channel-driven company over the last 18 years. With the growing volume of business, I have seen the team grow from one person to 50 plus direct employees and over 50 plus indirect employees via agencies and call centers now. The channel team is getting reduced and there is a more direct product-specific or vertical-market-specific team, where there is more of interaction between Adobe and customer, and the channel steps in for fulfillment. This is one area of concern."

ON THE DARK SIDE
On the other side, Adobe also has some negative feedbacks from few partners. According to a channel partner who does not wish to be named, "Adobe now has more than 70% new partners. Last year, there were issues when some new partners were not accommodated. Taking along partners who are old is not the solution, as we will continue to do this business our way and not how it is shown by the new breed of executive who have taken control of the business without knowing the ground realities," he said. "Adobe has grown from 12 partners in 1997 to 120 partners in the last 15 years, a tenfold increase. The revenues have not increased that much, and hence there are pressures on the team to perform. The new team at Adobe, which has over 90% new faces, is using all business gimmicks to reach the revenue targets, when the products are being discounted by over 30% just to close orders," he said. "So there are process issues with the old partners and hence over the last few quarters, quite a few old partners have watched the developments," he further added. Partners also commented on the ‘winner' category of awards organized by Adobe.

ADOBE'S PROMISES
During the recent partner summit held in Goa, Adobe announced three promises for channel partners. Addressing the partners during the event, quoting the examples from various sequences of the movie ‘Money Ball', Umang Bedi, MD, South Asia, Adobe Systems India said, "We are hungry to grow big and we need more partners as a part of our journey. At the same time we also wish to take our existing partners to the next level. With you all, Adobe has been growing at the rate of 2-3%. Even in FY13, through our channel partner program APC, we will continue to reward the commitment of the channel partners." He also said, "For any innovative business plan, Adobe is ready to support partners in all aspects like people, marketing, resources, training and so on. The Indian team of Adobe will have personal commitments even in terms of physical presence and we will help the partners close the most strategic deals."

Bedi also requested the partners to get specialized over a particular vertical. "Be it sector-wise specialization like education, publishing, animation, or region-wise specialization like East-SMB, my request to partners is to get specialized in one domain," Bedi said. Speaking on the current strength of the partners in the country, he said, "We have 8 Platinum partners, 24 Gold partners, 75 certified partners and 150 registered partners, out of which more than 100 are new partners added this year."

He further added that there is going to be more focus on print media as the vernacular language newspapers are seen as a good opportunity. "Adobe has increased its presence in top 10 cities recently which was only 4 till last year. Increasing our presence means increasing the channel presence and our team in these regions," he said further, concluding that Adobe is also planning to focus more on business in tier-2 cities.

Top three things that make Adobe partners happy:
Updating the channel on new products and technologies
Providing tools to the channel to get familiar with the tools they sell
Sharing of leads with the channel for new business opportunities that are being developed by their team

Three things Adobe needs to do
Ensure pricing is uniform across the channel rather than having different level of partners
Partners should be rewarded in KIND rather than discounts on pricing as that will help in reducing price discounting
Surprise the top performing partners who achieve numbers so that they do not know what back-end they have and play a fair pricing in the market

 

Top positives of being an Adobe partner
Work with a fortune 500 company
Work with leading products in the area
Work with the latest team of people who are setting trends in the industry

Top challenges in selling Adobe products
Discount of over 25% by some partners which is happening over different segments and regions
High pricing due to multiple taxation; the company should come out with India-specific pricing
Active solution selling for each product technology on its merit, rather than selling suite and pushing a product the customer does not really need.