Adobe’s recent Creative Suite® 5.5 product line announcement caught my attention. It was not what Adobe’s selling that caught my interest; rather, it’s how they’re selling it. This launch marked a major change to Adobe’s product release strategy for Creative Suite®. Adobe plans to add a subscription option with a much lower initial cost. Instead of paying the one-time lofty purchase price, customers will have the option to pay for access to the software through a monthly subscription fee.
Is this the future of software? Cloud-based computing and Software as a Service (SaaS) are subscription based fee applications. It is a great business model but not always customer-oriented and can have security and reliability issues. These applications tend to rely on a stable Internet connection and therefore make us more reliable on the connectivity grid. If connectivity is compromised, so is our productivity.
Upsides for the consumer:
Subscription based software ensures customers are always working with the most up-to-date versions of the software, without the upfront cost of full pricing. Customers can choose a one-year subscription plan for lower payments or a month-to-month subscription for greater flexibility. Payments make it easy to budget. The user has instant access to the latest version via a download. A friend of mine commented on how it would’ve been nice to have the subscription when she purchased CS3 because CS4 came out 2 months later.
Upsides for the seller:
Subscription-based services help businesses stabilize cash flow. With a subscription model, a business’s cash flow becomes regular and predicable. Companies can worry less about finding new customers, and focus more on keeping existing subscribers subscribed.
Subscription based software also ensures the seller with reduced rates of piracy and more willing buyers with a reduced cost of entry. That lower entry point may also help persuade people using pirated versions of Adobe’s software to pay for legal versions. Subscriptions have been successful at curbing piracy in the video game business, too. Microsoft’s Xbox Live is a good example.
For the customer, price seems to be a major selling point for these subscription offerings. If I’m paying that much money, I don’t want a rental, I want to own the product. You don’t really “own” the software in the traditional sense. By subscribing, you’re entering into an ongoing relationship with a company that could change its policies or pricing at any time.
If you purchased Photoshop in a box 10 years ago it would still work (only if it kept running on the same machine, would not work on newer OS), even if Adobe went out of business. This is not necessarily so with subscription-based software licenses. And, if you wanted to sell your 10-year old copy of Photoshop on eBay, you could.
So, it seems to be a trade-off. What subscription-based software offers customers in price, flexibility and up-to-dateness, it takes back in access and control.
What is your preference?