Back in 1998, Quark Inc. opened discussions to acquire Adobe , a $240 million company at the time, for an estimated $2 billion. Not only did Adobe essentially ignore Quark’s overtures, the following year it debuted InDesign;a page layout application that eventually knocked Quark out of its industry dominating stupor and inspired a full-on race for design-shop dominance.
Despite InDesign’s ascendancy in the page-layout market, Quark is not in danger of obsolescence, yet. Claiming an installed base of 3 million global users (strategic marketing manager for desktop products Marc Horne declined to break out Quark’s U.S. installed base) it’s about to launch version 7 early next year which is designed to address what’s become painfully obvious: Switchers. There have been some high-profile ones;Meredith, Hearst and Conde Nast;and addressing this is top on Quark’s to-do list. “Quark’s number one priority is to shore up their installed base and prevent existing customers from defecting,” says Chris Swenson, director of sales and marketing research firm NPD Group .
Late to the Party
Initially, InDesign was an itch Quark couldn’t be bothered to scratch as the company snoozed away three years before launching version 5, which was incompatible with Apple’s System X. Version 6, released a year later, corrected that. In the meantime, Adobe continued to innovate, capitalizing on user demands that Quark was not addressing. The real kicker, however, came in late 2003 when Adobe bundled InDesign into its Creative Suite, a move that offered a one-two punch of integrated workflow functionality and aggressive value. Today, Adobe’s Creative Suite 2 Premium sells for $1,199. That includes the latest versions of Photoshop, Illustrator, InDesign, GoLive, and Acrobat 7 Pro;software that if purchased separately costs more than twice that much. Quark 6.5 currently sells for $699.
“If you look at the individual graphic designer using a page-layout product,” says Horne, “since they’re quite likely to be interested in the Creative Suite because of the price, we have to be very clear in what it is that we bring in terms of productivity and in-house creativity for them.”
“At the end of the day,” says Swenson, “it’s a business decision. Are you getting more work out of your staff? Adobe’s [Creative Suite] integration story can’t be emphasized enough.”
“For publishers, it fundamentally comes down to ROI,” says InDesign group product manager Will Eisley. “That’s another area where we saw an opportunity with InDesign. It was looking at not only what we can do from a feature perspective but where are the spots in the workflow where we can provide greater efficiency? And that’s where you see us take the Creative Suite and build out a set of tools that tie together in a platform.”
But according to Swenson, Quark still retains the lion’s share of market dollars, about 70 percent of “standalone” (read: unbundled) revenue through August 2005. “Adobe recognizes this is not a slam dunk, which is why they’re going for the aggressive pricing strategy,” he says.
Quark’s Last Stand?
As for functionality, Quark’s 7, which may be its last chance to prove itself, is expected to finally address many of the features that InDesign has already built in and turn it up a notch with workflow efficiencies of its own. Asked for his top three enhancements, Horne offered Transparency, a tool that catches Quark up with InDesign and allows designers to apply opacity values to graphic elements; Composition Zones, which lets more than one designer collaborate on the same file in realtime; and Job Jackets, an output feature designed to cut down on format errors by synchronizing key production and design settings between publisher and printer.
“They’re like the neurotic lover who keeps crawling back and saying ﾑNo, no I’m really different this time.’ Except it actually does seem different this time,” says industry consultant Thad McIlroy.
Indeed, aside from enhancements to its software, Quark Inc. is attempting to overcome its not-too-distant history as a notoriously aloof and service-averse company. Quark reopened its user forums, began offering free customer service, launched a new e-newsletter and Webinars, and is regularly contacting customers via surveys. “We hadn’t made the effort to push it out as much as we should have done but over the last 18 months or so that’s changed a lot,” says Horne.
Quark may have an advantage with what Swenson calls the network effect. “People get locked into a tool. Companies will standardize a product to establish workflow,” he says. While this might keep some enterprises on the fence while waiting for Quark 7, Adobe’s Eisley counters that migration is not a problem. “We intended to put in functionality that makes the transition smooth. You’re able to convert your legacy Quark 3 or 4 documents to InDesign and there’s a set of keyboard shortcuts that are from QuarkXPress,” he says.
This puts the pressure on Quark 7 to perform. The flip side of Swenson’s network effect is once customers switch to InDesign they’re unlikely to go back.