Microsoft employees love Figma, and it’s testing the company’s cozy relationship with Adobe


Dylan Field, co-founder and CEO of Figma, speaks at the startup’s Config convention in San Francisco on May 10, 2022.

Figma

Microsoft and Adobe have been pleasant bedfellows for many years. Microsoft’s dominant PC working system has been the gateway for Adobe to achieve hundreds of thousands of enterprise customers with its design software program.

The corporations’ CEOs even attended the identical highschool in India, and each moved to the U.S. in the Nineteen Eighties for graduate faculty in pc science. They share a typical bond over the profitable transition from desktop software program to the cloud.

But inside Microsoft, an rising problem to Adobe is catching hearth and elevating questions on the way forward for considered one of the tech business’s most intimate relationships.

Figma, a San Francisco-based startup that celebrated its tenth anniversary in August, is being utilized by tens of hundreds of employees inside Microsoft and, for a lot of, is at the coronary heart of their day by day work. The variety of customers has steadily elevated in recent times, although neither firm will say what number of of them are editors with paid accounts.

The cloud-based design software program got here in the door in 2016, when Microsoft acquired cellular app growth platform Xamarin and introduced in a 350-person workforce that, months after the deal closed, would grow to be Figma energy customers. The product has since grow to be so central to how Microsoft’s designers do their jobs that Jon Friedman, company vp of design and analysis, stated Figma is “like air and water for us.” It’s additionally utilized by engineers, entrepreneurs and knowledge scientists throughout Microsoft.

“Figma’s grow to be, I might say, form of the No. 1 frequent software we use to collaborate throughout all of the design neighborhood in the neighborhood and past,” stated Friedman, who’s labored at Microsoft for over 18 years. It’s “actually nice at serving to us collaborate at scale, and at world scale. I can collaborate with groups we have now in India, China, Europe, Israel and Africa.”

Venture traders have been all in on the development.

In June 2021, throughout the heyday of mega financings, Figma was valued at $10 billion in a funding round that included participation from Morgan Stanley’s Counterpoint Global. That was earlier than the 2022 market plunge despatched many cloud stocks down by greater than half and largely halted pre-IPO rounds.

Figma hasn’t introduced plans for a inventory market debut, and shareholders aren’t urgent for one anytime quickly, largely as a result of the marketplace for new choices has dried up this yr.

The firm, backed by the likes of Index Ventures, Greylock Partners and Kleiner Perkins, now has the measurement and development trajectory to land solidly on the radar of public traders. Annualized recurring income has greater than doubled in consecutive years and is poised to high $400 million in 2022, based on folks with information of the company’s financials who requested to not be named as a result of the numbers are confidential. Figma’s workforce has swelled to 800.

While Microsoft has served as a development driver for Figma, spending hundreds of thousands a yr on its deployment, the company’s software program has additionally taken off at Google, Oracle and Salesforce, the place it began small and grew organically as followers touted it to their colleagues. Other prospects embrace Airbnb, Dropbox, Herman Miller, Stripe and Twitter.

After Figma founder and CEO Dylan Field tweeted earlier this month about the firm turning 10 years outdated, he obtained flattering responses from Salesforce co-CEO Bret Taylor and Atlassian co-CEO Mike Cannon-Brookes. Taylor began his response with, “I [heart emoji] Figma.”

For Figma, getting traction inside massive corporations, notably inside Microsoft, has required going head-to-head with Adobe’s competing XD program, and successful its fair proportion of offers. That doesn’t suggest the market has utterly flipped, or that Adobe is being absolutely supplanted.

“We’re nonetheless heavy on Adobe Illustrator, Photoshop and XD,” Friedman stated.

Adobe and Microsoft have labored collectively for more than two decades. In addition to Adobe gaining ubiquity by distributing throughout Windows machines, the two corporations have been syncing their merchandise in desktop, cloud and cellular computing, with over 50 integrations listed on Microsoft’s web site.

Penetrating that alliance has not all the time been easy for Figma. In 2016, Microsoft acquired Sunrise, a startup with a preferred calendar app. The Sunrise workforce relied on Figma and continued to make use of it after the deal closed.

Sunrise co-founder Jeremy Le Van stated his employees had been amongst the fortunate ones at Microsoft. He stated some Microsoft staffers weren’t ready to make use of Figma due to the enterprise relationship with Adobe and had been caught utilizing merchandise comparable to Photoshop and XD. Despite government resistance in sure departments, some designers snuck out of the Adobe ecosystem to make use of Figma anyway, stated Le Van, who stayed on as a design director at Microsoft till 2018.

Friedman stated he wasn’t conscious of examples of Figma being shut out. “We have an important relationship with Adobe as nicely and love their merchandise for a lot of use instances at Microsoft,” he stated.

