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Last year, Adobe became a pioneer in offering software subscriptions by unveiling Creative Cloud, their subscription-only software service. Yesterday, they took the next step by announcing plans to discontinue development of their Creative Suite or other CS products. Focusing all future effort on Creative Cloud, Adobe will no longer offer its classic, packaged software product in this category.
Industry reaction is mixed. Some pundits point to this as the future, others explore challenges, and a few wonder if Office is next.
Like Adobe, we think subscription software-as-a-service is the future. The benefits to consumers are huge. Subscribers are always up-to-date. They get the latest and most complete applications. They can use subscriptions across the multitude of devices people use today. Web services like SkyDrive and applications like Skype are also more easily integrated with subscription services, like the new Office 365 Home Premium.
However, unlike Adobe, we think people's shift from packaged software to subscription services will take time. Within a decade, we think everyone will choose to subscribe because the benefits are undeniable. In the meantime, we are committed to offering choice--premier software sold as a package and powerful services sold as a subscription.
As proof of this point, since the launch of Office 365 Home Premium and Office 365 University in January, more than a quarter of consumers buying Office have chosen the subscription. This exceeded our expectations, given that software subscriptions are relatively new to most consumers. So, perhaps the shift is happening faster than we originally thought, and Adobe is helping blaze the trail. Tell us @Office or in the comments what you think. Software subscriptions: #progressive or #premature?
I believe what Microsoft did with Office 365 Home Premium was the right way to do it. 5-user license for the Office suite, extra SkyDrive storage and monthly Skype minutes for $99 a year is a good deal. Adobe's pricing, however, is WAY beyond that, with the cheapest plan being $19.95 pr MONTH for single app access. As a non-professional family user I can justify the Office 365 price tag, but there is NO way I can justify Adobe's.
There are likely many who signed up for a subscription since the home user offering is relatively cheap. I doubt a lot of businesses signed up. Also, the Office Pro version (which is what I always bought) is a little hard to find -- seriously. Worse, the EULA disallowed transfer of the license from one machine to another. This was supposedly changed, but the published EULA I saw at the end of April still said transfers are not possible.
I don't like subscriptions, because they're a hassle. I have about a dozen applications I use regularly. If I had to pay a subscription for each one of them, it would drive me crazy. And every time my credit card expired, I'd have to rush around to update the information or risk getting locked out of my software.
I also don't like subscriptions because there are times when I just don't want to get new versions of the software. That might be due to the fact I don't want to continue using a particular product any longer or it might be due to the fact that my budget is a bit tight. When buying software, I can upgrade on my own schedule and I can manage my expenses.
Software subscriptions are like car leases or renting an apartment. You pay money, but you never own anything. In general, they are a waste of money for the consumer. It's great for business, so I can understand by Adobe and MS like it. Don't count me in, though. I'd rather buy my software.
What paulej said:
"I also don't like subscriptions because there are times when I just don't want to get new versions of the software. That might be due to the fact I don't want to continue using a particular product any longer or it might be due to the fact that my budget is a bit tight. When buying software, I can upgrade on my own schedule and I can manage my expenses."
Cost of ownership is far lower for me buying Office, rather than subscribing.
So long as that remains so, I will continue to buy. Unless, of course, Microsoft decides to pull the rug from under own feet within the next decade by dropping the option to purchase. When that happens, I'll probably stick with what I've got or look for alternatives that continue to give me a low cost of ownership.
@paulej, thanks for your thoughts. I wanted to clarify a few points raised in your reply.
The EULA has been updated, but the text in the app won't reflect the latest updates for some time. For the latest, see the post on this blog regarding transferability. blogs.office.com/.../office-2013-retail-license-agreement-now-transferable.aspx
You are never "locked out." If your credit card expires, at the next auto-renewal (if you've opted for auto-renewal), you'll get a notice. If you don't fix it over several weeks, the apps will eventually go into read only / print mode, but you can always access and use your docs with those apps or the free Office Web Apps, which we're always improving.
More broadly, you raise an interesting point about car leases and renting. Those are relatable analogies, but the difference is that the car or apartment don't get any better when I lease or rent. They are purely a different way of buying. With software, the subscription unlocks new capabilities. It's like a car that fills itself up with gas or an apartment that cleans itself (ok, maybe not the best analogies, but you get the gist).
