Category Archives: Business

Part 1 – Why Micro Four-Thirds is the System of the Future: Size Matters

May 31, 2013

I confess; I’m a recent convert to the micro four-thirds (m4/3) system. I received the Olympus OM-D EM-5 as a Christmas present, and I’ve built a serious collection of lenses since then. My appreciation of the benefits of the m4/3 platform continues to grow. Originally, I was going to write one post about why I think the m4/3 system is the future of the camera industry, but I realized that a single article would be too long in a blog format. Consequently, this is the first installment of a series about the importance of the m4/3 system to the camera industry. Continue reading

Where is the Next Innovation in Photographic Software Likely to Originate?

May 16, 2013

In my last two posts I’ve argued that Adobe Photoshop is a mature product that isn’t likely to see many new and radical innovations in the future. The most radical innovation coming from Adobe in the last few years was probably Lightroom in 2006/7. This is not surprising.  Large, established players in an industry tend to protect their turf and this often precludes thinking ‘outside the box.’ New innovations alter the shape of markets and industries to the detriment of existing players. The Austrian economist, Joseph Schumpeter, famously called this process “creative destruction.” Continue reading

Adobe’s Empty Promise of Innovation

May 14, 2013

Adobe has consistently touted a particular benefit of its move to the cloud — engineers will be able to distribute new innovations quickly to cloud customers.  Instead of waiting for a new major release, the company will be free to add new features when they are ready.

There’s a big problem with this “benefit” for customers. When was the last time Adobe introduced a truly innovative feature?  Certainly Photoshop has improved with every new version, but most of the improvements over the past few years have been incremental. The program has become more “content aware,” and there have been a few tweaks to other tools. As I mentioned in my last post, I recently upgraded from CS3 (first released in 2007) to CC.  I didn’t see a whole lot of difference.  Here is one of the “new features” for CS6 listed in a 2012 PC Magazine review: “The new UI uses a dark gray background, the darkness/lightness of which is customizable.” Let’s face it, Photoshop, like Microsoft Word, is a mature product. At this point in the product lifecycle, no one is clamoring for a new feature for MS Word or Photoshop.

The Boston Consulting Group developed a name for products like Photoshop in the 1970s: cash cows. Cash cows are mature products with significant market share in low growth industries.  Consultants advise companies with cash cows to milk them for profits for as long as possible and not to invest significant funds for R&D on these products in the firm’s portfolio. Uh oh, do you think Adobe will follow this strategy when they have a steady revenue stream and no exit option for consumers?  I do.

Next:  Where is the innovation in photography software likely to come from?

A B-school Professor’s Take on the Adobe Creative Cloud Decision

May 13, 2013

Adobe’s recent decision to move to the cloud for its Creative Suite programs has caused a great deal of consternation among creative professionals and hobbyists alike.  Scott Kelby found himself in the midst of a mini-storm after his comments were seen as supportive of the move. HDR Guru Trey Ratcliffe called the idea “pretty crazy” on Google+.  Forums such as those on Digital Photography Review have been inundated with conversations criticizing the move.

Most of the discussion on the merits of the decision by people like Scott Kelby and others has focused on the cost versus benefit for current customers.  Is it worth $50/month, $20/month, etc., depending on your needs?  I think this misses the fundamental issue that underlies most of the angst over Adobe’s move to the cloud.  The problem boils down to one thing; we just don’t trust Adobe.

Exit, Voice, and Loyalty

A brilliant economist wrote a great little book in 1970 that distills the problem for Adobe. Albert Hirschman’s book Exit, Voice, and Loyalty  shows how firms must balance exit and voice to achieve loyalty from their customers. The concept is that consumers must feel that they have voice with the firm in order to develop a meaningful relationship with the brand. The possibility of exit (i.e. buying a competing product) enhances a firm’s willingness to listen to the voice of its customers.

Adobe has been notably tone-deaf in its response to customers over the past few years. Even Scott Kelby (President of the National Association of Photoshop Users) admitted that his voice had little impact on Adobe’s decisions in a recent webisode of his show “The Grid.”  How will the average consumer have an impact on Adobe’s direction if Scott Kelby can’t? Moreover, there is little alternative choice in the photo editing marketplace. There are a few open source alternatives (e.g. GIMP), but none are really widely accepted. Additionally, switching costs (in both time and money) for photographers with large investments in plug-ins and related software would be significant if they left the Photoshop fold.

While there have been no full featured alternatives to Photoshop for many years, customers have had an “exit” option of sorts. They just refused to upgrade to the next edition. Personally, I have been using CS3 for many years and have been perfectly happy with it. I recently upgraded to the Creative Cloud version and frankly I haven’t seen a lot of difference in features or performance.  As time goes on, my exit options will diminish. All I have is a CS3 version that will eventually stop working with the latest operating systems. I could easily squeeze 5-7 years out of a version of Photoshop.  Rather than listen to its customers, Adobe has chosen to limit the exit options. This does not bode well for customers or Adobe.

Hirschman points out that firms become inefficient over time and the risk of customer exit increases the importance of listening to customers’ voices and improves efficiency. Without exit or voice firms become tone-deaf and inefficient. That is the real fear that photographers are expressing — a tone-deaf and inefficient Adobe with no alternatives in the marketplace.

Next:  Adobe’s empty promise of innovation

Note: Albert Hirschman’s gem Exit, Voice, and Loyalty is still in print and available at Amazon.