Microsoft Corp. said it has cancelled plans to include an automatic way to save documents in the popular PDF format in the next version of its Office software, amid an ongoing dispute with Adobe Systems Inc.
"Adobe’s agreements with Apple and others for PDF support and Microsoft’s encroachment on its business means it makes it more likely that Adobe will resort to an antitrust suit against Microsoft," said Stacey Quandt, an analyst at Aberdeen Group.
Instead, users who purchase Office 2007, due out to consumers in January, will have to download separate, free software to save documents created in Office products such as Word and Excel as PDFs.
The spat with Adobe, which developed the popular PDF, or Portable Document Format, comes as Microsoft is preparing to launch its own competing format for saving documents that cannot be easily modified. Microsoft’s technology is called XPS, which stands for XML Paper Specification.
Adobe appears ready to file an antitrust lawsuit against Microsoft in Europe following the breakdown of negotiations between the two firms over Microsoft’s use of Adobe’s PDF technology.
Adobe is using the threat of a lawsuit in Europe as a tactic, said Laura DiDio, a Yankee Group analyst. "The European Commission is all over Microsoft, and it does not even try to appear to be unbiased. So this is not a hollow threat from Adobe."
Adobe is concerned that PDF might become commoditized, she said.
David Heiner, Microsoft’s deputy general counsel, said Adobe had wanted Microsoft to charge customers for the ability to save Office documents in either the PDF format or Microsoft’s new, competing XPS format.
Heiner said Microsoft would not agree to charge for the capabilities, but did decide to offer them as separate, free downloads.
He said Microsoft expects Adobe to take legal action, perhaps in the European Union.
Microsoft Response
Microsoft is prepared to take PDF out of Office 2007, but does not want to charge for it.
We have taken a number of significant steps to accommodate Adobe, and offered many proposals in an effort to avoid a dispute, said Stacy Drake, a Microsoft spokesperson. "But we have now reached a point where we feel what Adobe is asking for is not in the best interest of our customers."
We are planning to remove (Save as PDF) from Office and make it available only as a separate download, Drake said. Also, we have offered to ship Adobe’s Flash and Shockwave software with every copy of Windows Vista. But the changes we are planning to make are not enough for Adobe.
Drake said Adobe is asking Microsoft to charge its customers a price for using what everyone else in the world can use for free.
Drake said that, in a bid to answer Adobe’s concerns about Office 2007 and Windows Vista, Microsoft had offered to make changes to its products and even to ship Adobe products with Windows.
PDF is already supported by Apple and by OpenOffice.org in their software, a fact that Microsoft uses in support of its case.
Adobe has long claimed that PDF is an open standard, and dozens of companies, including a number of our competitors, have implemented that standard, but Adobe insists we need to charge a price, Drake said.
In an e-mail to The Associated Press, Adobe spokeswoman Jodi Warner said: "As our CEO Bruce Chizen has stated at numerous times in the past, Microsoft has a monopoly and we are always concerned about the possibility that they might abuse that monopoly."
Warner said Adobe has discussed those concerns with both Microsoft and regulators, but she declined to comment on the details of any discussions with the software maker.
PDF Alternatives
Adobe’s PDF format is popular with government agencies and businesses in part because it allows users to share documents that cannot easily be edited or changed. Also, users do not need to have a copy of Microsoft Word or another paid product to see documents, and reader software is available for a wide range of computers.
If Microsoft is forced to remove the PDF capabilities from Office 2007, it is possible that sales of the software suite might suffer. "PDF export was the new feature most requested from users, and if it is dropped, it would not help Office 2007 adoption," said Gartner Group analyst Michael Silver.
Currently, creating a PDF file from Office requires separate software, ranging from the $449 US Adobe Acrobat Professional to free products like Pdf995. Other word-processing products also ship with tools for savings documents as PDFs.
But Microsoft does have an alternative to PDF up its sleeve. It has developed the XPS (XML Paper Specification) standard, which could act as a cross-platform alternative to PDF. "XPS could be a substitute to PDF and a reader was supposed to be included in Windows Vista," said Silver.
Quandt offered a similar take. "Microsoft appears to be stepping up its assault on Adobe’s installed customer base," she said. Within 60 to 90 days of the general availability of Microsoft’s Vista, it plans to ship its Expression line of design and development software.
Microsoft’s investment in its Metro graphic design product, which allows documents to be displayed and created across platforms, and also its plan to give Adobe PDF for free in Office 2007, will place more pressure on Adobe said Quandt.
After many delays, Vista also is scheduled to be released to consumers in January. Heiner said he thought it would be possible to include the free Adobe Reader in Vista and still make the planned January consumer launch, although he said things would have to move quickly.
A spokesman for European Union antitrust regulators said they are not involved in the dispute at this point. "It is an intellectual rights issue, not a competition issue," said EU spokesman Jonathan Todd.