How Adobe’s new business model will affect your business

21 nov '17 - Alecsandra Vintilescu - share: LinkedIN Mail
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If you’re working on a computer, chances are that you are using at least one Adobe product. And if you’re working in a company, then even more Adobe products might be installed and used on your machine. Whether it is Acrobat, for opening and editing PDFs, or more advanced graphic design tools such as Photoshop, InDesign or Illustrator. 

Since 2012, Adobe has been transitioning to the Software as a Service (SaaS) model. Basically, that means that instead of buying and installing a copy of the products, you now subscribe to it. And with Creative Suite CS6, which consists of Adobe’s most popular products, being sold exclusively as SaaS starting January 2017, you have to think how that affects your business.

In this article, we looked at how Adobe’s new business model can impact both small companies (or freelancers), as well as large organizations that are making use of Adobe software. If you are a freelancer or a small company that doesn’t necessarily need the latest upgrades or the flexibility of changing the number of copies you are using, then the new SaaS model will probably end up being more expensive. However, if you are a large organization, Adobe’s new pricing model will help you cut costs and avoid using unlicensed products that could lead to paying more.

To demonstrate that, we’re going to compare the new and the old Adobe pricing models and see the impact on both kind of organizations. In our analysis, we’ll take into account not only the direct costs, but also indirect costs such as purchasing upgrades and add-ons, and the risks of being found non-compliant.

Direct costs - is SaaS more cost-efficient?

In short, it depends whether you want to have the latest upgrades or flexibility with regards to the number of copies you use.

Let’s take the example of one of the world’s most popular PDF software, Acrobat – available in two versions, Standard and Professional. Up to today, this is one of the few products that is sold both perpetual and on subscription basis.

If you subscribe to Acrobat Pro DC for one month, you will pay 24.99$ VAT excl. However, there is almost a 50% discount if you purchase an annual plan; in this case, the monthly price goes down to 14.99$ VAT excl.

Alternatively, you can purchase a full license of the desktop version Acrobat Pro 2017 at the cost of 449$ VAT excl. or you can upgrade from a previous version to have all the latest features and updates included for the price of 199$ VAT excl.

On a larger scale, for small to medium and large enterprises, Adobe offers volume discounts and you, as business owner, may save costs by customizing your Adobe product portfolio. Price discounts for cloud are also applied for students and educational institutions. You can obtain these discounts by contacting your channel partner or Adobe directly. Signing an agreement with Adobe can bring you customized prices based on demand: the more your purchase, the bigger the discounts.

The table below summarizes these costs on the hypothetical scenario that the next version of Acrobat Pro gets released in the next two years and you want to have the latest release and access to its features.

As a single user, it is, of course, quite expensive to upgrade every two years and you may decide to keep your old version for as long as you can, in order to save costs.

However, Adobe’s desktop products have an average lifespan of 5 years, meaning that after this period, Adobe no longer provides technical support and product and security updates.

Now, it shouldn’t be much of a problem as long as you don’t upgrade your operating system or any other software that directly connects to your Adobe copy. This might work if you are an individual user, but as a company, it is likely that you will want to upgrade the operating system as soon as possible. A recent survey, conducted by Adaptiva, stated that 64% of the interviewed businesses are planning to upgrade to the new Windows operating system within two years from the release date. 

In a fast changing technology world, it is advised to keep your environment protected from malicious threats.  And once you upgrade your system, you will have a better protection, but that’s when you will need to upgrade your software as well.

It is also important to mention that you can install a second copy of desktop software on your work computer or portable, without the need of an additional license, as long as these computers are never used simultaneously. However, the Mac and Windows versions of all Adobe products are licensed separately. Dual-boot Mac/WIN computers require 2 licenses, one for each platform, if both versions are installed on the same computer.

On the other hand, the cloud service provides the possibility to install one license on two devices, regardless of operating system; let’s say your work computer is running on Windows while the home portable has a Mac operating system. The subscription covers usage on both without additional costs.

Last but not least, cloud subscription offers immediate access to all new releases, updates, cloud storage, premium fonts and more.

Indirect costs - beware of non-compliance risks

It is important to mention that through cloud software subscriptions, you have a better understanding of your licensing needs. It’s not that difficult to mistakenly install multiple copies of products or purchase the type of license you do not qualify for – what usually happens with perpetual software. But by having access to what is called the “Adobe Management Console”, it is easier to keep track of your licenses and manage them yourself. By doing this, you save not only the hassle of having someone from Adobe questioning you, but you also save the costs you would have to pay if any used, but unlicensed product was found in your environment.

All in all, even if you are a fan of on premises software, you should think about the long term instead of focusing on the immediate benefits.

To sum up, if you are a freelancer or a small company that doesn’t necessarily need the latest upgrades or the flexibility of changing the number of copies you are using, then the new SaaS model will probably end up being more expensive. However, if you are a large organization, Adobe’s new pricing model will help you cut costs and avoid using unlicensed products.

Footnotes

*All prices in the article are US based and available for small businesses. Note that prices in Europe and Australia are increased by around 13%.

*All prices are taken from adobe.com and are available as of October 2017

Quick guide to Adobe licensing​

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The required number of licenses for Oracle’s Database programs are (almost) at all times related to the hardware infrastructure on which the software is installed. Incorrect interpretation or understanding of whether the software is deemed to be installed and how the installed software should be licensed in a certain specific hardware infrastructure is by far the number 1 license compliance issue. 

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