Adobe at 40: The past, present, and future of creativity software’s enduring giant

“That was magic.”

Kevin Hart rocks forward in his armchair. The comedian happens to be sitting on a stage at Los Angeles’s Microsoft Theater, where he’s cohosting Max Sneaks, the closing session at Adobe’s annual Adobe Max creativity conference. It’s a cherished ritual in which the company shows off technological works in progress to an audience full of some of its most devoted customers.

What Hart has found magical is Adobe research scientist Jae Shin Yoon’s demo of “Project Motion Mix,” which used AI to make still photos of Yoon and his wife dance Gangnam style—with the moves copied from a video clip of a dancing Santa Claus. It’s not exactly a deepfake: The couple vamps so stiffly that it’s obvious it’s not a real video. Even so, it’s a pretty neat trick.

The word “magic” comes up often enough in conjunction with Adobe that you might momentarily confuse it with Disney. But the fact is that its best work can feel like magic, especially when you see it for the first time. That was even true back in the 1980s with Adobe’s founding product, PostScript, a piece of software that initially did nothing more than produce crisp 300-dpi black-and-white typography on an Apple LaserWriter printer that cost a mere $6,995. Like numerous examples of Adobe magic to come, it went on to become a mundane part of everyday life, which is in itself a testament to the company’s impact on our world.

On December 3, Adobe is marking the 40th anniversary of its founding by John Warnock and the late Chuck Geschke. It’s a milestone that only a few of today’s highest-profile tech companies—such as Apple and Microsoft—have reached. And much of Adobe’s long history is tangibly present in its current business, which is full of products—such as, Photoshop, Illustrator, Acrobat, After Effects, and Premiere Pro—that have been around for longer than a meaningful percentage of the people who use them.

That Adobe has created so many enduringly relevant products is no accident. “We’re a company that likes to look around the corner, a company that likes to invest in deep technology platforms that stand the test of time,” says Shantanu Narayen, who has been Adobe’s CEO for 15 years and will mark his 25th anniversary at the company next January 12. I spoke with him recently in his office at Adobe’s San Jose, California, headquarters, where a new 18-story tower is scheduled to open early next year, doubling available space for employees.

Adobe has been so dominant for so long in so many of the categories in which it competes that it’s easy to forget it was once a scrappy upstart with an uncertain future. In fact, if photocopying kingpin Xerox had been more adept at monetizing the breakthroughs of the brilliant scientists who worked for its PARC research lab, there might never have been an Adobe at all.

Origin story

In the early 1980s, Warnock and Geschke were both at PARC, where they collaborated on advanced printing technologies. It was the most logical possible research area for Xerox to pursue—laser printers themselves had already been invented at PARC by the late Gary Starkweather. But Warnock and Geschke were frustrated with Xerox’s seeming lack of interest in commercializing their work, especially given that other companies were also working on the challenge of creating high-quality printed documents.

“In order to be successful, any idea like this had to get out into the marketplace and had to get out there as quickly as one could get that technology to market,” Geschke explained at a 2002 Computer History Museum event on Adobe’s founding. “And so it became imperative for us to find an environment in which to do that.”

Rather than wait any longer for Xerox to create that environment, Warnock and Geschke left the company to channel their yen into a startup. Its name, Adobe Systems, referenced a creek behind Warnock’s home, which doubled as their headquarters. Warnock’s wife Marva, a designer, created the original Adobe logo, whose blocky “A” lives on today as the company’s logomark.

It did take a while for the budding entrepreneurs to decide precisely what their company should do. At first, they thought it might operate a chain of print shops, or maybe manufacture high-end workstations and printers. Eventually, they decided that Adobe should focus on software—specifically PostScript, which elegantly cracked the code of rendering fonts at any resolution. And the business model really crystallized when they signed a deal with Steve Jobs to build PostScript into Apple’s LaserWriter, a critical piece of equipment for the desktop-publishing revolution that was about to get underway.