Whether you want those new capabilities (which was also part of your point), is another question. We'll have more to share on that front in the future, so I hope we can eventually turn you (and a lot of other folks who share your thoughts) around on that viewpoint.
I have already said goodbye to Adobe in favor of Open Source software.
I use TheGimp and paint.net
I will NEVER pay Adobe 600.00$ a year for software over and over again each year.
Are they NUTZ? Is MS nutz as well?
I use OpenOffice.org already too. Just as good if not better than MS Office and again, free, open source softaware.
Software developers pay attention, anyone with even half a brain is going to shift to Open Source, we will NEVER keep re-paying high $ amounts to fill your coffers for
software we can legally replace for free that is as good or better than what you offer.
Well, apparently, you do not REALLY want opinions as my comment was not added. This one probably will not be added as well. We'll see. Most ordinary everyday people with even half a brain will never never allow themselves to be robbed yearly for software they used to be able to outright own. How's that? Corporations may find it useful. but everyday people have enough
to worry about just feeding their families in these economic times, much less re-paying for software every year like paying taxes.
Redmond szerint meg vannak számlálva a fix összegért megvehető, úgymond "dobozos" szoftverek napjai
Wow, I just wish Adobe could come and listen to these great comments. Way to go Office!
Software isn't cable tv. I have no desire to put myself in a position where I have to pay money each month to use my word processor, spreadsheet, or photo editor.
I absolutely will not subscribe to software. Services such as photo storage, sure, as it's similar in the non-virtual world to renting storage space. But I will not "lease" Photoshop, Office Software, or Accounting Software (Intuit is rumored to be thinking of the subscription model for Quickbooks). When a company does what Adobe did, they are pretty much saying, "subscribe... or else", and I'm sorry, but being put against the wall like that does NOT sit will with me (or my wallet).
I've been an Adobe user for many years, but CS5 was my last purchase from them. I'll be most likely switching to Corel's Paint Shop Pro package, or if something even better comes along, that. Adobe execs may not care - they get their multimillion dollar bonus checks regardless of what I do this year. So be it. But over time as more people like myself leave as customers, those bonus checks do get smaller. And by then the trust is destroyed forever and it's nearly impossible to get the customer back.
"Subscribers are always up-to-date..."
I will NEVER pay for a subscription just to get patches from the programmers to correct their misstakes. I don't want to be forced to pay a subscription in case I decide that I'm happy with the version I have and don't want to upgrade. I want to be able to edit my own documents, even if I don't want to upgrade. A subscription will definitelly stop me from doing that as soon as I stop paying.
If I want new features, I buy the next mayor version.
As many here have pointed out, software is NOT content nor storage so this price modeling is not OK.
Subscriptions just take us ransom. People who didn't want to pay through their noses for every new software-release and each silly new feature are screwed now. They can no longer buy what they need when they want to. So, once again customers lose and Big Brother laughs his head off. Way to go Adobe.
I'm trying Office 365 at this point. It's not good. Besides the unnecessary "enhancements" to the user interface (which are rather dumb) the help which apparently was written for the application 2 or 3 versions prior, also sucks. The most annoying issue is the lack of thought that went into the slow speed internet connected users. One recent Microsoft automatic update wrote over their own files, and changed a few files from UPPER to lower case. Office 365 was disabled. After calling their support number, I had to "reload" the application. On a 768 kb connection, 14 (fourteen) hours later the application was reloaded. If you buy the 5 license package.
You can count on 12-14 hours per machine to install. I've installed entire mainframe systems, hardware and software in less time. Clearly, this is poorly thought out.
For many users, subscriptions are neither progressive nor premature, they're #wrong! They're great for developers since they result in a guaranteed income stream. For many users, they're terrible. They result in monthly fees regardless of how much usage a user gets; they result in upgrades not at the user's discretion; when the subscription lapses, the user is left without runnable software, while sometimes an older version of software is just fine; without runnable software, the user may be unable to access his own files, since they're in proprietary formats; the list goes on and on.
Oh, and once you've hooked enough people, there's an incentive to keep raising the subscription fees. And there's no incentive to develop quality enhancements, since the income stream is guaranteed regardless of the nature and number of improvements.