How Adobe is Pushing Quark off the Page
When the leader in desktop publishing software got lazy, a nimbler competitor grabbed market share.
By Mark Borden

(Business 2.0) – It's good to be king in the enterprise software business. Once a given platform becomes an industry standard, switching costs and network effects make it tough for competitors to dethrone the champion. Yet dominance is no guarantee of invulnerability--as one reigning king of the hill, Denver-based Quark, is learning in the face of tough competition from Adobe in the $2.7 billion desktop publishing software market. Since the early 1990s, QuarkXPress has been an essential tool for design professionals, advertising agencies, and publishing companies, which use the software to create graphic layouts (like the magazine page you're reading now). By 1998, QuarkXPress enjoyed an 80 percent market share and a virtual monopoly among designers at firms such as Condé Nast, McCann Erickson, and Time Inc. (parent company of Business 2.0).

Today, however, San Jose-based Adobe has Quark on the defensive as high-profile customers in publishing (Hearst), advertising (Ogilvy & Mather), and architecture (Hellmuth Obata & Kassabaum) have dumped Quark in favor of Adobe's InDesign. According to market research firm NPD, InDesign handily outpaced QuarkXPress during the first five months of this year, capturing about three-quarters of all stand-alone units sold. "This is a case study on how to attack an established product," says NPD analyst Christopher Swenson.

Why has the momentum shifted? Quark got complacent. Users contend that after QuarkXPress 4.1 was released in 1999, the software remained virtually unchanged for the next four years. "They stopped paying attention," complains Ogilvy & Mather studio manager John Lopez.

This created an opportunity for Adobe, whose Photoshop photo-imaging and Illustrator graphic design programs are also industry standards. Though the initial version of InDesign, released in 1999, was buggy, Adobe released InDesign 1.5 within six months, eliminating many of the shortcomings. "We wanted to send a message that we were addressing issues aggressively," says Adobe product management director Mark Hilton.

Quark's inertia became even more apparent when Apple Computer moved to OS X in 2002. Many design professionals work on Apple's Macs, and the launch of InDesign 2.0, which runs on OS X, coincided with the adoption of the new operating system. Quark, however, released QuarkXPress 5.0 on Apple's already-obsolete OS 9 platform. By the time the OS X-compatible QuarkXPress 6.0 was released 16 months later, Adobe had already moved to exploit the popularity of its other products by packaging InDesign with Photoshop and Illustrator in a $1,200 bundle called Creative Suite.

Things might get worse for Quark before they get better. In June the company announced the resignation of its CEO, who had been on the job only 16 months. "We're turning the cruise ship around, and I think people will see that," says Quark product manager Tim Banister. Quark has started offering discounts for educators--a key market, since the tools used by design students strongly influence purchasing preferences later in their careers. But is it too late? At schools like Massachusetts College of Art and UCLA, QuarkXPress has faded from the curriculum. Says Henri Lucas of UCLA's department of design and media arts, "The minute you switch over to InDesign, it's probably permanent." -- MARK BORDEN