Adobe (NASDAQ:ADBE), which is well known for its creative suite of products (Photoshop, Dreamweaver) and Acrobat software, also sells software like LiveCycle and Connect Pro mainly to businesses. We expect Adobe to benefit from higher sales of such software since they help businesses improve their efficiency as well as reduce costs.
LiveCycle software helps businesses create interactive online customer forms that reduce paper communication and speed up application processes, thereby reducing human error involved in manual processing of applications. Connect Pro is a web conferencing software through which businesses can communicate with each other and their customers, thereby saving on the costs of employee travel and accommodation.
LiveCycle & Connect Pro License Sales Expected to Increase
We estimate that Adobe’s LiveCycle and Connect Pro businesses together currently constitute around 10% of the $38 Trefis price estimate for Adobe’s stock. We believe that LiveCycle and Connect Pro license sales will increase from around 2,500 licenses in 2009 to around 4,000 licenses by the end of the Trefis forecast period.
There are two main factors that are constantly a pressing need for businesses and that will boost demand for Adobe’s software solutions:
1. Demand for Greater Business Efficiency
Businesses are seeking to minimize the necessary human involvement in collecting and processing customer information such as merchandise orders or service applications.
For example, opening a new customer account in a bank may require manual approvals at different stages that are inefficient, time consuming, and have scope for human errors. Adobe’s LiveCycle automates the capturing of data through interactive electronic forms, thereby eliminating manual data entry and reducing the likelihood of transcription error in data processing.
Furthermore, such automated processes can offer improved security for sensitive information like customer profiles and bank account numbers.
2. Demand for Lower Costs
Businesses spend significant money on travel and accommodation for employees, particularly those employees involved in sales. The recessionary environment has forced businesses to look for more innovative methods to conduct meetings, which is where a web-conferencing tool like Adobe Connect Pro becomes crucial. Adobe Connect Pro is seeing wide adoption due to the slump in economy.
You can modify our forecast for above to see how Adobe’s stock will be impacted if its LiveCycle and Connect Pro licenses sold were to increase at a faster rate than we forecast.
