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Nitro Acquires PDFpen from Smile

Mergers and acquisitions aren’t common in the indie developer universe around Apple, so I was intrigued when I heard that long-time TidBITS sponsor Smile was selling PDFpen to Nitro Software, a company specializing in PDF tools in the Windows world. After calls with Smile co-founder Philip Goward and Nitro’s chief product officer, Sam Thorpe, I have a better understanding of the situation.

Nitro was founded in Australia in 2005 but is now a publicly traded company headquartered in San Francisco with over 200 employees around the globe. Nitro’s focus has always been on PDF tools in the Windows world, specifically in the enterprise, where 75% of the documents moving through the organization are PDFs. Its research shows that only 30% of workers have the tools they need to manipulate PDFs, largely due to the cost of Adobe Acrobat Pro DC.

As Macs, iPhones, and iPads have become more prevalent in the enterprise, largely as a result of employee-choice and “bring your own device” programs (see “JNUC 2017: A Glimpse into the World of Apple Enterprise,” 3 November 2017), the need for Nitro to expand into the Apple world became apparent. PDFpen was an obvious choice, and both Philip Goward and Sam Thorpe emphasized how the deal was aided by the fact that Smile and Nitro have very similar corporate cultures.

PDFpen on multiple Apple devices

Nitro will pay $6 million in cash for PDFpen, and the entire PDFpen team will be joining Nitro. Sam Thorpe noted that Nitro was extremely interested in the team’s roadmap for PDFpen and appreciation of the nuances of developing for Apple-focused customers, so it seems safe to say that we shouldn’t expect to see significant technical or interface changes. The name will also remain the same, though likely with some Nitro cobranding. What may change eventually is the licensing model, with subscriptions being offered after a few more major releases. Along those lines, PDFpen will remain in the Setapp subscription service, and Thorpe noted that PDFpen revenue from that source was growing at a double-digit rate.

Where things will change is in the enterprise world. Nitro doesn’t currently have a solution for Apple users in the enterprise, and PDFpen isn’t a big player there now. So an enterprise version of PDFpen will likely take on the Nitro Pro name and will rely on a subscription model, like most other apps in the enterprise space. The recurring revenue generated by the subscriptions will help pay for developing the integrations with other systems—document signing, analytics, SDKs, and so on—that large organizations find compelling.

From Smile’s perspective, the PDFpen acquisition allows the company to focus on its TextExpander business, which has been growing in terms of employees and platforms. TextExpander now works on the Mac, iPhone, and iPad, plus Windows-based PCs and devices running Google Chrome. In contrast, PDFpen was limited to Apple operating systems, and the prospect of attempting to take it cross-platform was daunting for a company of Smile’s size, from both technical and marketing standpoints. By selling PDFpen to Nitro, Smile is essentially letting PDFpen grow in ways it would have had trouble doing on its own.

In the end, it sounds as though the acquisition is a win-win situation for everyone. Smile gets focus and money that it can use to build its TextExpander business, Nitro fills out its platform offerings in the enterprise space, and PDFpen users get continued support and development.

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Comments About Nitro Acquires PDFpen from Smile

Notable Replies

  1. One thing I’m afraid will happen is what usually happens when a Windows-centric software company acquires a Mac-centric software: the Mac software is used as a base to vastly improve the Windows software; the Mac software is then left twisting in the wind before it is terminated.

  2. I still remember TextExpander as the first app that went subscription only for me. They wanted me to pay 20$ or so a year for something I had paid 20$ in total and wanted to give me features I didn’t need. Why does anyone still use TextExpander?

  3. Not only an alternative to Acrobat Pro. Bought it ten years ago out of frustration with Preview’s unreliability from version to version, and value it highly.

  4. As a programmer it’s always astounding to me when I hear how many employees a company that consists of basically one program has. What are the other 195 of them doing?

  5. Agreed. PDFPenPro has been my go-to PDF manager for many years, and I always purchased the updates. I hope that your prediction turns out not to be true, but I’m with you: it’s certainly happened many times.

  6. Thanks for taking the time to get the story behind the headlines. It’s usually hard to know what to make of tech mergers, and this provides a lot of useful context!

  7. I believe many of the employees are joining Nitro, so maybe the new owners won’t screw it up?? Like Apple did when they bought Siri and thought the developers would do what they were told.

  8. The entire engineering and product management team is joining Nitro, so things should be pretty stable.

  9. I hate subscription apps. Leaves the user abandoned if/when the developer decides to bail out.

    For me the question of TextExpander, which I left when they went subscription, is why would anyone use that when Typinator is out there :wink:

  10. Bungie Halo!

  11. Hopefully they will not be turning PDFPen Pro into a subscription model. If so I will need to abandon the product and find an alternative as a individual user I avoid subscription models. Unlike businesses that can write off such subscriptions as a business tax, they are not tax deductible to individual and I choose not to be an investor or a stakeholder in the company for every application I use.

  12. If you use even a free piece of software, you become a stakeholder in the company that makes it (though not necessarily a particularly important one). Conversely, I don’t think you qualify as an investor in any of the streaming services, newspapers, or magazines that you might subscribe to, unless you have also bought shares in the company that provides them. So I’m not sure what the subscription model of paying for software has to do with being an investor or stakeholder (saying nothing about whether it’s a good model or not).

