In a major shift for its business and its customers, Adobe Systems on Monday announced it no longer will sell its Creative Suite software as it moves instead to the $50-per-month Creative Cloud and other subscription plans.
"We have no current plans to release another perpetual release of the CS tools and suites. Creative Cloud is going to be our sole focus moving forward," said Scott Morris, senior director of product marketing for Creative Cloud.
When Adobe launched its Creative Cloud subscription last year, executives weren't sure how long it would offer it alongside the traditional perpetual-license sales for its software. But customer enthusiasm for the Creative Cloud, combined with the awkwardness of maintaining it alongside the slower-moving CS products, led the company to move aggressively to the subscription plan.
"We expected it to be a couple years before this happened. But we were surprised by how successful Creative Cloud has been," Morris said. "We know that's going to be a difficult transition for some customers, but we think it's going to be the best move in the long haul."
It's not just a big difference for customers. With the change, Adobe moves its business more to a recurring-revenue approach. Instead of revenue surging when upgrades such as CS6 arrive, the company gets a steady stream of money.
"There's a stacking effect. When we bring customers in, they stay in. Then when we bring in new customers, we layer the revenue on top," Morris said. "Recurring revenue is going to help Adobe in the long run. That's one reason Wall Street responded very positively."
What is Creative Cloud?
The Creative Cloud grants access to all the software in the full Creative Suite; newer products such as Muse and Edge Animation for Web developers and Lightroom for photo editing and cataloging; and services for activities including file sharing, collaborating, and Web publishing.
The subscription costs $50 a month for those who sign up for a year's commitment, though Adobe has discounted the monthly price to $30 for those with earlier versions of CS and has just added a $20 price for those with the newest CS6 version that Adobe released last year.
"Customers who invested last year in a perpetual license, might feel their upgrade path was taken away from them, so we'll be giving them a screaming deal," Morris said.
There also are other subscription plans. For $75 per month, customers can use CC products on a month-to-month plan rather than a full-year commitment. For $70 a month, Adobe offers the Team version for businesses with multiple employees using the software.
For those who don't want the entire suite, Adobe offers subscriptions to individual programs. And now they're cheaper, down from $20 a month to $10 a month, Morris said.
