(Nasdaq: MACR) is recreating itself into a major provider of tools specifically
targeted for the development of E-commerce software and systems. Besides its
best known products, Shockwave and Flash, Macromedia develops software for Web
publishing and Web learning. Other Macromedia products include its Dreamweaver
authoring software and an E-commerce construction kit called Drumbeat 2000.
It has now embarked on a strategic plan - "the Ebusiness Infrastructure" --
to become a one-stop provider of tools needed to develop leading-edge E-commerce
announcements include the following:
Announcement of Project Whirlwind, a complete site production
platform enabling the management, verification and deployment of website
content. Project Whirlwind is based on technology from StarBase, a vendor
of software configuration management systems.
markets were impacted by these announcements. Macromedia comes into this transformation
with an impressive set of credentials. Rated number 20 on PC Week's October
19,1999 list of "100 Technology Companies That Are Changing The World", its
Dreamweaver 2 is the leading advanced site design tool (used by 66 percent of
professional site developers according to Forbes), and its Drumbeat 2000 generally
exceeds the capabilities of Microsoft's clumsy Visual InterDev 6.0 for creating
database-driven Web sites.
Andromedia's personalization tools for $275 million in Macromedia stock, just
before Andromedia was set to complete its initial stock offering estimated to
net the company $48 million, makes strong statements about Macromedia's vision.
It's not quite accurate to paraphrase Mark Twain by saying that "everybody talks
about personalization, but nobody does anything about it." However, personalization
has been an add-on, frequently handled by websites on an ad hoc basis. Making
it part of the basic suite of site creation capabilities will make personalization
much more routinely available.
although it was not generally noted by the early press reports, we believe that
Project Whirlwind is the sleeper in these announcements. Content management
is a problem faced by all web sites. An elegant solution to this nearly intractable
problem would be like the proverbial better mousetrap. Macromedia has announced
that its eBusiness Infrastructure will integrate with Vignette, a vendor of
software that delivers personalized Web experiences and of enterprise-wide content
management solutions. In the long run, this is a bonanza for Vignette, because
it creates an entry for companies who new recognize the need for content management
on their Web sites and who will soon be clamoring for it throughout the rest
of the enterprise.
In many ways, Macromedia is striking out at two industry giants: Microsoft and
Adobe. With its $48 million in revenues Macromedia will not dethrone Microsoft's
preeminent position as a provider of Web tools, but it promises to offer a capability
for building high-end Web sites, suitable for mid-size and large companies,
that is more powerful and better integrated than Microsoft's offerings. This
is a customer base that leans toward Unix servers and therefore away from Microsoft's
development tools, and Microsoft, by emphasizing ease-of-use and software wizards,
seems to be somewhat more interested in the smaller companies. But Microsoft
is also interested in larger enterprises and can be expected to move swiftly
to challenge Macromedia in this arena.
Adobe's products like PhotoShop are not directly threatened, in comparison with
Macromedia it now clearly looks like a provider of individual tools, as opposed
to a provider of solutions. In the PC Week company listing Adobe placed 19th,
just ahead of Macromedia; it may not have known that someone was nipping at
its heels, but now it may well be tasting dust. Adobe has recently launched
a $5-$10 million image building ad campaign, largely based at younger Web professionals
without prior design experience. There were rumors last week that Macromedia
was about to merge with Adobe. That seems not to be in the cards just yet, but
it would be a logical step for both companies, creating a single source for
the full kit of tools needed to build best of breed E-commerce sites.
problem with product suites is that they can be difficult to use, unless developers
have good access to first-rate support. Microsoft's SiteServer packages make
a good example. They boast a rich feature set but lack sufficient documentation
to allow the user to work with them smoothly. In additional, developers encounter
annoying problems between different applications in the suite. When Macromedia
attracts developers with its new suite, as it will, it will need to cement the
relationship in order to keep them. Even more important than additional (but
essentially marginal) bells and whistles will be a solid support organization.
Almost everyone does 90 percent of what is necessary - on-line documentation,
forums, and megabytes of examples on the CD-ROM. But it is the additional 10
percent that developers need, and that is largely to be found in an educated,
responsive, and creative support staff. If Macromedia builds the best of breed
here they will create an intensely loyal following and become the absolute first
choice for E-commerce development.
addition to the capabilities provided by Andromedia, it would be valuable to
provide direct support for ad serving. It would be a mistake to be tied to only
one ad model or vendor, but the tagging concepts are similar enough between
vendors (See TEC Technology Research Note: "How
to Serve an Ad" October 23rd, 1999)that support mechanisms would be
possible. Since personalization and ad serving are becoming more and more intertwined,
this would be a significant benefit to the developer.
planning to enter the E-commerce website arena or looking to major upgrades
of their technologies should place Macromedia near the top of their evaluation
list. Given the popularity and quality of its products, it would be safe to
evaluate them as if they had already delivered on the promises of the Ebusiness
Infrastructure strategy, because the worst possible result still leaves the
user with a collection of excellent tools. Of course, users should certainly
make sure that future promises are included as part of current contracts.