Now, the odds are greatly stacked against any software business founded in 1982 existing at all in 2022, let alone being the industry’s fifth-largest company by market cap. More than 80% of the companies listed in the 1993 edition of the Soft-letter 100, a once-influential ranking of the industry’s top firms, no longer exist. Successful outfits tended to be gobbled up by even larger ones—including Adobe, which was #7 on the 1993 list. The unsuccessful ones just went away.

There are even alternate universes where Adobe itself didn’t make it into the 21st century. According to Pamela Pfiffner’s 2003 book, Inside the Publishing Revolution: The Adobe Story, Steve Jobs was so enamored with Adobe’s technology that he tried to acquire the company for $5 million in 1983, well before it had released any products. Prizing their independence, Warnock and Geschke turned down the offer, but later accepted a $2.5 million investment in return for 20% of Adobe. (Apple cashed out in 1989.) In 1998, when Adobe was experiencing a rare downturn in its business, it was even the target of a hostile takeover bid by its smaller rival Quark.

Along the way, Adobe often grew by buying other companies, including its two most imposing one-time rivals, Aldus and Macromedia. Wikipedia’s list of its acquisitions includes 56 purchased entities, not a gigantic quantity for such a venerable company. (For Microsoft, the number exceeds 280.) Still, those purchases—some blindingly logical, others forward-looking—add up to a fundamental part of Adobe’s corporate character. “One of the things I love about this company, that’s unique about its DNA, is that it grows through foreign bodies,” says chief product officer Scott Belsky, who originally joined Adobe when it acquired his startup, Behance—a social network for creators—in 2012.

Which brings us up to the present and what might be Adobe’s boldest acquisition of all: its $20 billion deal to buy Figma, maker of the popular web-based interface design tool. Announced in September, it will be the biggest acquisition of a venture-backed startup ever, assuming it closes as expected. And though it’s pretty obvious why Adobe would want to own Figma—its own equivalent offering, Adobe XD, hasn’t been a blockbuster—the implications go beyond filling a hole in its product lineup.

When the transaction was announced, the instinctive consensus among Figma fans was deeply negative, which wasn’t a shocker. Some of them liked Figma specifically because it isn’t an Adobe product. And in general, people who love a product just don’t get excited by the prospect of it being gobbled up by an industry giant. Narayen asks skeptics to give the Adobe-ized incarnation of Figma a chance: “There are other companies whose business model may be, ‘We will buy a company and we will slash and burn it, and we will drive profitability,’” he says. “For us, it’s all about accelerating growth.”

In a perfect world, Figma’s skill at creating polished, streamlined graphics software that lives inside a browser could rub off on the rest of Adobe, whose mainstay creative tools are still kitchen-sink desktop apps for Macs and Windows PCs. Figma cofounder and CEO Dylan Field emphasizes that his first priority will be the product his company created: “I definitely intend to be helpful, to the degree I can be helpful, but my focus will be on Figma,” he says. But he does talk about the possibility of Adobe helping Figma to reach a market beyond the design community, a process that is already underway thanks to FigJam, Figma’s clever collaborative whiteboarding tool.

“Figma is not really a slide creation tool at the moment, but people are using it that way,” Field says. “And I think there’s so much we can do to really excel in these productivity use cases.”

AI gets generative

At Adobe Max, Scott Belsky is showing how to create a new font in Adobe Express, a web-based design tool in the same ZIP code as Canva. More specifically, he’s showing how to describe the font you want—with phrases like “colorful electric cables hanging from ceiling” or “orchid petals”—so Express can generate it for you. It’s an early example of generative AI taking over some of the heavy lifting of content creation, one of the biggest themes of the conference’s technology previews.

If Adobe weren’t all over generative AI, it would be surprising. “The fact is that we’re already using AI to make our products more accessible, more productive, and more fun,” says Narayen. The company has given its AI features a unified brand, Sensei, spanning everything from the image-processing algorithms that clean up documents in Adobe Scan to tools that help marketers allocate budgets.

