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When Captivate is installed on your (the developer's) system, it's installed with all required software for it to work. It does need a version of Flash Player on the system in order to Preview files in a browser.
Does your IT department allow end user browsers to have the Flash Player plugin? If not, there is little point worrying about installing and using Captivate if your end users aren't going to be able to view Cp content anyway because their web browser can only view HTML content.
If one substitutes WMV for flash video files and the captivate file is exported to pdf, what are the limitations? I do find it odd that it would appear that little is being done by local Adobe offices to educate/persuade IT departments to incoprorate Flash especially as Acrobat X is widely advertisied. It is surprising how many corporates are still sitting on AcroReader 6 and 7. I do realise that corporates do not want their staff browsing Youtube however this does mean that we are forced to find 'Microsoft friendly'' software which is a bit of a jolt having gone through a trial vrs 5 and getting excited about the prospects.
Not sure you really do want another answer, just want to tell you that Cp-produced PDF is fully functional, with interactivities and (for 5.5) even reporting possibilities to LMS, acrobat.com and internal server. But you need at least Acrobat Reader 9. first version that has Flash player embedded. I did not want to propose this, because you mentioned that Flash couldn't be upgraded, but Acro Reader could?
The pressure to get IT departments to start using more recent versions of FREE software like PDF reader and Flash Player should be coming from Adobe but from the people that pay the IT department's wages. If you company execs don't seem worried about living with the limitations of older software, then neither will the IT department. As soon as they start changing software versions something will break or some app will fail and they will get blamed. So typically IT will just sit on its hands while the system is stable. They will do nothing to jeopardize their own position.
So you need to be talking to people ABOVE the IT dudes.
As much as I love Adobe products and champion Premiere over Final Cut Pro, I don't have the time to evangelise. Not my job. I'm not a company exec - we are content suppliers and our clients ( company execs) are not going to buck IT when they say 'ok but we won't guarantee the integrity of the system.' It's a Microsoft decree.
Having sent Flash movies to companies in the USA such as EY and IFAC, I note that they also do not allow Flash on their systems so obviously they have the same restraints.
In conclusion I gather that the situation then would be to have computers in isolation or an offline training environment. I have created an multimedia captivate document in Acrobat 9 (thanks Lili) with legacy media as well as flash and will post results. We shall be running the test at on one of our national banks' IT systems where we get stuck.