For Macromedia, the Future Belongs to Non-PCs

How Macromedia has been able to create a impact ............

You're right about it making a huge impact..... When I came down here from Toronto in about 1996 or 1997, it seemed like half of the people in Silicon Valley [had] a personal experience with Macromedia. And if you look at our background over the last 10 years, you can see why.

In the early days, Macromedia had most of the main brands for creating better experiences on CD-ROM. So we're sort of a founder, if you will, of the multimedia industry - which touched a lot of people's lives. All of a sudden you could do pictures and sounds and words on computers, and mix them together. And they made very powerful experiences. Betsey and I joined Macromedia just as the CD-ROM industry was peaking out. And we started investing very heavily in the Internet. Products like Flash and Dreamweaver - and other brands - played a leading role in enabling people to make better experiences on the Internet.

There are examples in almost every market. A good example is hotel reservation systems. In the past, when people were looking at just HTML, they would see screen after screen after screen - basically playing 20 questions. And at the end of the process - all of a sudden - they would get a message that said, in effect, "I'm sorry, but we don't have a room available for you." This is very different than having an experience that's like a desktop experience, where you are interacting with the screen. It's a much more cognitive experience. So Macromedia played a leading role in CD-ROMs and the Internet. And now we see a huge new trend happening in which we're very involved - which is making products for "non-PCs." A lot of people are calling that the "mobile" market - including us - but it's so much more than mobile. It involves TV sets and DVDs and game machines and educational toys - as well as phones and PDAs.

The content ecosystem that is developing in Japan around Flash is absolutely phenomenal. There are several thousand web sites now supplying Flash content, and it's simply because, as human beings, we're multi-sensory creatures. To the extent you get more senses into the game, people like [it] more - cognition happens more quickly. So now, on the trains, it used to be that people would be banging away on e-mail. Now they're banging away on games. It's phenomenal.

Is Japan a major market for you?

No, Japan is the earliest business opportunity for mobile. The phones are more powerful there, and the networks are more powerful. DoCoMo was the first major mobile operator to make Flash part of its strategy. They had Java in their phones, and then they decided to differentiate with Flash. Since then we've signed up more than a hundred partners. KDDI is the second service in Japan, and they've now launched with Flash. T-Mobile in Europe has launched a mobile news and information service based on Flash. So it's starting to come across the globe. And in a few years North America will be operating as well.

Strategies adopted for consumer satisfaction

Yes. For the first decade of our existence, we supplied leading tools for designers and developers to create these [rich] experiences. And now we are broadening how we enable better experiences to both business users and consumers. And that's our growth strategy for the future.

Similarly, Contribute leverages Dreamweaver, and that's for non-technical users. And for the mobile world - that's all about the Flash Player. So, we are leveraging existing assets into much broader markets. The size of markets in financial terms?

We've grown the designer/developer to be a $300 million business in the last seven years. When we got here it was about $100 million a year and now it's nearly $100 million a quarter. We have almost quadrupled the size of the business over that period of time - but mostly in the designer/developer market.

When I look at the consumer market as an example, there are about a billion and a half phones out there today. Maybe 20 million of them have Flash - or any kind of sophisticated multimedia capability. In five years, there will likely be 5 billion phones out there - and most of them will be multimedia. So I feel like we're at the very beginning stage of that market. Over five years, Macromedia could have an opportunity to have businesses in consumers and business users that are at least as large as the designer/developer business is for us now.