  13. When I purchase a subscription ot a streaming service, newpaper or magazine I am purchasing a service that provides information on an consistence reoccuring basis. When I purchase an App or program I am buying a product that aside from occasional changes (updates) remains stable that I use with my own data. I am of the opinion that I should not be paying a company on a frequent regular basis to insure that I can access my own data when I need to and that if I fail to pay, that data that I created is no longer accessable. The bottom line is that what you mentioned are services. PDFPenPro is a product that allows me to access and modify my own data and does not provide anything new or useful other than updates to the actual App which I can choose to do or not if it fails to offer any improvements that I need or can use over my current version. I also take exception to companies that release software with significant bugs, then expect users to be volunteer beta testers by submitting bug feedback without any compensation for their time and efforts so that companies can release fee based upgrades that are primary bug fixes with some minor user improvement in an attempt to justify the upgrade fee while profiting from the work of the volunteer beta testers instead of investing in quality SQA to insure that significant bugs are fixed before release of the product.

  14. This. An amazing sentence and THE primary reason why switching to or making a software product for individuals subscription-based implies a HUGE responsibility for the developer. Dev’s, seriously, decide whether you are up to it. Will you provide responsive service? Will you address shortcomings and fix bugs in a TIMELY manner?

  15. While I partially agree, even Apple does volunteer beta testing for many products, and they have lots of staff.

    Why? Because even with a whole team of QA people, software is extremely complex (yes, even PDF software – they have huge backend engines, and it often involves additional code to make things work or interoperate with other PDF software compliances).

    Hence why previous regular users are offered to beta test on a voluntary basis to help improve the product they will likely use on its final release. Yes, in an ideal world you’d be able to fix everything in house by paid staff, but that’s not the world we live in; resources are finite. So as its voluntary, and some people want to do it, why not? No one’s forcing people to volunteer, it’s an extra thing that can help users get a product that works better.

  16. At the risk of resurrecting a 9 month old discussion, I don’t think @jweil was referring to actual beta programs.

    I think he was referring to companies where their released software is only beta quality (meaning it hasn’t been sufficiently tested), relying on the subsequent bug reports to bring the code up to release quality.

    I don’t think any companies formally make decisions to do this, but sometimes it may seem that way, especially if a particularly nasty bug ends up in a released product.

    We’ve seen it from time to time with every software product and I’m afraid there really is no way to avoid it when we’re dealing with very complicated products like operating systems and office suites. At least not after major releases, where there have been major changes to the code’s internal design.

    Which is why I always recommend that people be extra careful before installing any product with version x.0.0 (meaning the first release after a major change). Either run it in an environment where you can afford to deal with bugs, or wait a while until the first round of bugs have been fixed (or at least well documented with acceptable workarounds).

  17. Thank your for your input on this issue. I was referring to what you stated. However I somewhat disagree on that they don’t do this formally. I believe they do by focusing on release dates that do not allow for sufficient testing and controlling expenses to increase profits but restricting testing and deferring bugs to future releases. Testing is one of the items that should be in the profit column instead of the expense column as quality and reliability of a product increase loyalty, testimonials, recommendations, and repeat business that cannot be measured on a spreadsheet.

  18. Well, at first glance, it appears our fears have come true. Today I received an “upgrade” offer from Nitro for the newly rebranded “Nitro PDF Pro Essentials.” The message offered 40% off but was otherwise completely silent on any new features or other changes. Clicking thru led to a purchasing page, which again offered no details or sales pitch. It gives me the feeling that Nitro just wants to be able to say they have a Mac client for their business customers who want one, and have little interest in selling to individual users.

  19. I was unaware that PDFpen had been acquired by Nitro until I tried to contact Smile support. Previously, if I encountered any issue, I’d send email to support and receive a thoughtful reply. This time, I received an auto-reply that directed me to Nitro, where I discovered that it’s impossible to contact support without a support contract. It’s not even possible to submit a bug report for free.

  20. I find it fascinating how strongly some users — at least among the self-selected TidBITS Talk forum contributors :smirk: — detest subscription pricing for software applications.

    While the first-impression comparison of a one-time payment versus a subscription obviously favors the former, I don’t follow that argument if some conditions are met by an application:

    a. It receives useful regular updates and bug fixes
    b. It continues to work if you cancel your subscription
    c. It, ideally, provides a useful service, such as cloud syncing

    To clarify point b., you will find plenty of subscription-priced applications that continue to work without restrictions when you stop paying; you just don’t receive any more updates, and any cloud services become read-only.

    Smile’s TextExpander, which some of you mention, actually makes a decent case-in-point: It’s seeing regular updates, most of which I find useful. Its cloud sync service is reliable and “just works.” And while I’ve yet to check whether TextExpander meets requirement b., the productivity gain I get from this applications on a literally daily basis, easily justifies the $40 annual price tag for me.

    Getting upset about their pricing scheme, and exploring and adopting “cheaper” alternatives, would probably cost me many times that fee. :thinking:

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