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Adobe Just Killed Traditional Software Licensing

At today’s Adobe Max Conference, Adobe announced that they would stop selling traditional shrink-wrap licenses of Adobe Creative Suite products – Photoshop, Flash, Dreamweaver, etc. Now it’s all about the Creative Cloud and its subscription-licensing model. You can no longer buy the Adobe Creative Suite; you can only subscribe to the Creative Cloud as a monthly or annual subscription.

In other words, Adobe just became a SaaS company. A huge change in business models for one of the pioneers of old school software licensing.

The idea is that the subscription model will provide Adobe with a sustainable business model over time since customers will keep renewing on an annual basis. The up-front costs to the customer are lower, but over time the customer will pay Adobe more to continue to license the software. It’s on Adobe to keep happy customers through providing a compelling product roadmap and excellent customer support.

Contrast this with the traditional enterprise-licensing model where the customer pays a hefty up-front license fee and a smaller ongoing fee for access to support and upgrades. In the legacy model, the customer assumes all of the risk and the vendor has less incentive to keep the customer happy over time.

I view this as another milestone in the death of legacy enterprise software. Kudos to Adobe for making this shift. Will others follow?

Let me know what you think in the comments.

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