The identical yr of the Sunrise deal, Adobe stated it will make Microsoft’s Azure its most popular cloud for Creative Cloud, in addition to the Marketing Cloud and Document Cloud. To mark the event, Microsoft CEO Satya Nadella and Adobe CEO Shantanu Narayen, who each went to highschool at India’s Hyderabad Public School, appeared at Microsoft’s Ignite convention for IT professionals below a banner declaring that Adobe loves Azure.

‘We each wished it’

Figma’s collaborative capabilities are central to its recognition. Multiple editors of a doc can see each other working in actual time, and non-editors can view designs and go away feedback. Companies pay for Figma primarily based on the variety of editors they’ve for his or her information.

“Any designer, product supervisor or engineer can soar in and see the design system at play in any specific product,” Friedman stated.

Last week, Figma launched a version of its service that folks can use in Microsoft’s Teams communication app, eradicating the have to open a browser tab.

“We each wished it,” stated Field, who began Figma after scoring a Thiel Fellowship, which got here with a $100,000 grant from enterprise investor Peter Thiel on the situation that he drop out of faculty (Brown University) and pursue a brand new challenge.

The Teams integration is a software that advantages any consumer of Microsoft merchandise, not simply employees. Adobe, which provides Teams apps for Acrobat and Creative Cloud, is aware of all about the energy of tying into the Microsoft ecosystem. It’s been an enormous a part of the company’s success in its 40-year run as much as virtually $17 billion in annual income.

Figma needed to begin small. Like many organizations, Microsoft started utilizing it without cost. Today, a buyer pays Figma every month primarily based on the quantity of people that make adjustments to information, whereas a extra restricted model of the service is on the market for gratis.

In 2017, a yr after the Xamarin acquisition, Field hosted Friedman at his company’s San Francisco headquarters. Field says he remembers asking Friedman why Microsoft did not wish to hold utilizing the free model of Figma.

“‘Look, we’re all frightened you are going to die as an organization,” Field recalled Friedman telling him. “We cannot unfold it inside Microsoft as an organization although we prefer it, since you’re not charging.”

It wasn’t nearly holding Figma alive. As a big-spending buyer, Microsoft was in place to begin asking for extra options.

A workspace inside Building 21 at the Microsoft campus in Redmond, Washington, on March 3, 2022. Microsoft Corp. has begun calling employees again to its headquarters in current weeks, however its return-to-office technique hinges on hybrid work.

Chona Kasinger | Bloomberg | Getty Images

Field stated Microsoft’s suggestions led to a number of enhancements. For instance, Figma engineers labored to make it simpler to maneuver from display to display in a single Figma file. The firm additionally added assist for enter from Xbox recreation controllers and made prototype previews work quicker on cellular units.

Ultimately, Microsoft’s requests helped Figma develop its top-tier enterprise plan, Field stated, including to the free model and paid month-to-month premium packages that vary from $12 to $45 per editor monthly. The enterprise package deal runs at $75 per editor and consists of devoted account managers and superior password administration.

Václav Vančura remembers when issues had been very totally different.

Vančura was a senior designer at Xamarin, whose software program helped corporations construct Android and iOS apps with Microsoft’s C# programming language.

When Figma announced its launch in late 2015, Vančura was impressed with the company’s thought for shared design element libraries. He signed up for a preview launch and obtained entry in the summer season of 2016. He inspired his colleagues to leap on board, beginning with David Siegel, Xamarin’s head of design.

Vančura and Siegel encountered snags whereas sharing information from design competitor Sketch. After one Xamarin worker uploaded a file to a Dropbox folder, their teammates generally struggled to get it operating on their computer systems, both as a result of they did not have the proper fonts put in or as a result of they’d totally different variations of the software program.

Unlike Sketch, which was solely out there on MacOS, Figma was on the browser. That meant fewer sharing points. You grant others entry by copying a hyperlink or getting into their electronic mail addresses, identical to in Google Docs. But efficiency was an issue.

Vančura made advanced designs in Figma, inflicting the software program to decelerate, freeze and crash. The Xamarin staff despatched Vančura’s information to Figma engineers, who made Figma speedier and extra steady.

In 2017, Vančura flew from the Czech Republic, the place he lives, to Seattle, and then made the brief trek to Microsoft’s headquarters in Redmond. He took the alternative to indicate Figma to his workforce, lots of whom had been accustomed to working in Photoshop and Illustrator.

“It was superb. It was like watching Formula 1,” Vančura stated. “There had been so many mouse tips about the display, and everyone designed one thing, even when it meant they had been pasting GIFs or drawing rectangles. All of them had been so blown away. I believe that was the second these folks found out this was an enormous time saver.”

Gaining traction

Siegel, who had grow to be Microsoft’s head of design for developer companies, wished to get the phrase out extra broadly that Microsoft was evolving and wasn’t caught to its outdated remoted methods. In 2018, he posted a manifesto of types on-line.

