Adobe dared what other software companies have only dabbled in doing: converting their entire, hugely popular software library into a rental-only commodity. Why do software companies aspire to this model? As you might suspect, users of expensive software packages like Adobe’s Creative Suite or Microsoft’s Office products are able to enjoy multiple years of use from the software before reluctantly upgrading, a consumer trend that bodes ill for any software manufacturer bottom line. The solution: make your highly desirable products only available for rent, or in software parlance: “subscription-based”, guaranteeing you a regular income that will make shareholders dance with glee. While this move has angered a large number of Adobe users, the software company was able to pull the plug on ownership because of the virtual stranglehold it has on this particular category of software, especially its flagship products Photoshop, Illustrator and Lightroom, for which there is virtually no competition its users are willing to consider.
What this means for you:
Adobe’s success (or failure) will determine how other companies proceed. Microsoft already has an extensive subscription-based offering of its productivity suite, which can be rented for what most in the business world consider to be a fair price, especially seeing as how critical Office is in daily business, but “rentals” are only a fraction of its overall sales, which still come through more traditional licensing channels. Annual licensing and maintenance has long been an accepted and expected revenue generator on the enterprise side, a means to bolster profits from an ownership model that came from lengthy software development cycles that are growing shorter and shorter every year. Adobe’s justification behind the subscription model maintains that subscribers will be able to enjoy continuous improvement to and expansion of their products. The question remains, however, whether business is ready for applications and platforms that continually change. While new features and improvements are always welcome, the constant change also present bugs, security holes and training challenges that are definitely not covered by the subscription. Where before companies could control the rate at which their critical business software was changed, now they may have to join a race in which the finish line is constantly moved away from the partipants.
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