The real problem with Creative Cloud (Score 1)

I own a video production company. My company has been in business since 2000 and I have been in the industry since the late 1980s. I have been involved with computers since I was building them from kits in the 1970s. In other words, I’m not new to the party. I also don’t (ever) work with pirated software. I have owned a license every single bit of software I have EVER possessed. This is not about wanting something for nothing. So here’s the problem. The relationship between software company and customer exists in a balance. Each party has an amount of power in that relationship, as well as competing motivations and needs. As a publicly held company, the software company wants to minimize expenses and maximize revenue, because these things are necessary to hold its share price up (otherwise stockholders bail and the company goes bust). There’s NOTHING WRONG WITH THIS as long as the other side of the equation also works. To wit: customers want cool new features that make their work easier or more lucrative or enhance their creativity, and they want them for the lowest possible price. When (in the traditional model) the software company comes out with an upgrade, customers will pay for it IF the features are attractive to them and IF the price is acceptable to them. If the features are uninteresting or the price is too high, they won’t buy. This motivates the company to continue innovating and keep control over prices. What forced migration to the cloud does is to transfer most of the customers’ power to the company. This is at least true in my industry; maybe it’s not in yours. You be the judge. In video production, a “project” consists of an Adobe Premiere project file, often with one or more imported Adobe AfterEffects projects and Adobe Audition projects as well as layered Photoshop and/or Illustrator files whose layers can be independently animated. These file formats are all proprietary to Adobe as is the relationship between the files. A project created a year from now is likely to contain attributes unrecognizable to CS6 applications and therefore is unlikely to be backward-compatible. This means that the pain of subsequent migration to another platform is much greater in a CC model than a CS model (where the user always has a perpetual license to the software that was used to create any existing projects). Under CC, if one stops paying, one loses access to the applications and therefore to all the projects that depend upon them. This increased migration pain means customers are likely to endure more abuse under CC than they would under CS before they finally migrate. Merely failing to have attractive innovations in future upgrades will probably not provide sufficient incentive. Slowly increasing the subscription fee will also not move people who are already trapped into a CC-only relationship, at least not right away. So how high could those fees go? Well, I can tell you that my company was surveyed by Adobe about making this move nearly two years ago, and at the time the fee they were floating was not $50/month. It was $150/month. I believe the $50 monthly fee announced this year is a lowball fee intended to get the majority of customers to switch over quietly. I believe if this happens without incident the rate will go to $150 pretty quickly. No doubt Adobe intends to tune the amount to maximize revenue, where increased fees from people who remain exceed what is lost from customers who leave. So my prediction for Adobe if they succeed in this move: innovation will stagnate since they make the same money whether they innovate or not (one of the primary risks of the subscription model), rates rapidly increase over the next two years or so and then increase more slowly (but never remain the same), and no user will ever have access to their software again without paying an unending monthly fee. Also, if this works for Adobe, other software companies will follow suit. Expect to pay a monthly fee for Windows or Mac OS, for every plugins package you own and for all other productivity software from Office suites to Quickbooks or whatever you happen to use to manage your business. And each of those fees will be tuned upward as companies explore what the market will bear. Those of you who are fine with this move by Adobe may want to consider whether you are also fine with where this leads.