Three years ago, Adobe was a desktop publishing company heavily invested in proprietary tools. It had great desktop image publishing software with Photoshop, top-of-the-line rich content creation for the web with Flash and good and accessible document sharing for the desktop with Adobe Acrobat.

And then Steve Jobs decided to wage a war on Flash. And in a testament to how fast things can change in the IT world, Adobe suddenly looked to be in trouble: an aging software company that didn’t have a cloud solution, wasn’t doing anything for mobile media creation and didn’t have any out-of-the-box solutions for creating mobile apps. Everybody else seemed to be moving data to the cloud, writing mobile applications that were far more interactive than anything previously available and moving on from static web content on the desktop to richer desktop-like web applications.

For a while, Adobe seemed to flounder. Like any company faced with the innovator’s dilemma, it tried to double down on its roots and extend its older software in ways it had never been written to do. Around three years after Adobe promised to port Flash over to mobile devices, it finally had a version that worked “well enough”. But after harping on the “open” bandwagon for quite a bit (with partners who seemed to support it half-heartedly no less), somebody at Adobe finally took a long, hard look at the Steve Job’s letter in which he summarizes everything that’s wrong about Flash (and about Adobe).

And the new Adobe is awesome. It’s a company that has woken up to what it does best: create great tools for web (and mobile) developers. Dreamweaver 5.5 significantly improves HTML5 support, works with mobile browsers and supports jQuery out-of-the-box. Adobe picked up some nifty technologies along the way too: it acquired Nitobi, makers of the top-notch Phonegap application that gives it a great foothold in mobile webapp creation (which in a stroke of genius, it then promptly submitted to the Apache foundation and ensured proper stewardship and great continuity). A similar Typekit’s acquisition gave it a commanding position in the web type foundry world.

The turnaround point probably came with the announcement to ditch Flash for mobile devices. That took serious balls and it was from an Adobe coming to the realization that it had to give up the Flash empire. But John Nack puts it really well here:

“When the oak is felled the whole forest echoes with its fall, but a hundred acorns are sown in silence by an unnoticed breeze.”

And those acorns are starting to sprout. Adobe has great new HTML5 development tools in the works, a growing community around web standards, and software that’s looking great on the mobile, desktop and on the web.

But most importantly perhaps, with today’s Creative Cloud offering, Adobe has shrugged itself off its desktop software roots. A more accessible subscription model means that customers used to paying less than a buck for an app will find Adobe’s pricing much more palatable now. And it’s working to innovate on the cloud as well, offering a full suite of creation, storage, sharing and publishing tools.

Adobe is poised to do great stuff. Happy for them!