Adobe’s Record Revenue Proves Successful Business Transformation Is Possible
techcrunch.com
techcrunch.com
As a consumer, the cost of ownership is now slightly to significantly higher over the total lifetime of the software, depending on how often you upgrade. Cost aside, for me it simply doesn't "feel" right to rent software.
As a producer I've put my money where my mouth is. My companies software used to be purchase only (https://www.rackforms.com), though we did add a subscription model around the same time Adobe made the switch. However, I did not, nor will I ever, remove the customers ability to purchase outright.
Just because recurring revenue is good for me doesn't mean it's right for my users. In fact, my "purchase outright" option remains more popular.
I believe if Adobe actually gave users a choice they're data wold reflect mine. They've certainly lost me as a customer until they change course.
I checked out your site, and not sure if I agree with this. With your pricing a consumer using your product would only have to use it for 5 months before the self-hosted option becomes economically attractive.
To buy Photoshop CS6, alone, would cost $700. Adobe CC prices it at $9.99/mo - meaning you could use their CC option for 6 years before breaking even. In those 6 years, with CC you would get upgrades as well - OTOH even if you were to upgrade every 3 years, you wouldn't break even.
IIRC, Master Collection was $3,000, and is now $600/yr. Meaning if you bought Master Collection you would break even with CC if you only upgraded 5 times a year.
To make your analogy more apt, you should price your non-cloud offering at $600, and then compare how many people prefer it to cloud.
Personally, I think their decision to end their standalone offering had more to do with simplifying DRM than anything.
No doubt in my particular space other factors figure: For example, to run the self-hosted package requires a web server, a higher barrier of entry, perhaps, than just a machine capable of running Photoshop. It may also be that the cloud service provides a full hosting package complete with cPanel, phpMyAdmin, etc, negating the need to have a standard web hosting service.
I suppose my point is I try and make both packages a great value proposition from a price/feature standpoint. Believe me when I say my life would be easier if I only offered one, but in the end customer choice trumps all.
One reason why Adobe continues to make a lot of money is that Photoshop and Illustrator files are like what Word and Excel files are in businesses and universities: currency. People trade these formats around, which makes them way more durable. But that durability can't make up for a more important aspect of some software — especially creative software — whether or not people love using it. Go to the Affinity forums and witness the fire in people's hearts. I imagine there was a time when people felt that way about Photoshop. It's not that I want Adobe to fail. I just want great software.
All I'm saying is: don't mistake Adobe's ability to make money as a sign of love for its products.
http://arstechnica.com/information-technology/2014/01/quarkx...
Not sure why it's surprising at all that they have more revenue. It's not like the people who were using it can just stop using it; it'll take time for an true alternative to come up if there ever will be one.
CS6 (the last version you could purchase) is nearly 4 years old now. I didn't upgrade from CS3 (or 4?) until last year.
But (previously) virtually no one upgraded every year. The product was good enough years ago, and the features added were rarely more than minor improvements. People would buy the suite, and then use it for 3-5+ years.
With the new pricing, it's like you're forced to upgrade every 2-3 years.. so it's an accelerated upgrade cycle. And that's why everyone thinks of it as a price increase.
What some people want is pay once and be done with it. Ownership vs. Rental. When a consumer can afford to own but is forced into rental, then there's going to be resentment. If Adobe had offered a choice, then the number of complaints would be minuscule.
My work is a perfect example. I paid for InDesign years ago. Since I only use it for very occasional jobs, and semi-occasional hobby stuff, I don't need the constant upgrade cycle. Because I bought it, I don't have the sinking feeling of my wallet being opened every time I decide to start a new personal project.
Also, Adobe's customers were often prosumers, and the $1,500 price point for the product suite is much less appealing than $30/month. Any prosumer can afford $30/month for Photoshop, etc.
($1500/$30) = 50 months / 12 ~= 4.16 years. More than 4 years to break even, not including time-value of money.
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Edit: The actual prices are probably closer to the actual turnover for people upgrading Photoshop.
($1500/$50) = 30 months / 12 = 2.5 years.
($1500/$75) = 20 months / 12 ~= 1.67 years.
Affinity is certainly the world's best hope especially with Apple naming them some of the best apps available this year. In another year or two they could surpass Adobe for small shops but Adobe will still win for a long time because in business you need to hand off files to other people and other companies and they all use Adobe and you can't ask or expect them to use a new product like Affinity's offerings.
However, over time as more people test Affinity and there maybe a chance unless Adobe gets their act together.