Only last week I was writing about Leica’s 20-percent discount on a year-one subscription to Adobe Creative Cloud. Now comes news that Adobe’s profits have been following Creative Cloud into the ether. Annual profits are up 22 percent on the back of the new subscription model, with subscription sales soaring 44 percent and direct product sales declining by 13 percent.
It’s a sign of the times as software developers seek an alternative to the old system of selling a version, then offering free incremental upgrades until the next major upgrade became available—a point where they could reasonably ask for more money. It was all a bit hit or miss and there was a lot of wastage, not to mention the impact of those irritating individuals who never upgraded and yet expected support for a product they bought ten years ago.
Drip-drip
The drip-drip subscription method, which is becoming more popular, seems to be good both for the developer and the customer. The user has the peace of mind of being always up to date, with no need to worry about adding plug-ins or encountering incompatibilities. He also benefits from additional bells and whistles that the developer can throw in as part of the sub. For instance, the standalone Lightroom user who changes to the CC subscription finds that he also has access to PhotoShop, a product that would have cost a premium in the past. The software house reaps the benefit of a steady income stream which funds development and, to a large extent, relieves the constant worry of maintaining backward compatibility with older versions.
We are now more inclined to value good software and no longer resent paying for it. A monthly or annual “rental” payment is the way things are going.
Yet there is one important area where matters have gone into reverse, although clearly to the benefit of the consumer. For years Microsoft charged royally for Windows upgrades with the result that takeup of a new version of the OS was pathetically slow, Millions of users elected to stay with Windows 95, Windows 98 and what have you, much to the disruption of the market. The need to build in backward compatibility was clear—not just from Microsoft’s point of view but on the part of software developers in general. Much of the frustration of Windows use stemmed from this policy.
Stunning
Then, in a stunning move, Apple attacked Microsoft’s income model by simply offering OS X upgrades free. There is now no financial excuse not to upgrade (in most cases it now takes place automatically, just as with Adobe’s Creative Cloud) with the result that Apple now sees a majority of owners upgrading within the first year. In the first month alone, the latest OS X version, El Capitan, was installed on 25 percent of Macs worldwide. This brings tremendous benefits to Apple by reducing the need for constant backwards compatibility and boosts security because more and more users are adopting the latest versions. It also helps software developers who no longer need provide for much earlier versions of the OS. Winners all round.
In the early days of computing it was the hardware that ruled the roost. Software, although vital, was intangible and something that ought to be cheap, if not free. Now, software rules and the subscription method is coming to a computer near you, soon.
Why people are so fond of Adobe’s Creative Cloud is not quite clear to me. Since it was announced, I am still not thrilled about Adobe’s new policy of renting out software instead of selling licenses as they used to do.
OK, very soon the reason for that became clear to me. When looking back 20+ years, Adobe was very innovative and after buying Photoshop version 2.5 in ’93 I never missed an upgrade until CS6, simply because there were new and innovative things, I wanted to try out and that turned out to be very useful. I was an Adobe fan during that time.
Looking at Adobe now with their CC policy, I clearly see that there were hardly any really innovative features added to Photoshop or Lightroom since CS5 or CS6 compared to the last 2 decades. It seems to me that the end of the product’s development cycle has come close. A phenomenon or better say destiny every technical product or development has to face. Example? The life cycle of the steam locomotive.
So how to make a software business survive, or even prosper under these conditions? Solution: Stop selling software licenses on data media (or download) and rent software to the customers and make them dependent. Force them to regularly connect to Adobe’s umbilical cord (servers) and control the software on their computers. CC will stop working on your computer without connecting with Adobe at least once every 6 weeks, right?
Cloud services as a bonus? I simply don’t need nor want to use "the cloud". What is a cloud anyway?
1.) Some big mass of vapor in the sky.
2.) A server connected to the Internet, running certain software for data synchronization on it, located …uhmm… somewhere, run and administered by …uhmm… someone. Well, I refuse to trust someone somewhere unknown, in the end having absolutely no idea what is done with my data.
Why storing my data somewhere outside of my control? My data is my property. Storage devices are huge now and cheaper than ever. Trust in external companies (cloud service providers)? Come on, this is the age of Edward Snowdon, there is no trust any more.
Well, I am really unhappy with CC, because this will eventually put an end to innovation in software. Why developing something new when having a constant stream of money coming in for the current stuff?
I also dislike to have someone else (external) controlling whether certain software on my computer will work or not. And, by the way, how deep into my computer data does this control go? I have no idea. So far I looked at my computer as my private property–I paid for the hardware as well as software with my hard earned money. Now I have to allow to be controlled on my own territory and still have to constantly keep paying for it?
