e enjte prill 20, 2006

Adobe: Going its own way downtown

The prevailing view in Silicon Valley is that companies need suburban style campuses to recruit top talent and to allow that talent to develop the ideas needed to be profitable. The more horizontal the better. Engineers want suburban-style amenities, and ideas can't flow up elevators – or so goes the thinking. Adobe Systems (www.adobe.com) continues to thumb its nose at this dogma.

Adobe has for several years been operating out of a 1,000,000 square-foot high-rise campus in downtown San Jose. This campus houses over half of Adobe's principle operations (excluding the acquired Macromedia operations). And it's not populated by just HQ folks. It also has sales, marketing and –yes-- even R&D engineers.

Adobe is so happy with its high-rise campus that it has just bought the adjacent five acres so it can expand ( “Adobe Acquiring Downtown Development Site”/GlobeSt.com ). But it's all alone downtown. No other major tech company has even tiptoed into the downtown high-rise environment. But if Adobe's performance is any measure, a downtown high-rise campus can be good for business. Both revenue growth and operating margins are a spectacular more-than 20% per year and the stock value, while still down from its dot.com era peak, has quadrupled from its post-crash low four years ago.

Tech companies should take note: Maybe volleyball courts, surface parking lots, and supermarket-sized floors don't matter after all.