At the moment, generative AI is most familiar via services such as DALL-E 2 and Stable Diffusion, where it’s cool but also controversial. The technology has put creative types on edge, not just because it could threaten their livelihoods but also because it uses work by human artists as training data, allowing it to mimic the styles of creators who never granted permission for their imagery to be analyzed. A recent Stable Diffusion update tried to address this concern, annoying users who liked using it to effortlessly copy their favorite art styles.

As a company that wouldn’t have a business without the creative community, Adobe is treading carefully. If anything, Narayen is tamping down expectations. “I think the ability of technology to overcome human ingenuity in the near future is vastly overblown,” he cautions.

But even if all generative AI does is assist human creators rather than threaten to replace them, it could transform how people use Adobe products. The company’s flagships, such as Photoshop, rarely lack for power features, but often feel like they cater almost entirely to the most serious of users, not newbies who could use a little hand-holding. (Okay, let’s just say it: They can be just plain Byzantine.) Belsky thinks that generative AI could help beginners get going more quickly by giving them something other than a blank canvas to start with. And even people who do know what they’re doing might benefit from the technology.

“If a designer can explore 30 different paths as opposed to just three, I would imagine that she’ll end up with three better final ideas to present to her client,” he theorizes. “And so in that sense, generative AI should uplevel the quality of creative work more broadly.”

How quickly could all this happen? “I would guess whatever our answer is, the real answer is probably twice as fast as we’re going to say,” says digital media CTO Ely Greenfield. “That’s been our experience so far.”

Adobe’s goal, however, is not to rush out generative AI so hastily that it fails to address the new challenges it will create. In 2019, it cofounded the Content Authenticity Initiative, an industry association working on standards to combat misinformation by establishing the provenance of photos, videos, and other pieces of digital content. That diligence could prove essential as computers get better at churning out synthetic media that’s so realistic you might mistake it for the real thing.

Already, the company is also accustomed to wrestling with the cultural implications of new AI features, ideally while they’re still under development rather than in the wild. For instance, a Photoshop feature that lets you swap out the real sky in an image for a replacement of your choice uses AI to keep foreground elements in place, including people: “If it works better for certain hair than other hair, then you have a bias problem,” says Gavin Miller, the head of Adobe research. “Even though it seemed like it was a low-risk activity.”

All sorts of things could go awry with generative AI as it produces new imagery based on training data. But Miller says that some of the emerging issues have parallels in Adobe’s stock-image business, where the company knows it’s a problem if a search for “doctor” pulls up only photos of white guys. “What’s new is the [generative AI] lets you mix and match things in combinations that you may never have actively curated,” he says. “And so figuring out how to anticipate ethical questions there is a new wrinkle that we’re still learning about.”

What next?

For a technology company of its size, Adobe has a relatively low profile—and unless you’re paying careful attention, it’s easy to miss how large it’s grown. In 1998, the year Narayen, joined the company, its yearly revenue was $895 million. In 2008, his first full year as CEO, it reached $3.6 billion. Last year, it hit $15.8 billion.

“There’s a lot of customers who think of Acrobat and Photoshop, but they have no idea about the entirety of the digital experience business,” says digital media Senior VP Ashley Still. “And then there are people on the digital experience side that are blown away by the scope and scale of the digital media business.”

Narayen’s openness to unfamiliar territory helps explain Adobe’s current scale: “‘We are not opportunity constrained’ is a very common thing you hear Shantanu say,” notes Still. When the company bought analytics giant Omniture in 2009, less than two years into Narayen’s tenure as CEO, it was a striking departure from its traditional business. But after other key acquisitions in areas such as marketing and content management, the Adobe Experience Cloud has grown to $1.12 billion in revenue in the last quarter—about a quarter of the company’s total.