Adobe sees NFTs and the metaverse as opportunities for collaboration and growth
Adobe Inc. Chief Executive Officer Shantanu Narayen sees tools that foster teamwork and products that take advantage of trends in the digital world such as non-fungible tokens and virtual reality as the next wave of growth for his company that dominates creative design software.
The company will release test versions of two products that let people work together: Creative Cloud Spaces, which provides a place for teammates to organize files, libraries and links, and Creative Cloud Canvas, which lets people display their design work to review with others who are part of the project. Adobe will also test web versions of Photoshop and Illustrator, which it hopes will let multiple people work more easily on projects using that popular software. While collaboration tools have been commonplace for other types of software like word processing and spreadsheets, it has been more difficult to make sharing massive, detailed digital images and videos elegant and easy, said Adobe Chief Product Officer Scott Belsky.
“The number of stakeholders that exist in the creative process—whether you’re an agency or a marketer or a design professional or an executive who needs to approve a particular campaign—the skill set associated with the multiple people collaborating, it is different,” Narayen said in an interview ahead of the company’s MAX products conference on Tuesday. “If you’re working on a spreadsheet or working on a Word document, it’s probably a more sort of normalized set of skill sets.”
Emerging areas such as creating three-dimensional objects for the metaverse, augmented reality and virtual reality, and technology to make sure NFTs and news videos are authentic, will expand the market for Adobe’s products, Narayen said. New mobile phones with multiple cameras that can take high-quality images are also fueling demand, he said.
“New media types are coming,” he said. “The secular trends associated with the number of people who want to create, the new devices on which people are going to create, the dramatic advances in computing power—those are all tailwinds that will be growth drivers for us.”
As the maker of the most popular types of creative tools, Adobe has a lock on the market, but must find ways to grow in order to justify a stock price that has more than doubled in each of the past two years, expanding the company’s price-to-earnings multiple, said Bloomberg Intelligence analyst Anurag Rana. Shares have jumped about 30% thus far in 2021.
“Adobe’s Creative Cloud has a formidable position in the market and has grown over 20% for the past four quarters,” Rana said. “The depth and breadth of this product suite makes it the de-facto choice for creators. However, it is going to be hard for Creative Cloud to continue to grow at the same pace over the next 12 months, as comparisons get tougher, and it becomes harder to find new users.”
Two years ago Adobe began an alliance with other tech companies and content providers to combat things like deepfakes by providing technology to verify content authenticity. The company Tuesday unveiled features called Content Credentials, which will let users assess where digital content came from originally and who created it. The tools will be available to test for millions of existing Adobe Creative Cloud customers. Demand for NFTs and for verifying that commercial products are legitimate will probably be the first drivers that push adoption of the technology, Narayen said.
“If you’re buying a piece of great content and it was designed by (Adobe Vice President) Stacy Martinet,” he said in the interview in a nod to his colleague. “You want to make sure that it’s actually designed by Stacy rather than anybody else,” he said.
Adobe is also working on new 3-D products to be the future design tool provider for the metaverse, an idea championed by companies such as Facebook Inc. and Adobe partner Microsoft Corp. that people will live, work and exercise inside a virtual universe.
Belsky is scheduled at Tuesday’s conference to talk about Adobe’s Substance 3D collection, which lets designers do things like sculpt a 3-D object from scratch, as well as start with materials and textures the company has created. In order for these new virtual technologies to take off, they need great content and it’s up to Adobe to make it easier to design, Narayen said.
“The reason why you haven’t seen more AR or VR content is because it’s hard to author, but we’re making strides on that,” he said.
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Fortune’s upcoming Brainstorm Design conference is going to dive into how businesses are building experiences in the metaverse. Apply to attend the event on May 23-24 in New York.