“We use PCs, Macs, Figma, Sketch, GitHub, JavaScript, ZEIT, and different trendy instruments to design, prototype, and construct the way forward for software program growth,” Siegel wrote on Xamarin’s web site. There was a hyperlink to a Figma file that Microsoft employees might open.

The web site reached the entrance web page of Hacker News, a dialogue board for software program builders.

“This is a few unbelievable self-awareness,” one commenter wrote.

Soon after, Benedikt Lehnert, a Microsoft product design director, advised Friedman that the firm wanted everybody on the identical program, whether or not it was Figma or XD. Microsoft selected Figma, Lehnert stated.

Scott Belsky, chief product officer and government vp for Creative Cloud at Adobe and then a enterprise associate at Benchmark, speaks onstage at the TechCrunch Disrupt convention in San Francisco on Sept. 13, 2016.

Steve Jennings | TechCrunch | Getty Images

Vančura stated that at Microsoft, “Figma unfold throughout the firm so quick that I do not assume Adobe was even in a position to catch up.”

Figma is not shy about going up towards an business heavyweight. On its website, Figma says, “Don’t sync to the cloud with Adobe XD. Work in the cloud with Figma.” It asserts that designers are transferring away from Adobe’s Creative Cloud bundle, the product that accounts for 59% of Adobe’s revenue.

in 2020, Adobe added Figma to the checklist of opponents it publishes in its annual report.

Analysts have raised questions on Figma to Adobe executives on no less than three events this yr. Alex Zukin of Wolfe Research requested throughout a January fireplace chat with Adobe executives Scott Belsky and David Wadhwani if Figma was taking market share.

Belsky, Adobe’s product chief and government vp for Creative Cloud, did not reply the query immediately. But he acknowledged that enterprise capitalists have been funneling cash into the house.

“It is thrilling that VCs see the identical factor we’re seeing,” Belsky stated. “Five-plus years in the past, you did not see any materials {dollars} going into the inventive instruments. I assume now everybody sees that.”

Belsky stated Adobe can benefit from a possibility to carry Creative Cloud to the net, which it’s performed for Illustrator and Photoshop however not XD, a product that was launched in preview in 2016.

An Adobe spokesperson declined to speak about plans for an internet model of XD, and stated the firm will speak about plans for Creative Cloud at its Max convention in October.

“We don’t see an impression to the Photoshop enterprise ensuing from gamers in the product design class,” the spokesperson stated. “We developed and have advanced Adobe XD to deal with the wants of our core design prospects, who’re designing advertising experiences for screens, relatively than the distinct class of product design and growth.”

Many challenges

Still, the strain on Adobe is intensifying.

In the previous three months, Figma’s app for iOS units has constantly ranked above Adobe XD in the graphics and design part of Apple’s App Store, based on figures from Data.ai, previously generally known as App Annie.

Wells Fargo analyst Michael Turrin stated Figma has potential to increase.

“What Figma is making an attempt to create is extra of a broader platform that might grow to be extra of a system of file inside this market, and that is why I believe this might grow to be extra essential,” he stated.

Figma is not the solely upstart in the house making waves. An open-source different known as Penpot, which might routinely generate the underlying supply code for designs folks make in the software program, can be gaining momentum.

Microsoft employees are utilizing Penpot and have contributed to it, stated Pablo Ruiz-Muzquiz, who co-founded the challenge. Of the individuals who take a look at Penpot, virtually 20% are coming from Figma, he stated.

Penpot’s code lives on GitHub, which Microsoft owns, below an open-source license, permitting folks to obtain the code, modify it and run it on their very own servers. That’s not true of Figma, which retains its personal supply code personal.

But Figma is evolving. One job description suggests Figma is contemplating a major replace to its iPad app that would supply an area to make new designs and not simply view or share them.

And Figma has been busy increasing its government ranks. In June, the firm promoted Praveer Melwani, its head of enterprise operations and finance, to the finance chief place. The subsequent month, former Deutsche Bank and Goldman Sachs government Kate DeLeo joined Figma as vp of investor relations and enterprise operations.

As the firm marches towards an eventual introduction to Wall Street, getting extra out of its relationship with Microsoft presents a possibility for development. Expanding the variety of methods Figma will get used is one avenue.

“It works nice as a presentation software,” Friedman stated.

Figma in all probability will not ever change Microsoft’s homegrown PowerPoint software program or Adobe’s PDF format, however Field stated his product boasts distinct benefits. For one, Figma avoids the downside of the continuous back-and-forth emailing of a presentation by letting folks merely share a hyperlink.

“I’d be shocked if there is no salespeople at Microsoft that use it. My guess is there’s some,” Field stated. “Is it vital? No, in all probability not.”

Not but, anyway.

WATCH: Adobe CEO reacts to Q1 earnings: Our fundamentals continue to be extremely strong



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