Thoughts On Adobe's Press Conference

Posted on May 6, 2013 by Larry

This afternoon as part of the 2013 Adobe MAX, Adobe held a press conference featuring Adobe CEO Shatanu Narayen and Adobe SVP and General Manager of Digital Media David Wadhwani.

There was a lot of discussion of print media, business plans, web design and other cool stuff, but off-topic as far as I was concerned. So, here are the highlights, in no particular order, on what they discussed that was relevant to audio and video media creators.

First, it is important to note that, although Adobe has not made a big point of this, using the Cloud does not require that media or documents be stored on the Cloud. All Adobe applications are downloaded to your system and run locally. If you are concerned about security, media and projects can be stored locally. You, the user, need to make a conscious decision to store media and projects on The Cloud, it does not happen automatically.

Adobe MAX has 5,000 attendees from 50 countries, with 50% of the attendees describing themselves as designers.

STRATEGY

Question: Why did Adobe move so aggressively into The Cloud?

Answer: Mr. Narayen explained Adobe’s strategy as:

First, as a canvas for their engineers to innovate more rapidly, then bring those innovations to customers.
Second, to attract the next generation of creators that don’t have experience in buying and upgrading software. A cloud-based installation process is both fast and easy.
Third, subscription revenue makes the business more predictable by smoothing cash flow.
Fourth, because distribution is via the Cloud, the needs of different countries can be more easily reflected into different products.

It is Adobe’s expectation that in the near future, all computers will be connected everywhere with high-speed Internet connections.

Mr. Narayen used these key words multiple times in describing the process: Adobe wants to help creators “Make, Manage, Monetize, and Deliver” creative media products.

Adobe views its key market segments as:

Imaging
Video
Web
Design

VIDEO

I couldn’t sit still any longer, so I asked: “Today’s keynote focused on web and print creation, which are undoubtedly important. Why was there no mention of video (with the exception of an After Effects demo), audio, “Adobe Anywhere,” or the impracticality of storing media in 20GB of Cloud storage?”

David responded by saying that there just wasn’t time to cover everything in the morning keynote. Premiere Pro won Best of Show at the 2013 NAB Show and Adobe Anywhere, using The Cloud for media production, is central to many, but not all, of the Adobe applications.

NOTE: I have a meeting later today with Bill Roberts, Director of Audio/Video Product Management for Adobe, so I’ll post results of that conversation in another blog.

Regarding Adobe Anywhere, Adobe wants to start this with larger media companies, then move it into the broad market. For them, it is an issue of timing. It will be added to Creative Cloud applications in the future.

EXISTING VERSIONS

Adobe will offer to all Creative Cloud subscribers a license that allows installation on two computers, PLUS the ability to download any or all of the CS6 versions of their software. This is specifically designed to allow Cloud subscribers to work with designers that haven’t upgraded to the new system.

So, this means that you can have BOTH CC and CS6 applications installed on up to two systems at the same time and easily switch between them.

Remember, all CC applications are stored and run locally, they are only downloaded from the web.

FUTURE

A key insight happened near the end of the 35-minute press conference. Mr. Narayen was asked if Adobe has plans to open the Cloud distribution model to other developers, similar to the Mac App Store?

He replied that Adobe has plans to offer additional applications, as well as allow developers to deliver products that add value to Creative Cloud applications using Adobe’s Creative Cloud.

OFF-TOPIC

Two things I’ve also learned, that weren’t covered at the press conference:

I was reading a blog from Adobe earlier today, where I read: “[Adobe] thinks it is important to note that unless one wants to take advantage of the “cloud” features, there is no difference between the CS6 versions and the new CC applications, apart from the purchase and activation model. All applications are installed and run locally and all data is stored on whatever drive or media you choose to store it. The additional services, and what makes it a “Cloud” platform, are entirely optional.” [This comment excludes new features that are only part of the CC release of an application.]
You can unsubscribe to the Cloud WITHOUT losing your data. However, without the application you won’t be able to open these data files. Still, all data files are complete and stored locally. If you were to take them to a computer that has these applications, all your files will open. In other words, you can unsubscribe to save money when you are between projects, without losing your data.

I’m off to cruise the trade show floor. I’ll have another report after my meetings later today.

As always, your thoughts and comments are appreciated.

Larry

20 Responses to Thoughts On Adobe's Press Conference

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Gabriel Spaulding says:

May 9, 2013 at 3:32 pm

Creative Cloud might not be the best option for those who only use a single program, or for those who only occasionally use Adobe software. I don’t know how much Adobe really considered these users when they developed their new pricing and distribution method, and I completely understand the frustration I have been hearing from those two camps.

However, despite simple math showing Creative Cloud to be more cost-effective over a 3-year span than purchasing the software outright, I’ve read reports from a number of people and production houses who say Adobe has now given them an unsustainable business model. This makes no sense. If this software is cheaper, able to be more easily and frequently updated with bug fixes and new features, not to mention the other benefits afforded to Creative Cloud members –what is the problem? $30-$50 a month is not a lot to pay to have regular use of some of the world’s best creativity software (Photoshop has become a verb…), especially for those who use the software to earn a living –many of whom will earn the equivalent of that monthly payment in a single hour of work.

How much does the average American spend on their cell phone bill? On their cable TV bill? How much on junk food? Even for those who don’t use Adobe software to earn a living, Creative Cloud is quite manageable. Those who cannot afford the monthly payment would have had an equally difficult time buying Adobe software before, at hundreds of dollars per program and thousands for entire suites.

In the end, it is what it is. Adobe doesn’t owe us anything, and it doesn’t exist to make each and every one of us happy. And if we’re not happy, we can buy our products from someone else. It might be stressful, but it’s not the end of the world. The sky is not falling.

