Adobe’s Creative Cloud Illustrates How the Cloud Costs You

Adobe’s Creative Cloud: not your hipster uncle’s creativity software.

Adobe plans on focusing the bulk of its software-development efforts on its Creative Cloud offering, with no plans to further update its “boxed” Creative Suite products. The move isn’t surprising, considering the tech industry’s general movement toward the cloud over the past few years; nonetheless, it could still come as a bit of shock for those customers used to InDesign, Illustrator and other Adobe products as traditional pieces of software.

Adobe argues that focusing on the cloud will allow it to innovate faster. And while Creative Cloud represents the bulk of the company’s software offerings, it will continue to offer other products in a boxed format.

In a recent interview with Mashable, Adobe CEO Shantanu Narayen discussed some of the ways his company would benefit from migrating to Creative Cloud’s SaaS model: better piracy controls, less money spent on product packaging (and shipping, presumably), and speedier upgrade cycles. “Companies that wish to thrive in this next tech era need to embrace or perish,” he told the publication. “We’re not only embracing, we’re leading.”

Creative Cloud will cost $19.99 per month for a “single app” version that features the full version of “selected apps,” 20GB of cloud storage, and limited access to services. Those who opt for the “complete” version will pay $49.99 per month for every Creative Cloud app, 20GB of cloud storage, and full access to services; it also requires an annual commitment.

At that price, it would take a few years for a customer spending $49.99 per month to exceed the full retail cost of box-based Adobe Creative Suite 6, which currently retails for $1,423 on Amazon for the Design and Web Premium edition. (The Master Collection costs $2,109 on Amazon, while the Student and Teacher edition retails for somewhat less; adjust the cloud-comparison math accordingly.) Nonetheless, over a certain length of time, a continuing subscription will inevitably outpace the cost of a single copy of boxed software.

Narayen insisted to Mashable that the Creative Cloud’s cost to customers is ultimately lower, especially since they won’t have to pay for cloud storage and other services—never mind that 20GB doesn’t carry anyone far when it comes to visual design.

Adobe isn’t the only company poised to profit from the subscription cloud model. Take Microsoft’s Office 365, which costs $20 per user per month for the “recommended” Enterprise E3 edition. (Other Office 365 versions for SMBs and consumers will cost consumers a bit less—Office 365 Home Premium edition, for example, is priced at $99.99 per year.) Compare that to the single-license version of Microsoft Office Home and Business 2013, which retails on Amazon for $219.99: it would take over a year’s worth of monthly payments, but eventually the customer with cloud-based Office 365 would end up paying more than the one who opted for the box version of Office.

Microsoft executives’ arguments for Office 365 sound very similar to those offered by Narayen: a cloud-based platform can be continually updated, accessed from anywhere, and seamlessly upgraded to meet future needs. Companies that migrate their products to the cloud also inevitably argue that a significant portion of those monthly subscription fees go to maintaining the backend infrastructure that serves the software to users; but with the processes behind the cloud becoming more efficient (and hardware inevitably becoming cheaper and more automated), it’s hard to argue that the cloud isn’t a profitable business opportunity for any IT firm capable of executing properly.

In other words, customers stand to benefit from the cloud. But over a long enough timeline, and with the right financial model in place, the companies providing those services stand to benefit even more.

Editor’s Note: The original version of this article didn’t include the full price range for Adobe’s CS6. That has now been corrected.


Image: Adobe