October 2010
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Day October 8, 2010

The imminent demise of killers

Before proclaiming the death of a company or product it’s important to understand what makes it live. I’ll illustrate with a personal experience.

I was once asked to comment on a product designed to be a “Blackberry killer”. Much like the latest Droid Pro, the product looked like a Blackberry. It had a monoblock keyboard and a nearly square screen. It was, in other words, a product designed for thumb typing emails.

The backstory is that, like many phones, the requirements came from operators. At the time,

Adobe and Microsoft sitting in a tree

Adobe is one of the last surviving desktop software companies. So is Microsoft. Consolidation happens when an industry matures and excess capacity and excess overhead can be squeezed out of the value chain, giving a temporary burst of earnings growth.

So, in this way of thinking, recognizing that the sun is setting on desktop software, a merger of old schools of thought may make sense. Rather like Sun and Oracle or HP and Compaq.

But then a lot of other things make more sense. Like both companies trying to expand into new growth areas. Like Microsoft talking to RIM or Adobe developing tools for HTML5. Adobe’s cash cow products are not going anywhere without a deep reset. Same is true for Microsoft. They will both face these challenges whether standing alone or together.

There would be nothing strange about a Microsoft Adobe merger, but there would be nothing great about it either.