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Andy Brice
Successful Software

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Jonathan Matthews
Creator of DeepTrawl, CloudTrawl, and LeapDoc

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BreezeTree Software

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Patrick McKenzie
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Adobe switching to subscription model

"Adobe is introducing a subscription model for many of its most popular programs, including Photoshop and Dreamweaver....From next month, continuing access to the programs, either individually or as a whole, will demand a monthly fee. Standalone versions will still be available but will not be upgraded. "

http://www.bbc.co.uk/news/technology-22432171

I wonder if other big companies are going to move their desktop software to a subscription model?
Andy Brice Send private email
Wednesday, May 08, 2013
 
 
Interesting topic. Reminds me of the discussion of the Windows online authorization started with Windows XP release which also was heavily discussed and turned into commidity meanwhile.

Adobe solves several issues:

* Software piracy is a matter of the past -> More revenue

* Updates are better enforced -> Less support issues

* Only one current/common software version has to be supported -> Less support cost

* Ideal usage tracking/analysis

It's appealing for Adobe and it will cause some headache for admins which need to open their network infrastructure -> Security issue

We would love to instantly follow Adobe here.

However, the most challenging part is psychology. I  can't explain or justify why this is, but it "feels" strange to rent software for me. People want to *own* things.
Michael S. Send private email
Wednesday, May 08, 2013
 
 
>Only one current/common software version has to be supported -> Less support cost

Just because they are charging per month doesn't mean they will necessarily force people to download updates more often.
Andy Brice Send private email
Wednesday, May 08, 2013
 
 
Maybe they won't force people to download updates more often but I think they could legitimately say that besides supporting the update mechanism if it's broken, they'll only provide support for the latest version.

I would assume this would make it much easier to get support staff up to speed as they wouldn't need to know about potentially years of legacy software.

For me as a consumer I might be slightly peeved if time was tight but ultimately would accept that I need to be on the latest minor version to get support, maybe I'd even be forced to upgrade (and get bug fixes) before talking to a real person.

One thing not mentioned in the article is that this potentially moves Adobe software from capital investment for a department to a monthly overhead (perhaps even from petty cash?). Seem smart to me.

If they can pull this off I think it's a good move for them & I don't think it's bad for the software industry either - having a big player warm people up to another payment model means hopefully soon enough it'll become a viable option for smaller players.
Jonathan Matthews Send private email
Wednesday, May 08, 2013
 
 
Or encourage a mass exodus to open source...

Why pay every month for Adobe Photoshop when you have Gimp, for example? The usual 'better known by the industry' and such could easily fall away if more people and organisations move towards software that *doesn't* rape their wallet every month.

Services, that happen to be online software, I can understand.

THere's nothing service-like about photoshop, unless they're going to do the projects for me?

If piracy is a problem for Adobe they might want to revisit their pricing model?


AC
Reluctantlyregistered Send private email
Wednesday, May 08, 2013
 
 
I agree with Jonathan, this move is good for software industry in general. I have been long thinking about implementing a subscriptions model for our B2B software. With proper implementation it is a win-win situation for both vendor and the customer.

Advantages from vendor's point of view:
- Steadier cash flow
- No need to maintain multiple major version development branches
- Less piracy.
- Less legacy support issues.

From customer's point of view:
- No need to pay large sum upfront. Especially so if you need to use the software for a short period only.
- Constant flow of new features, no need to wait for major upgrades.

Yes, there are disadvantages too, it is not all rosy.
B2B Send private email
Wednesday, May 08, 2013
 
 
Jonathan makes a good point regarding the accounting factor (i.e. trivial monthly cost vs capital expenditure).

