Taken in freeze frame, the graphics software market appears to fall into a fairly neat division between four key players.
Well established in Mac-based offices, Quark continues to dominate the print layout market. Having muscled into educational institutions early on, Adobe's Illustrator and Photoshop products are well established and complement Quark's offerings. With its Flash offerings, Macromedia has cleverly cornered the online design market, while Corel continues to defend its position in the PC-based design space, having emerged from a difficult period with a new management team prepared to take on whole new markets.
But the big players shouldn't get too comfortable, as pricing pressures and the changing requirements of industry threaten to force a reshuffle.
It's all in the delivery
Clearly the biggest shift facing graphics software vendors is how to establish a place within the increasingly important and amorphous market of multiple creative platforms, as well as multiple output means and devices. Traditionally, the design market was dominated by Mac-based platforms where Adobe and Quark have long held sway. However, according to Adrian Bruch, manager of the Ideas Incubator at the Royal Melbourne Institute of Technology, graphics software vendors can no longer depend on hardware restrictions to ensure their market base. "Increasingly the emphasis is on software which enables you to do as many things as possible, and reach as many people as possible," Bruch says. "I suspect print is dead, or at least going through a different phase." Citing the increasing importance of packages such as Adobe's Acrobat for Internet-based document delivery, Bruch is sceptical as to Quark's ability to weather the storm. While Quark remains dominant in high-level publishing, Adobe's InDesign is becoming an increasingly active player in this market. Craig Tegel, managing director of Adobe for the Pacific and South-East Asia, points to recent successes in publishing houses such as Australian Consolidated Press, which holds about 60 percent of the Australian magazine market, as proof of the company's growing presence in the area. "We are also seeing a lot more advertising agencies switch to Adobe products like InDesign and Illustrator," Tegel says. "That represents another market, aside from publishing, which we would like to develop." The real winners of the online graphic software race appear to be Macromedia, having firmly established its presence with Internet-based interactive design tools. "Macromedia have a fantastic product in Flash," Bruch says. "Because they use algorithms rather than pixels to store the graphics information, you can create highly detailed images in much smaller files, and it can print perfectly even if you change the size." Having established itself firmly in the Internet-based graphics design market, Macromedia plans to solidify its position by increasing the levels of functionality offered through its products. John Treloar, Australia / New Zealand territory manager for Macromedia, says the company is aiming to take its products beyond passive browsing, providing designers with more control over the interactive features open to Web design. "We are moving beyond the creation of static pages, into an interactive world where people want to be able to do everything on the one screen," Treloar says. "The strength of our products is that designers are able to use them to create such environments." Treloar believes Macromedia's approach to online design will allow the company to continue its domination of the market. "There are products which compete with Flash, but they are marginalised within the other software vendors companies -- they are not seen as core products by the vendors themselves," Treloar said. However, Adobe isn't exactly sitting on its digital-imaging laurels, and is fixing a firm gaze towards the online publishing market. According to Adobe's Tegel, the company's recently released Web collection features XLM-based updating functionality, and aims to increase the software's capacity to deliver across multiple platforms. "Now when using InDesign in conjunction with GoLive, you can use XML as the basis to link directly with the Web site you are working on, so that any changes made in InDesign can be automatically uploaded," Tegel said. While such Web-based offerings have yet to challenge Macromedia's dominance in this space, Adobe's major online coup has been Acrobat's cornering of the online document delivery market. Tegel says Adobe has expanded its presence in this market through strategic relationships with government and corporate groups. "We are seeing more and more people wanting solutions where people can gain access to, approve, proof or modify documents before they even get printed up," Tegel says. "Our customers are using PDFs to improve their work flow." For Adobe, one major coup was that of making PDFs core to the Australian Federal Government's eGovernment policies, which have made a vast array of government publications, forms and documents available online. Meanwhile at the OK Corel
Just 12 months ago, Corel looked like it was on the verge of sinking beneath a series of poorly timed commercial decisions and accounting oversights. However, a major company restructure in 2001 saw Derek Burney, now president and chief executive of Corel, slash costs and refocus business direction in three specific areas: home and small business, professional creative artists, and the enterprise. Not only is the new Corel eyeing the high end graphics market traditionally dominated by Adobe, its focus on multiple platforms, and multiple output modes may even see it competing with Microsoft's .Net. Corel aims to achieve this through open standards-based cross-media publishing solutions, using codes such as XML. At the same time, the company appears to have abandoned a flirtation with Linux in favour of spending more time developing its products to fit more closely with Macs. Signalling this change will be played out on multiple levels, Teresa Howe, director of home and small business products at Corel's home base in Canada, places a significant emphasis on the role partners will play in evangelising the company's new approach. "We are looking to extend out professional reach and better attack the academic markets, as well as the home and small business space," Howe said. "Unlike our competitors in this space, we are offering all the tools they might need in one package." While conceding that Corel's PC legacy and failure to establish a presence within educational markets placed it on the back foot, Dr David Much, vice-president of Corel's Down Under User Group, believes it will win out in an increasingly price-competitive market. "A lot of the smaller design houses see the crack down on software licensing, and are worried," Much says. "When they realise they can have a complete suite of Corel tools on every machine in the office for the price of licensing Adobe Illustrator and its plug ins, they are going to start looking seriously at alternatives." Pricing's the key
In fact, a glance at the retail results in the Australian market appears to indicate these larger players are indeed in danger of having their position usurped by more limited offerings. According to figures from research group Inform, software packages which provide home users access to simple photo editing suites, such as Eureka and Activision, are winning the sales race in this sector. What's more, some pundits are predicting that a commercial market increasingly focused on return on investment may also shift towards the less expensive offerings. "I think Quark is in trouble. It will have to do a major price strategy revision if it is going to maintain its niche in the high-level publishing space," Bruch says. However, he also points out that graphics software vendors are stuck between conflicting mandates to reduce prices and a need to continue to foster development. "If they don't make the sales, because they lack the functionality or because they are too expensive, they won't get the revenue to keep on going," Bruch says, predicting the price squeeze may in fact lead to a period of consolidation in the graphics software market.