Silverlight Market Share
After I just finished posting about Popfly, I saw this post on Valleywag. I think I strongly disagree with every sentence in that last paragraph.
- "Rarely has Redmond produced such a simple, visually appealing tool for developers." - How many tools does MS produce for developers? Visual Studio & Expression Blend? Where do they get "rarely"? It's not like they are cranking out tools like Nokia makes phone models. Blend is simple and visually appealing so that makes 50% of the time at least. And even people who don't like .NET have to admit it's a pretty solid developer IDE. Plus I've already written previously
- "After playing with Popfly, talented developers will likely migrate to more powerful tools." - Umm..... talented developers are probably already using more powerful tools. Probably because they're talented.
- "But Microsoft is badly losing in the battle with Adobe's Flash."
#3 definitely deserves it's own paragraph or several.
How is Microsoft losing badly to Adobe? I'm going to assume he's referring to Flash vs. Silverlight in this case.
The most commonly cited metric of Flash dominance in the marketplace is it's 94% or so install base. I think that number is essentially meaningless for several reasons.
- Silverlight was released as 1.0 last month. Flash 1.0 was released in 1996. 10 years is just a little bit of a head start to establish an install base. If Adobe/Macromedia could not get a free product with little or no competition installed on most browsers over 10 years then I would think they were doing something seriously wrong. I would be shocked if Silverlight 2.0 or 3.0 did not have similar install numbers. At worse Microsoft could include Silverlight in IE and instantly skyrocket the number of users with it installed.
- It's not as if users choose Flash over Silverlight. Users choose to view content created in Flash and therefore need the plug-in. Since Silverlight is still new, there is still relatively little content created in it and users have not needed to install the plug-in. Development on a new platform takes some time to ramp up. Once Microsoft lines up more Silverlight content like MLB, the number of installs will increase dramatically. If YouTube switched to Silverlight, how fast would Silverlight gain ground? Outside of the zealot developers on each platform no one cares weather something is in Flash or Silverlight.
- It's not a win / loss game in terms of installs. Both can be installed at the same. Both can have 100% install base and it doesn't matter.
- How much revenue does Adobe make off of 1 additional install of Flash? $0.00? What about Microsoft? $0.00 per Silverlight install. Does Microsoft care if Adobe gives away more free Flash plugins?
So if the number of installs doesn't matter, what does?
What probably matters to Adobe is sales of their creative solutions and enterprise and developer solutions. For Adobe that amounted to about $605 mil or 70% of their revenue in Q3 2007. (ended 8/31/2007) If one developer builds a Flash game and 2 million more people download the Flash plugin, how much revenue does that bring to Adobe? $500 for the developer tool to create the game? They essentially gain nothing from the number of users with the plugin installed. They need to grow the number of developers building RIAs with Flash. Previously they had no competition in this space. Now they have Microsoft. I would have to assume that their revenue numbers will start to decline over the next few years as Microsoft gains momentum in that space.
What has to matter to Microsoft is also their Server and development tools. For Microsoft that amounted to about $3 billion or about 25% of their revenue in Q4 2007 (ended 6/30/2007). Microsoft is still doing very well in that area despite badly losing to Flash. Microsoft previously didn't really have a competitor to Flash. Every developer/designer they convert to the Microsoft platform from Flash hurts Adobe's core business of creative solutions. The same isn't necessarily true.
Additionally, I've always viewed Microsoft's developer tools as a means to sell more server products. I don't know what % of that $3 bil is dev tools vs servers, but I'd imagine that servers are a much larger share. Silverlight is a means for them to sell more servers like DRM servers, digital asset management servers, and streaming servers.
To sum it all up I think Microsoft could just give away their Silverlight development tools and the plugin and it will still create more revenue for them through their server and OS business as more people adopt silverlight. And more people will adopt silverlight. Adobe's business seems to be built around tools like Flash. If they gave that away for free they'd be hurting a big part of their business. It really seems like it's going to be a tough battle for Adobe over the next 3-5 yrs. Probably a lot like this.
I do think that it's exciting that Adobe is challenging on different fronts like server products and more pure developer tools. I'm sure it will spur Microsoft to make improvements in those respective areas.
Anyway, I could be way off on my arguments. After all I am a developer and I should probably be coding instead.