This will likely open up the market to more potential users, as there are a lot of people who can pay $50 a month, but can't/won't pay $1000+, even though $50/month will eventually be more than the one off cost.
Scorpio Send private email
Wednesday, May 08, 2013
 
 
Must just take issue with the suggestion that the Gimp is an alternative to Photoshop. The Gimp has only a tiny, tiny subset of the features in Photoshop. It's also slow, clunky and counter intuitive to use. I would honestly rather use  http://pixlr.com/editor/ than the Gimp if forced to make a choice.
Andrew Gibson Send private email
Wednesday, May 08, 2013
 
 
I'm somewhat doubtful it's going to solve any piracy problems.
Tony Edgecombe Send private email
Wednesday, May 08, 2013
 
 
Many desktop software makes should heartfully thank Adobe.

If Adobe is successful, it would become so common and familiar to buy a subscription instead of outright purchase that any small software maker could do that and the customer won't even blink.
Vladimir Dyuzhev Send private email
Wednesday, May 08, 2013
 
 
It is going to help with casual piracy when serial keys are simply shared.

It will also help against crackers. Suppose new releases are made monthly or even weekly instead of once in 2 years. The crackers will probably need to spend time to crack each new version.

If Adobe requires that certain features are only available when your application is online (like some computation requiring cloud resources) then that makes it more difficult to provide a crack.

Make it difficult enough and a lot of crackers will give up and look for easier and more stable targets.
B2B Send private email
Wednesday, May 08, 2013
 
 
>Make it difficult enough and a lot of crackers will give up and look for easier and more stable targets.

If only. The harder it is the more kudos they get from their peers. See:
http://successfulsoftware.net/2011/04/07/interview-with-a-cracker/
Andy Brice Send private email
Wednesday, May 08, 2013
 
 
> The harder it is the more kudos they get from their peers.

But it is not harder. It is more tedious -- one have to repeat the same work every month, with no end in sight. Where's the fun in it?
Vladimir Dyuzhev Send private email
Wednesday, May 08, 2013
 
 
Not if they patch the exe.
Tony Edgecombe Send private email
Wednesday, May 08, 2013
 
 
It's the trend towards "Software as a Service" that the big technology companies are determined we should all adopt.

The other news story that caught my eye today was SAP ( at  completely the other end of the spectrum ) moving to a model where it hosts it's software and supplies it as a service to its corporate clients.

The whole PaaS/IaaS/SaaS thing has a fells like it has certain air of inevitability about it.

I also find it hard to contemplate not "owning" the software I've paid for but then again maybe that will pass in time.

After all I am quite happy to rent a DVD ( or stream it ) rather than buying a copy outright.
TomTomAgain Send private email
Wednesday, May 08, 2013
 
 
As the consumer move to small and cheaper apps (from apps stores) the software for professionals will tend to be more expensive and rented as a service. If you use the software every day in your work, you can easily afford it.

I still doubt that Adobe can apply this model now. I think people are happier with cheaper apps with faster and cheap upgrades (like OSx)
edddy Send private email
Wednesday, May 08, 2013
 
 
With Photoshop it may be hard -- people are using it every day, and that calls for a purchase.

But with smaller, specialized, applications that a designer would only use may be once or twice a month, it may work. The designers wouldn't buy it for that one/two times use -- they can do the same with say Photoshop in just somewhat longer time.

But if it is rented for a pocket change, this makes it reasonable to rent the software.

I'd even say it may become reasonable to rent it for a day for a few dollars to do the task. I recently stumbled into a niche where a particular activity has to be done may be two times in a year, but each time it is an enormous pain, and no cheap software exists for it. I'm considering what it takes to implement a daily rent SaaS where the use of the software can be bought for a day or two. (Competing packages do 1000x more, but cost thousands of dollars).
Vladimir Dyuzhev Send private email
Wednesday, May 08, 2013
 
 
> Or encourage a mass exodus to open source...

> Why pay every month for Adobe Photoshop when you have Gimp, for example?

Come on. Be serious.
Jeremy Morassi Send private email
Wednesday, May 08, 2013
 
 
> Many desktop software makes should heartfully thank Adobe.

> If Adobe is successful, it would become so common and familiar to buy a subscription instead of outright purchase that any small software maker could do that and the customer won't even blink.

