You've probably heard the news that Adobe's CTO and defender of Flash, recently resigned in order to accept a job at Apple.
Given Adobe's strength developing professional creative tools and its ongoing transition to cloud services, it's easy to jump to the conclusion that he was hired to either shore up Apple's professional creative tools or address problems with its cloud services.
I don't think either of these conclusions is right. The real reason is a bit less clear-cut. I believe that Lynch was hired to fill a gap in Apple's executive ranks after a tumultuous year.
The real task at hand for Lynch will be to prove himself as a leader and carve out a role in unfamiliar territory on part of Bob Mansfield's "Technologies" team. This new team combines all of Apple's wireless teams into one group that includes Apple's growing semi-conductor teams. Lynch could contribute software development expertise to the team engineering Apple's custom chip designs. Success here could pave the way for him to fill Mansfield's role when he retires (again).
Shoring up Apple's Pro Creative Tools
Some may read Kevin Lynch's move as a signal that Apple is ready to make a serious push to shore up its suite of professional creative tools. After all, creative tools are Adobe's strongest product area, and they are the largest contributor to a product segment that generated over $3.1 billion in revenue in 2012.
Under Lynch's helm, Adobe has assembled a variety of tools, several through acquisitions, into multi-product suites that make the buying decision relatively easy. He has also championed the introduction of touch based apps for smartphones, as well as, the introduction of tools to help customers author HTML5 applications. Adobe is literally a one-stop shop where creative pros can cost effectively get most of their core tools. Apple on the other hand has a hodge podge of professional tools. While Final Cut Pro X, seems to have found its footing after a botched launch, Motion, Color, and Logic Pro (last significantly updated in 2009) could all use some love. Apple still lacks a true rival to Photoshop, although patent applications and persistent rumors could be evidence that Apple is working on cracking this category.
Apple has its work cut out if it's interested in taking on Creative Cloud. Adobe has a strong suite of tools coupled with fairly aggressive pricing. I'm not sure there is a massive pot of money for Apple to go after given the relatively low growth of the market and Adobe's dominant position in it. The business case for investment would probably be driven by the ability to translate software sales to professional customers into increased hardware sales.
Even if Apple is interested in bolstering its position in this market, I'm not sure Lynch would be the one to lead it. When Apple enters a market, especially one where there is a dominant player, it pushes boundaries to create a new paradigm rather than just copying the leader. I'm sure Lynch has plenty of ideas about how to improve Adobe's tools, but I'm not sure he has been holding several game changing new creative tools up his sleeve.
Apple's biggest problem with creative tools is not a lack of talent, it's a lack of commitment. I don't think hiring Lynch should be interpreted as re-commitment to this market segment.
Saving Apple's Cloud Services
There's no question that Apple believes its future is in "the Cloud". During the iCloud introduction at Apple's 2011 Worldwide Developers Conference, Jobs summed it up as follows:
We've got a great solution to this problem [syncing devices]... We're going to demote the PC and the Mac to just be a device. We're going to move the digital hub, the center of your digital life, into the cloud.
By some accounts iCloud is the most used cloud service in the U.S. due to its deep integration with the MacOS and iOS devices.
In spite of this heavy usage, or perhaps because of it, Apple's cloud services have experienced persistent outages. However, the problems run deeper than just reliability. The customer experience of MobileMe, Ping, iCloud, and Apple Maps haven't met the standards we've come to expect from Apple.
If Apple has problems creating cloud services, is Lynch the man to fix them?
A couple of articles have made the case that he is. An article in TechCrunch says that Eddy Cue, the senior exec whose portfolio includes iCloud, Siri, Maps, the App store, and iTunes, could use some help from "a proven cloud services veteran to shore up iCloud's continued deficiencies." Lynch's experience transitioning Adobe from selling boxed software to cloud-based offerings is offered as the supporting evidence that has the talent to turn this around.
The transition to Creative Cloud was a big initiative that carried significant operational and financial risk. It has been well executed and has exceeded Adobe's expectations (in it's Q1 results Adobe announced that it had over 479k paying subscribers). However, I would argue that the transition has been more of a marketing exercise than a real shift to the type of web-based services that Apple is trying to offer.
Creative Cloud functions like a license server, whereby users are authenticated and then permitted to download and install software. Every once in awhile, the apps on your computer check with Adobe to see if you still have a valid license. Most of the applications are the same ones that were shrink wrapped, they are just sold in a different way. The apps don't run in the browser, and Adobe has only taken baby steps when it comes to things like syncing and collaboration.
iCloud is far more ambitious. The promise of seamless syncing and automatic versioning of every file and photo you create is appealing. In a sense, it's changing the entire nature of the file system, so that it doesn't matter where your files, music, and videos are stored. You simply access your files anywhere, anytime, and on any device (as long as it's made by Apple).
Apple's grand vision required a massive investment in infrastructure. It's estimated that Apple invested about a billion dollars in the first of several new data centers to power its cloud services. Compared to Apple, Adobe's services, which are powered Amazon Web Services, have modest infrastructure requirements.
If Apple is looking to really beef up its Cloud services, it needs someone who is born of the web and who has built a very large scale consumer web service. Perhaps this is why there are perpetual rumors that Apple is interested in acquiring Twitter. It would help solve Apple's cloud problem and its poor track record building social applications in one fell swoop.
Stacking the Bench With Talent
While there haven't been any heads on spikes, there has been about as much intrigue on Apple's executive team as there is in an episode of Game of Thrones (this article has a great overview). In the last twelve months:
Scott Forstall, head of iOS software, and a polarizing figure at the company, was let go following the poor reception of iOS 6's maps application and his subsequent refusal to sign a letter apologizing to customers for the frustration the software caused them.
John Browett, the head of Apple retail, who Cook hired in January 2012, only lasted 10 tumultuous months at the company before he was fired.
Bob Mansfield, Apple's head of hardware engineering announced that he was retiring in June, 2012. Two months later, and after the departure of Forstall, he mysteriously came out of retirement with an expanded role.
Hiring Lynch is probably more about trying to fill a thinning executive bench than it is about plugging a specific software gap or revamping its cloud strategy. Lynch is an ambitious leader (by some reports he was gunning for the role of CEO at Adobe) who has demonstrated that he can work collaboratively with others, integrate acquisitions, and effect large scale change. All of these are things that Cook highly values.
The choice to have Lynch report directly to Mansfield could give him the opportunity to prove himself under the tutelage of someone who is very well respected at Apple, who has a very broad mandate, and who's days at the company are numbered.
While Lynch may seem like an odd fit for Mansfield's hardware oriented technology group, the team's penchant for making and integrating acquisitions (it's home to PA Semi, Intrinsity, AuthenTec, Anobit) could play to Lynch's strengths as a leader who can make acquisitions live up to their promise. Further, as the technology group designs increasingly optimized processors for Apple's devices, Lynch would be the right person to ensure that the silicon is perfectly tailored for the next generation of software that Apple is going to create. Whether this is a signal that Apple is going to move the Mac OS to custom ARM processors is open to debate. Regardless, success here could pave the way for him to fill Mansfield's shoes when he really does retire in two years.
I wouldn't count on Lynch to bring you a strong competitor to Creative Cloud, and I wouldn't count on him to swoop in and solve Apple's cloud problems, but I would count on him to make sure Apple's software and hardware designs work together in way that is unparalleled in the industry.
