Software Innovation? or Death by a thousand cuts?

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Adobes’ announcement that they will be going to a subscription only model with their software, has taken some people by surprise (I’m one of them)

As a general rule I update my Adobe software every other year and was looking forward to upgrading to Version 7 of the creative suite applications.

There will not be a Version 7… instead you’ll get to pay for the privilege of using the software.

At this point it looks like the cost will be around $600 a year.

Which means that folks like me will no longer be able to budget / amortize the expense quite as efficiently.

I use Adobe products, and for the most part I like them. I’m not so sure about this new paradigm.

Each time I’ve upgraded software it’s cost me about $600 but that was amortized over a two or three year period, depending on the length of time between versions. I’ve been able to keep current for $200 to $300 per year, this was an expense I could easily justify.

The last version upgrade, I downgraded to a version of the Creative Suite that  contained only the applications that I actually use on a regular basis. I saved myself some cash and I was happy with what I got.

Now I’m on the horns of a dilemma. I can upgrade to Creative Suite 6, or I can sign up with the Adobe subscription service and have the latest greatest versions of all Adobe products downloaded from the cloud regularly to my computer.

Problem is, my yearly software costs will go through the roof. $600 for Adobe, (albeit the entire Adobe suite, much of which I don’t use) plus potentially $219 for Microsoft Office 365.

Yep, another subscription service which would update my version of Office in a fashion similar to the Adobe model. And then there’s the question of which of the other pieces of software that I’m dependent on will move to this subscription model.

My anti-virus solution is thankfully not one of the expensive options like Symantec, McAfee, or god help me, Intego. If you add the cost of most of these solutions at $100 to $150 per year to the current estimate of around $800 you’re up to almost a $1000 per year, just to use a computer that you own (and have to upgrade) with mainstream software.

$1000 a year to rent software? Is the price worth it?

Why does this feel like a drug dealer on the corner? (Hey man, come try this… for a year), then BANG, you’re selling sperm to keep the software activated so that you can finish a term paper or edit your resume.

I’m uncomfortable with this paradigm.

Given that installation of Adobe Products has in the past taken 2 to 4 discs and as long as 45 minutes, I shudder to think how long it will take to get a cloud installation over DSL link that resets every two hours.

I’m still digging through the FAQs on the Adobe site to find out what happens when / if you (or I) as a consumer decide to discontinue the subscription. Does the software degrade? Or does the software continue to work until the next time it phones the mother ship then self destruct?

This is of course a  wet dream of the software industry and the RIAA. When your license expires, is revoked, or you violate the terms of use detailed in the 800 page licensing agreement that you’ve never been able to fully read (You couldn’t get through War & Peace either.)  The offended manufacturer simply wipes the software from your computer without notice.

It was in the licensing agreement that we could remove our software from your computer, & you agreed to it.

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In a rather odd turn of events, Microsoft is pretty upfront about what they do.

If you should decide to discontinue Office 365, the programs degrade into a read / print only mode.

Essentially you can’t edit your document anymore but you can open it in view / print mode.

That’s reasonable I suppose but you’d never have that situation with the old model, where you had a version of the software on CD or DVD.

Which in the case of Microsoft are or will be available as a purchasable stand alone product, for however long that lasts.

My concern is that Adobe is creating a class of people who cannot afford to maintain a subscription. I myself have to think twice about the yearly cost. For a corporation this pricing model is nothing, it’s the cost of doing business.

But for a smaller one person operation, $600 per workstation just to have access to the software is a chunk of change. If Adobe was the only company doing this, it might be a tenable option. But all the costs add up when you factor in other main stream software subscriptions.

When does the burden of subscription pricing become too much for a small business to bear? $1200, $2500, $3000 per workstation, per year?

I guess time will tell, and the marketplace will decide what price it will bear.

I spoke to an Adobe representative about my options. A number of things about the conversation struck me.

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First and foremost was a seething arrogance on the part of the Adobe representative and to some extent Adobe that I personally found offensive.

Were I not already invested in Adobe products I’d have hung up and not even considered purchasing anything Adobe ever again.

The only reason that I continued the conversation was that I was learning a lot more about what’s happened to Adobe culture, and what they’ve become.

Sure this kid was 19 years old but it was very obvious that he’d drunk deep of the corporate kool-aid.

What’s become crystal clear in my opinion, is that Adobe really isn’t interested in the small shops. They believe that their profits will come from large companies, and that the upgrade fees from small shops are completely insufficient. Along those lines they’re probably figuring that the small users are costing Adobe too much in overhead.