This. 1000 times this. If Adbobe (and maybe a few other big ones) can re-educate customers to accept the subscription model this will be good for all mISVs out there.
Jeremy Morassi Send private email
Wednesday, May 08, 2013
 
 
First, realize that everyone in the world who is likely to purchase $1000 and up licenses for full blown versions of Photoshop or Dreamweaver has already done so, at least once.  But Adobe needs your money today and tomorrow, not just yesterday.  The same applies to Office 365, by the way.  Adobe can't add enough new features to Photoshop to convince users to pay for upgrades, and the current product still costs real money to support, so Adobe had no choice.

So, if you are a mISV with millions of users who have already paid you lots of money for lifetime licenses, and you have run out of ideas for new products, by all means copy what Adobe is doing.  Now Adobe could cut its losses by cutting all support, but there is no revenue in that, and there are still executives who need to be paid.  The subscription model is a great idea, the only possible downfall is if the current product is good enough to be used for the next 5-10 years without bug fixes.  I'm sure Steve Ballmer thanks God every night for the Office Ribbon and Open XML.  (along with an extra something for Microsofties who missed a few bugs in tens of millions of lines of code and will continue to drop a few new ones in from time to time)

So, if you are a mISV, but your circumstances are different than Adobe's, what should you do?  You have sunk costs to develop and market your software, how long do you wait to recoup those costs with a monthly or annual subscription?  What if your customer realizes after a while that he or she doesn't need your software anymore, or there is something better out there, and drops your subscription before you have recouped all of your costs?

Now, if it costs you next to nothing to develop your software, you might be able to recoup your costs in the first couple of subscription cycles.  Of course, if it costs nothing to develop, then that is what it is worth, and you have to convince customers to pay for a subscription to use something that is worth even less than the subscription price.  I call that fraud, you might call it something else.

Actually, why did users buy lifetime licenses in the past, anyway?  Because they had unlimited confidence in the quality of the software?  No, it was to obtain a higher perceived value for their money.  For starters, the highest perceived value for software is what it can do now, not at some point in the future.  I don't want to pay a subscription so the developer can continue to improve the software, I am willing to pay the full price up front to get software that does what I need it to do right now.

Then there is the question in the user's mind of how to get full value once the software is purchased.  If we only use it once, but paid a lot for it up front, that's not such good value.  But if we know we can use it as many times as we want,  eventually we will get our money's worth (and more).  Flip that around to a subscription, and once the user feels they have got their money's worth, they cancel the subscription.  Do you keep paying for a newspaper subscription when you no longer bother to read it, in case you wake up one morning and decide you want to read a newspaper again?

"If Adbobe (and maybe a few other big ones) can re-educate customers to accept the subscription model this will be good for all mISVs out there"
You don't have to re-educate users, if your software does what they want it to do, and they only have to buy it a bit at a time, that's what they will do.  Adobe (and Microsoft) have a different problem in that they already have been paid for their software, but don't have anything new to sell.  Be very careful of what you wish for.
Howard Ness Send private email
Wednesday, May 08, 2013
 
 
One more thing (and I won't be quite so long winded).  I sold newspapers before I finished high school.  A newspaper is worse than fresh fish, it spoils in less than 24 hours.  Newspapers print corrections (bug fixes), but that's just to appease anyone offended by the mistake.  No one re-reads a newspaper after corrections have been made.  No matter how you pay for the newspaper, you only get value from it once. 

You can pay $1.50 up front for a same-day newspaper at a box or news stand and you have to pick it up and transport it yourself.  Do this a couple of times and you will be ready to pay some kid $6 a week to have it delivered to your door.  Both you and the kid get tired of finding small bills every Saturday at supper time, so you get a subscription and pay the publisher $58 every three months. 

