Does Office PDF kill the aftermarket?

We have an interesting conversation building in the comments to my previous post about the Adobe vs. Microsoft PDF dust-up that generated a lot of attention last week. Leaving aside the true motivations either party in the brawl might have for this fluid elimination contest, the question came up about whether it is a slam dunk, done deal that third party developers are DOA when Microsoft incorporates a feature previously available only from additional software as is the case here.

I’m of the opinion that there is no predetermined causality. Just because Microsoft adds a feature or capability to Office or Windows does not necessarily mean that third party innovation is destined to reside in a niche or be exterminated. Why? Because Microsoft often produces a weak implementation whether by design or lack of attention.

Responding to a comment from a reader who expressed the opinion that if Microsoft bundled Save As PDF into Office that Acrobat would be fated for the dust bin, I wrote in reply:

Consider something a bit more in line with what we’re discussing here - an add-in to an existing program that competes head-on with a bundled capability. Office has included a Clipboard manager for some time. Frankly, it’s weak. Third-party tools like ClipMate (my personal choice for many years) thrive because the Office Clipboard Manager simply does not get the job done as well.

In similar fashion, Outlook 2007 will include a basic RSS subscription tool. It too is weak and I seriously doubt that many NewsGator or Attensa users will switch from the tool they are currently using.

Microsoft has included some kind of screen capture tool since Windows was first released. That hasn’t prevented TechSmith from building a great and successful company on top of their SnagIt tool.

My own company has had an 11-year uninterrupted run of profitability and growth supplying terminal emulation, remote access, and file transfer tools that blow the doors off what Microsoft bundles. We have sold more than one million licenses in 103 countries.

There are plenty of other examples that support my contention that a small ISV who really understands the needs of the market can create a solid business outdoing what the (usually) basic bundled capabilities provide.

Is there an impact when Microsoft adds capabilities to their products that mirror what is available from other companies? Absolutely. And this is not restricted to one company. Apple does the same thing when they add capability to Mac OS X (witness the Konfabulator situation when Tiger introduced Widgets).  I know the evil monopoly flag wavers will probably come roaring out with their usual hue and cry that this is a different situation but I don’t think it is. In their own ecosystem, Apple seriously damaged the future of a small ISV by building in a similar capability to their OS. Ultimately, this playing field was leveled quickly enough when Yahoo! bought Konfabulator and made it available for free, Microsoft announced that Visat will have Gadgets, and Google added a similar feature to their Desktop product.

That’s another way the market regains equilibrium.

So... to answer the question posed in the title of this post: my answer is a resounding "not necessarily". Acrobat does a lot more than just create PDF files. If Adobe is smart, they will repond by offering the PDF Writer driver for a nominal price or at no charge - something they should have done a long time ago IMO. Then they can better position Acrobat Standard and Pro as what they actually are - editing and authoring tools. If PDF is an open standard then treat it like one. If it's not, have the intestinal fortitude to say so and stop insulting our intelligence with this legal posturing.