Adobe released its quarterly and full year results last week; I am catching up with this now after a week in China.

The company is doing well. Revenue is up by 11% year on year and it generated $1.5 billion in cash. It is buying back shares, usually a sign that a company has more money than it knows what to do with.

Here is the comparison with the equivalent quarter last year:

	Q4 2010	Q4 2011
Creative and interactive	404.8	437.2
Digital Media	165.9	186.4
Digital Enterprise	273.3	342.4
Omniture	109.0	131.1
Print and publishing	55	55.1

In other words, all business segments grew – impressive in uncertain economic times. See this earlier post for a rough breakdown of the segments.

A couple of observations. First, Adobe is benefiting from the big trend in IT towards web, cloud and device. Many companies regard apps (as in mobile apps) as vehicles for marketing, and Adobe’s tools are a natural fit, with or without Flash. We are in a more design-centric IT world than was the case a few years back, driven by Apple, SEO (Search Engine Optimisation), and just because we can: technology now performs basic computing functions with ease so design becomes the key differentiator.

Adobe is nevertheless remarkable in the way it has managed the transition from print to digital. Few companies manage that kind of fundamental shift in their market successfully.

The other point that interests me is why Adobe announced a major change in its business model in November. Digital media and marketing will be the focus, while it winds down its enterprise development platform, as well as moving away from Flash and focusing on HTML5 for delivery.

Unless the announced figures disguise future problems that are only visible on the inside, this move was driven by bad results. Digital Enterprise, which includes the middleware business, increased revenue by 25% over the same quarter last year.

In 2012 the Digital Enterprise segment is being renamed Digital Marketing Solutions, expressing the company’s intent.

Adobe’s change of direction caught me by surprise, as it was not really flagged at the MAX conference the previous month, though there was evidence of struggle with regard to Flash versus HTML5.

I would describe Adobe’s moves as bold. Taking action ahead of when it becomes inevitable is a good thing, but there are significant risks. Adobe’s platform is all about synergies, and chopping off bits that still have a significant following may have unexpected consequences.

Another curious facet of Adobe’s move is that its normally excellent PR department has done little, as far as I am aware, to brief the press. Major news concerning what will be donated to Apache, or the discontinuation of Flash Catalyst, has emerged from sporadic reports instead. Normally that is a sign of a company under stress, rather than one which is about to deliver excellent results.

I guess this time next year we will have a clearer picture.