If you couldn't get daily delivery, you would be happy to pay $1.50 at the news stand every time Kennedy got shot.  With a subscription you pay the publisher the same amount of money as if Kennedy got shot 10 times a month (allowing for the paperboy's commission), and you think it's a good deal because you are paying 65 cents a copy and you never have to get out of your car in the rain or show up late for work because the newspaper boxes in a 10 block radius were sold out.  Meanwhile the publisher gets its ads in front of you as if Kennedy got shot every day (actually you pay more attentions to ads on the days when he doesn't get shot, so this is even better for selling advertising).

The newspaper business is nothing like the software business.  So find a better business model for your software business.
Howard Ness Send private email
Thursday, May 09, 2013
 
 
Come on. Be serious."

If people have to rent Adobe then I suspect OS projects, including Gimp, will indeed become more serious.

Heck, even WoW is losing customers to free competition:

"While the game's quartet of official expansions have done a good job keeping gamers coming back, increased pressure from a wealth of free-to-play online competitors -- not to mention a shaky economy -- have made the game's subscription-based pricing model harder and harder to swallow."

http://games.yahoo.com/blogs/plugged-in/world-warcraft-loses-1-3-million-players-three-233637952.html



AC
Reluctantlyregistered Send private email
Friday, May 10, 2013
 
 
So, the initial pricing is $600 a year, or $70 a month for the individual user, and for corporate users it's $840 per named user seat per year.

For me, this is more than I want to pay. I don't upgrade every year and I despise the changes that have been made in the last 5 years, where the program workflow is screwy, things run slower, are less stable, and are constantly trying to connect to the internet. Adobe software has gone to shit ever since they fired all their staff (some of whom I hired) and outsourced all development to guys that don't know anything about design, typography, print, or photo editing in India.

For some companies, they may like the new pricing.

The problem is the only decent alternatives are older copies of Photoshop etc, which have unfixed bugs. I downgraded to older versions because I couldn't stand the current versions.

I disagree that subscriptions are the answer. Adobe was perfectly capable of improving their product instead of making it shittier.

I also don't like the way they, as do Google and Facebook and now Yahoo, buy other companies and then destroy their products, either as acqui-hires, or whatever you call it when you buy a competitor and then liquidate his business simply to eliminate competition rather than do the sensible thing and merge the best parts of both (haven't seen that happen since the great typewriter company merger of 1872).
Scott Send private email
Friday, May 10, 2013
 
 
By the way, Gimp is horrible. I agree some use it, but an old copy of even Photoshop Elements will do you much much better.

Currently, on the Mac there are several possible Photoshop replacements. None are suitable for production printing like color separations, but only very few Photoshop users used that stuff.

Acorn 3 is a decent Photoshop replacement for a lot of things, there's also Pixelmator.

Adobe Acrobat users should look at PDFPenPro, it's more stable and easier to use than Acrobat, though both are unstable and slow for certain things like OCR.

Despite all this though I still have to use real Photoshop for a lot of things. Photoshop's strength for web developers is the file exporters - for a given quality, they generate much smaller files than any other program. Also other programs just can't seem to get masking right.
Scott Send private email
Friday, May 10, 2013
 
 
"Adobe was perfectly capable of improving their product instead of making it shittier."

I wonder if a subscription model might help, it takes away the pressure of having to come up with new features to sell upgrades every year.

On the other hand I agree with everything you said about Adobe, it saddens me to see the company I admired for products like PostScript and Illustrator turn into what it is now.
Tony Edgecombe Send private email
Saturday, May 11, 2013
 
 
I would predict using economics incentive theory that they won't do much.

They are now charging you a fee just to keep using the product. If you stop paying, you don't stop getting new features, you stop getting any program at all. So you pay to be allowed to use it at all. You're not paying for new features and won't leave because there are no new features. So there is no incentive for Adobe to spend money adding new features.
Scott Send private email
Saturday, May 11, 2013
 
 
There is an incentive to keep existing subscribers though, perhaps a lack of bugs or improvements in usability will become more important. Or maybe I am just looking at it through rose tinted glasses.
Tony Edgecombe Send private email
Monday, May 13, 2013
 
 

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