There are bigger and more important things happening in the world to get fired up about.
Craig says:

May 9, 2013 at 4:32 pm

Although expressed cynically, I think Andrzej touches on some “truths.”

Adobe was faced with a few business problems. Uneven revenue with a peak during release followed by a decline. A large user base that was skipping one or more upgrades. Fragmented markets in which users would pick one or another tools, some not upgraded regularly.

The problem may be that as the programs matured, the upgrade features only hit some niches. If a new feature is needed by only 20% of their market, that leaves a lot of users skipping upgrades. All this hurt cash flow and R&D. It meant they had to weigh priority between a potentially broadly useful feature vs a “high end” feature that would only motivate a niche to upgrade. In addition some of those features might require newer hardware so if the customer has to consider that purchase as well and may decide to hold off.

The CC ensures Adobe gets steady cash flow and that money happens whether or not a user upgrades. Those who upgrade regularly (software and even hardware) benefit from CC. Those a bit more irregular but use at least two apps may suffer the additional expense (paying even if they have no need for the upgrade). What Adobe loses are those who are most likely to skip upgrades or use their products secondarily. This is the least profitable group.

I think there’s a very large base of “part time” users, those who might buy and maintain Photoshop or After Effects or InDesign for a few years running before upgrading. That’s probably a big portion of the unhappy response.

Ultimately this is good for Adobe and not as good for those who are not day to day users who keep up with their upgrades.
Timothy Barksdale says:

May 13, 2013 at 8:38 am

Adobe is following the money trail. Too bad, as they failed to see the huge professional/ customer gap opened by Apple.

I hate cloud based applications and find little value in this model. This makes it easier to make a decision to move toward Avid.
Alain Robitaille says:

May 13, 2013 at 9:10 am

Figure this out, i am using Adobe suite for 15 years, 15 x 12 month =180
180 x $50 average = $9000. Thousand dollars spend , with this processing
next year could be $60 an year After $75 because when when you get involved in this process you get squeeze and dependant on there will, so knowing that, if you had and other 15 years on top of that at an average of $75 a month you come up to $13500. all together it come up to $22,500. ,with nothing in your hand, thank you Adobe to give a chance to smaller company like onOne Software to shine in the Future, for some crazy thing from Apple i switch to you, if you start behaving like them i will switch you to. There is so many good app coming in now to switch to. I am French speaking so excused my English
John Downey says:

May 13, 2013 at 2:44 pm

Having recently signed up for the Adobe Cloud Experience I have a couple of comments.
1. Is great that I now have access to all the Adobe Software – and yes it is cheaper than if I had bought them separate. The last time I upgraded prior to the Cloud it cost me $799 for the CS5 Suite. The cloud subscription upgrade was $39 a month or $468 or approx $300 cheaper.
2. Now as to my experience downloading all the CS6 software – arrrggghhh – hated it … it took hours to bring down everything I would have normally gotten on a few DVD’s (and I have a fairly fast DSL). I can’t even imagine how long it will take to download right after a new version is announced.
3. Now that I have experienced the ‘Cloud’ I would gladly pay the extra $300 (and who knows what will happen to the price later) to avoid their download cloud experience.
Don says:

May 13, 2013 at 2:58 pm

This is a case of another good company becoming evil. Apple sucker punched their customers. Adobe has tied them up and put a gun to their heads. Apple said, “we’re not making your software anymore. Too bad.” Adobe says, “your money or your files.”

I think Adobe’s big problem is they can’t collect any data from users that they can turn into advertising billions like Google or (perhaps) Facebook. What I’m hoping is that Black Magic buys Adobe and brings back Creative Suite Master for $299. That’s an example of a good company that does right by customers and knows how to make plenty of dough, too.
Alain Robitaille says:

May 14, 2013 at 4:46 am

There an answer up there who tell he save $300 i really don’t know how it figure this out, i think he believe the years after he will owned the software and stop paying, or, he work for Adobe. Apple incoming flatten for the first time in 5 years and it will be worst for the incoming time like one of the creator Mr Wosniak predict, one day the system will catch you, no company can’t be bigger then their Customers, if everybody come together in one voice Adobe will Go down the drain.We are the Power not them!
James says:

May 14, 2013 at 10:59 pm

I jumped at the subscription model 9 months ago and am glad they offered it. Do the math, people. If you use three or four of Adobe’s tentpole apps and keep within even 2 versions up-to-date CC is pretty much the same price — and considerably less if you throw one or two more into the basket. As for ownership — hey, I *own* versions of Premiere and Photoshop going back to 1990. I don’t use CS 2 very much, these days, though. Or FCP 2, 3, 4, or 5. Or a Power PC Mac. Upgrading is not optional in tech-dependent businesses, if you hadn’t noticed.
Alain Robitaille says:

May 15, 2013 at 7:35 am

Let put it that way, supposed you come in a cars dealer and the Salesman tell you you cannot buy this Car you have to Rent it, so you ask the Salesman what is the purpose off all this?, he answer, This is simple Sir we want you to pay all your life long now you put a kind of Mortgage on a Software suite, i really feel this is crazy for almost every customer who are not a Company
Rick Whitfield says:

May 26, 2013 at 12:17 pm

I work in the film business and rely on pro apps. So many have disappeared and Adobe has put me in a box with Creative Cloud. We have decided that CS6 Production Premium is our last Adobe product and are actively looking for replacement applications. Much as Apple handed off professional editing back to Avid, Adobe is doing likewise. I own expensive software – Nuke-X for $8k. Yearly I pay maintenance that equals Creative cloud. But I have a local license server and can work without the Internet which is very important. I could not afford to have my software go down on location with non-existent Internet. So back to Avid and Autodesk. Come on Black Magic. Build us a Final Cut Studio with Davinci Resolve as it’s base!