Partly Cloudy

df_adobecloud_1This past Monday at their MAX event, Adobe clarified its plans going forward. Gone is the “next” label, as well as any mention of “Creative Suite 7”. Henceforth, nearly all of Adobe’s content creation products will be sold only via Adobe’s cloud subscription model, under the Creative Cloud (or CC) banner. Premiere Pro, Photoshop, et al, become Premiere Pro CC, Photoshop CC and so on. With a few exceptions, like Lightroom, perpetual licenses (where you “own” the software) are gone. Needless to say, this announcement brought a quick and largely negative user reaction. Clearly Adobe was having its own “FCP X moment”. Hitler wasn’t happy (warning: offensive language). Of course, he wasn’t happy with Final Cut Pro X, either. Before I continue, here are links to Adobe’s FAQ and official responses/clarifications from Adobe’s communityDennis Radeke and Al Mooney in various forums, so you have the straight scoop.

Although we tend to think of software ownership like any other asset, digital media plays by a different set of rules. What you own is a license to use the software freely according to the terms of the EULA. It’s not an asset that you can use in an unrestricted manner, such as unlimited installation or resale on the open market. In fact, in the “bad ole” Avid days of turnkey systems, you actually had to pay a transfer fee when selling a system to another user. This was often waived, but did nothing to endear users to Avid. Even today, you typically cannot legally sell used (already registered) software to others in the same way that you sell used computers – although people do it every day without issue. The bottom line is that you may have application files on your drives or installation DVD-ROMs, but you don’t own these in the same way you own a physical, printed book – or a printer.

Clearly the concept of “ownership” is limited in the digital world, but at least what we understand as “owning” is completely different than renting. Essentially that’s the shift Adobe has made. If you buy a monthly or annual Creative Cloud subscription (or a single-application subscription), then you are renting the software covered under that agreement. The term “cloud” is a bit misleading, since the application software is downloaded and resides on your local computer, just like any other software. The software is authorized over the internet and it pings Adobe’s license servers monthly to see if you’ve paid your bill. This is more or less like the cable company, which installs a set-top receiver/DVR box in your house, though you don’t own that hardware. With Adobe, this shifts your use of the software from a capital outlay to a monthly expense, like other services or utilities costs. If you quit your CC subscription, your software is de-authorized and you lose the ability to use it or even open existing project files. The software can stay on your computer and you can renew the subscription at some point down the road if you like.

This model has several benefits for Adobe, such as a constant and somewhat predictable revenue stream. Since the software is now a service, it gets them out of some of the Sarbanes-Oxley legal issues revolving around the release of features and timing of new products coming to market. In essence, Adobe never has a “new product”, but rather posts updates to the Cloud, that users can download when they want or need to. Their claim is that new features can be introduced more quickly, because the aren’t bound by the “features versus bug fixes” conundrum that’s become an unintended consequence of SOX. I’m skeptical of these claims, since most downloaded software over the past few years has enjoyed reasonably rapid development between big point releases. You can only develop new software so quickly and having a different delivery vehicle may or may not improve that.

The ultimate question, though, is whether or not this is good for the user of Adobe products. Clearly the Creative Cloud change is one that benefits enterprise customers – the largest post houses, corporate media departments, digital media-centric ad agencies, broadcasters and TV/cable networks. These are customers who are more comfortable with a monthly fee system. They may already pay support contracts and want frequent updates. Their media is often perishable, so opening legacy projects might not be a concern. Adobe has also sweetened the pot with additional CC services and storage.

If you are an individual Adobe power user – meaning you’ve used many if not all of the applications in a Master Collection or Production Premium bundle – and you update annually anyway – then the Creative Cloud subscription will likely save you money. However, if you only use one or two applications and update only every few years, then a subscription just increased your costs. I see plenty of users who don’t upgrade. For example, at freelance sites, I routinely run into a range of CS4 through CS5.5 products. These users are quite happy with After Effects or Photoshop in those versions.

Historically Adobe has not given all apps within a bundle equal treatment. For instance, in one version After Effects may get a few whizz-bang features, while Premiere Pro only gets a few tweaks. The next time, it’s the other way around. So the subscription model is only of benefit if Adobe updates and you actually need those updates. Often software updates require newer hardware to take advantage of the next features or performance. Users may or may not be ready to bump up their hardware or their OS versions. Adobe will have older versions available on the Cloud, so you don’t necessarily have to run the newest software. If that’s the case, though, then what is the benefit to you of the subscription if you are not going to use the latest software?

There currently are four basic software use/own/rent models:

Perpetual License – This is paid “ownership” as discussed above. Avid, Grass Valley and others follow this model. Sometimes it comes with an optional support contract.

Software as a Service – This is the concept of the Adobe Creative Cloud. They aren’t the only one. Look to Intuit, Microsoft, Google and others for similar models and it will increasingly be the way a lot of software companies go.

Mac App Store – This is Apple’s approach and specifically applies to Final Cut Pro X, Aperture and other Apple and third-party software. You buy the software one time. The most current version is the one always available at the MAS and you can download and update for free when you are ready. As long as the product is sold as the same product, the developer cannot charge for an update. If the product changes or is rebranded, it can be sold (at full price) as a new application. You can install the software (for a single application charge) on as many Mac computers as you own or control for personal use. Professional use is intended as one installation only for a single machine used by multiple people.