Maximizing profits and control over customers seems to be the new innovative force. Things have certainly changed a lot, and I fear, not for the better.
Congrats Stephen on being one of those ‘irritating people’ who has got support (from Leica) for a product that is possibly between 50 and 60 years old! I doubt if you will be getting support in 50 or 60 years from now on any Apple product bought in 2015. I bought a couple of Apple products this year; an iPhone 6 and an iPad Mini 4. The latter is currently annoying me as it keeps tell me that it has failed to perform a Cloud back up, which I have not requested. In addition, I cannot find any way to switch off whatever is generating this message. The great thing about an M2 or M3 is that the user is always in control, whereas with IT and software we are daily being asked to surrender control.
New software releases may well contain ‘improvements’ but ,increasingly, they are being automated and giving us less control as consumers. The most annoying aspect is the fact that we are being used as ‘beta testers’ more and more frequently with updates that are not yet the ‘final product’ or even the ‘real deal’. I am slow to update eg Lightroom 5 still works well for me and a friend of mine had a lot of problem with El Capitan, so I have stayed on Yosemite. Personally, I have the feeling that IT and software are still very much a work in progress and they may indeed always be this. Apple and other successful companies are working to provide us with constant free updates but they still want us to spend some money every now and then. I predict a long term love/hate relationship between users and such companies but the monopoly/oligopoly aspect of such companies will make them vulnerable to attack. Just look at Microsoft, for example. It could happen again.
Finally, on the old tech/control aspect of this matter, I am reminded of a story about a motor industry guy who attended an IT conference as a speaker some years ago. All of the ‘young turks’ at the conference attacked the motor industry as being ‘old tech’. Then he rose to his feet and asked the audience " When has your car last stopped working unexpectedly and asked you to reboot/restart?" Game over, as the football fans might say. All I know is that my M2 will work in 50 years from now, if film is still available whereas I know that my iPad Mini 4 will not be working. Food for thought.
William
Many thanks William, I am so glad that I am not just a voice in the wilderness.
Regarding my comment about Iridient (not Iridium)… Last night I decided to turn my demo version into a fully paid version, partly because of what you had said, partly due to the man who appears to be the owner of the company, and partly due to his upgrade model…
http://www.iridientdigital.com/productUpgradePolicy.html
Whether I remain a Leica film user, or "upgrade" 🙂 to a Leica digital camera, Iridient will be useful.
As for IT, I spent my working life working with and supporting people who used mid-range IBM computers (AS400 its antecedents and descendants), I was always happy with their support model, even though the required initial investment was steep.
I abandoned Microsoft on 23rd December 2009, when my PC blew up and I had only recently cleared all the clutter out… I had previously purchased a MacBook Pro, which was thrown around the lounge by the family, so impressed was I that in 2009 I just went to the Apple store and picked up a mahoosive 27" iMac… with Snow Leopard… I have since added a couple of second hand PowerMacs and MacPros, and upgraded the MBP to a new MacBook, and the iMac (poor quality display) to a MacPro "Dustbin" with a NEC display, during which time I have become ever more saddened with the direction that company has been taking, possibly down to the Job’s "early bath" (to continue the football analogy).
The trouble is, that Linux/BSD does not measure up (that I have noticed), and I now regard Apple as the best of a bad bunch, but not by that much!
Sorry, I meant "design" not "deign"…
But to expand…
The Leica products are quite expensive, and a little bit eccentric, but once we handle and use them, we are hooked. It does not mean that they are not also innovators, they just seem to have a smidgen of respect for their customers.
We are hooked by the quality of the materials, by the adherence to backwards compatibility, they even produce cameras, that are pretty much unchanged (actually intelligently enhanced) for 60 years. Some of the lenses from the 1930’s can be used to good effect as William Fagan indicated in his last comments.
When I returned to them, following my experience with the M8, I bought an old M2 from RedDot Cameras… Just for a laugh, I registered ownership with Leica, and they emailed me the original handbook by return… A nice touch.
Adobe and Apple on the other hand, pay absolutely no regard, they just want the money and they want it now, they want more of it now, now, now. It is the Yankee selling method, very un-European, and it leaves a bad taste in the mouth, I am afraid.
Take a look at the photographic equipment produced by such companies as Sony and Fuji, much of it very good, but do we really need 50 new cameras a year? With previous customers sitting there with their redundant and worthless lenses and cameras wondering why they bothered.
Talk about charging for carrier bags!
Lots of luvverly profit Mike, but they could not see their way to letting me use one of their old products that is freely downloadable from their website, but non-functioning without their precious access code.
I won’t be playing that game…
I look forward to spending more time with the Iridium product, which seems to be the deign of a few good men, rather than a corporate bureaucracy.