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I’ve seen this kind of thinking before and Well… there’s a company in El Segundo that expanded to worldwide distribution, decided that the “little” contracts were too much trouble to deal with and who are now a few small offices on the fourth floor of a certain bank building.

Yet another example was on the eighth floor of a building in Irvine. They had custom woven carpets made for their new facility in the penthouse of that same building.

The company imploded before they ever made the move into their posh new penthouse digs.

Not because they spent money like drunken sailors but because of attitude.

I personally knew it was over when a principal of the company told our investors lawyers; “If investors can’t understand that we aren’t like other dot coms because we make a product, I don’t want their money.” and he didn’t get it…

All the investment firm was asking for was to drop the dot com from our corporate name.

3 months later he and all the rest of us were packing up our desks in the infamous dot com implosion. We had a product, it was ready to hit the shelves but there wasn’t enough money to get into production. By that time investors were steering clear of anything that ended in dot com.

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The Adobe representative’s cockiness reminded me of these companies. Adobe may very well have grown beyond itself.

I’m also reminded of Borland, Aston-Tate, AST Research, Data Products & Lucent. All great companies in their time,  all gone, or anorexic shadows of themselves.

The 19 year old doesn’t have my perspective. He couldn’t see the wry smile on my face and couldn’t understand that when he thought he was winning he was actually losing.

I was silently running through comparisons of what I actually need and what Adobe provides. I can replace Adobe functionality with other products.

It’s not my first choice, but I can do it.

I’m thinking I’ll upgrade to Creative Suite 6 and then, in a couple of years we’ll see what happens. Hell I might even drink the kool-aid for a year just to see if the {queue angelic chorus} cloud is worth it.

I understand the reasoning behind companies wanting to move to cloud based distribution. It’s cheaper!

No packaging, no CD/DVD manufacturing, and if you release a piece of crap, you can fix it live, instead of having to send out physical media.

The darker underbelly is that you don’t need as many testing folks, because your customers are now testing your product for you. Microsoft has been doing this for years…

If Adobe really is focusing on larger corporations and trying to effectively price the small / single users out of the market, then it’s a pretty sure bet layoffs are imminent at Adobe.

My logic is this, fewer customers requiring technical support, means that Adobe needs fewer technical support personnel,  & fewer sales people. Ergo profits at Adobe can be maximized by cutting un-necessary personnel. I’m old, cynical, and jaded… And so are the executives at Adobe & Microsoft!

The 19 year old seems to believe that Adobe is too big to fail. Who can blame him, he’s young and impressionable. He’ll probably be crying in his Red Bull inside a year, but that remains to be seen.

I’m curious about just how many other customers are not happy about this new direction. How many will do the math, and think there has to be a better way?

How many will update to Creative Suite 6 then batten down the hatches waiting for the pricing model to get reasonable, the cloud to fail, Adobe to backtrack, or alternative and highly competitive products to be available?

I wonder if saying “I used to work at Adobe” will be answered with “Oh good company” OR “Oh sorry man”

Time passes & the computer industry eats it’s wounded.

2 Replies to “Software Innovation? or Death by a thousand cuts?”

  1. I saw the changes by Adobe yesterday and was thinking on the one hand it is great because I will “Always” be assured of the latest and greatest. On the other hand what if it requires a constant connection and I am working offline? What happens when the cloud is down (trust me it can and does go down). I know that they will allow you to install on 2 machines which is great if I have a laptop and desktop. However, I would really like the ability to be able to pick and choose what I want.
    Adobe is not to big to fail, sorry to burst everyones bubble. Adobe has already downsized their operations and gotten rid of entire lines can we say FLEX.

    1. You don’t need a “Hot” connection to use the applications. One really nice thing is that the ENTIRE Adobe Master Suite is available and can be downloaded to your local machine. It only needs an internet connection (According to the young man I spoke with) once a month.

      You can in fact pick and choose the applications that you want and leave the rest. (Again according to the Adobe rep) I think that it’s really cool, what concerns me is, what happens if, after I’ve created a chunk of content and then choose to discontinue my subscription?

      That is one thing I couldn’t find an answer to.

      I decided to purchase CS6 and think for a few weeks about the subscription. I can say that CS6 is faster than CS5 on my machine.

      I’m like you, thought “what happens if the cloud breaks and I’m downloading something? or if it’s that time of the month and the Applications can’t establish contact with the Adobe Cloud?” Do they disable?

      Too many things unanswered right now to be completely dependent on cloud alone.

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