Free with “strings” – This would apply to DaVinci Resolve and Lightworks. The basic model is free, but the developer offers certain value-added options or “add-ons”. Examples include the Lightworks Pro package (subscription to cover licensed codec support) and Blackmagic Design’s restriction of Resolve to working with its own hardware i/o products.

I’m a fan of most of Adobe’s products. Although I’m a relatively knowledgeable user of these tools, I am by no means a “power user” of Photoshop or After Effects, though I’m comfortable working there. As a magazine and blog reviewer of software, I have evaluation copies of the various Creative Suite Master Collections from over the years and for the most part, I have never touched many of the print, web or Flash applications.

I am also well aware of how capricious some software decisions can be. For example, for a few years, Adobe was developing Soundbooth – a streamlined, task-oriented audio application. It included a proprietary music tailoring function (like Smart Sound’s Sonicfire), using Adobe’s own scores. A few were included and then you could buy more scores to augment your library. I bought a number of these. Then Adobe decided Soundbooth wasn’t working for them and not enough folks were purchasing the additional scores. So they killed the product and dumped the scores out as a free download (including those I had paid for a year earlier).

Unfortunately Audition (which replaced Soundbooth in the bundles), no longer has any ability to use these scores. In fact, nothing except Soundbooth can. A few months ago I had to re-install Soundbooth from CS4 or CS5 on my MacBook Pro just to be able to build some tracks using these scores. The point is that there’s no reason that Adobe wouldn’t decide to dump some app in the future, like Prelude or SpeedGrade, for instance. After all, they can now track specific application downloads and can tell what people are using. No more bundles to shield the unproductive. Of course, Adobe has stated that if that were the case in the future, they would simply make the EOL’ed product available for download and use without further authorization to existing customers.

I don’t want any of this to sound like Adobe is doing something evil. They aren’t and I feel that companies have to do what makes the most sense for their survival and continued product development. I think the negative reaction could have been blunted if Adobe had included an “opt-out/buy-out” mechanism. For example, if you’ve subscribed for a year and don’t want to continue, you could buy a perpetual license to the software you have on a prorated basis. That would be a win-win in my book.

I personally prefer the perpetual license model or the Mac App Store. I think there’s a real issue for smaller production companies and individuals with the “monthly cost creep” that this all amounts to. It’s not just Adobe. Factor in your cable bill, your phone data plan and other services like Vimeo, Dropbox and more. These all start to add up to real dollars that run the risk of “nickel and diming” a small business to death. In fact, NPR ran a story this week on that exact subject. My druthers are the Apple Mac App Store model for know. It is the most cost-effective.

I also don’t believe that all of Adobe’s applications are “best in class”. Photoshop and After Effects probably are, but others – not so much. I don’t understand the need for Prelude, other than to fill in gaps that Premiere Pro is missing – like transcoding. Photoshop is pretty bloated for the casual user and long ago needed something between it and Photoshop Elements. My point is that for a user like me, the full Creative Cloud model doesn’t look too appealing. There are viable alternatives to all of Adobe’s solutions, but if you need to maintain compatibility with client-supplied Adobe files, you will likely find it hard to get by without some Adobe product.

My suggestion for most users in similar shoes would be to buy one of the CS6 bundles now as a perpetual license.  This gives you a fallback position. Then if you want to move forward with the Cloud, run the numbers. If you are a power user of Photoshop, Premiere Pro or After Effects and want to have the latest version of that one application, simply buy a single-application subscription. If you use three or more applications on a regular basis and want those all to be current, then the full Creative Cloud subscription makes sense. You still have the CS6 versions if needed, as long as you’ve maintained backwards project compatibility.

The last thought I’ll leave you with is this. Don’t trust any company that says they have a vision for your digital future. Adobe’s applications are built around web services. For now, these are locally-installed applications; but, they could also function as the front end user interface for software that actually does reside at a remote location (“the cloud” for real). That’s the concept behind Adobe Anywhere. In short, could the “end game” be for a strictly cloud-based, software as a service operation? Adobe Creative Cloud running like Google Docs? Maybe – maybe not. We’ll see.

EDIT: Since I posted this entry, I’ve received some feedback from my friends at Adobe. A key feature of the Creative Cloud is not only access to Adobe’s portfolio of content creation applications, but also a slew of other resources, including community support, cloud storage and online portfolios. If you are an enterprise user with a Creative Cloud Team subscription, there’s even more value, such as a larger amount of storage. While some of these features might not be needed if you already are using Dropbox, Vimeo or a WordPress blog as your website, the Cloud subscription does put these types of resources under one roof.

An enterprise customer, such as a broadcast station group, may well find the Creative Cloud plans quite attractive. They can negotiate deals that place Adobe apps on any computer within their creative departments across all divisions of the company. This type of customer really isn’t too worried about opening legacy projects from a few years ago. By shifting software purchasing to the monthly expense part of the ledger, it removes it from the annual capital expenditure battles and guarantees more frequent updates across departments. So, while there is a lot of back and forth comment across the internet about Adobe’s move, I should note that quite a few customers are and will be very happy climbing into the Cloud.

©2013 Oliver Peters