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Software vendors want you to subscribe to their software rather than buy it. It’s purely a money grab on their part, but is it a good deal on your part?
Adobe was the first large company to switch from a purchase orientation to a rental orientation. (OK, people can argue that Oracle switched before that and IBM has always been that way, but that’s not the point of this rant, so hang on to those thoughts. Thank you.)
Adobe did some research on the topic before they entered the rental market and what their research told them was that people did not always upgrade their Adobe products in a timely manner. Indeed, most people skipped at least one version and many skipped two versions before upgrading. With releases every two years that meant that Adobe would see money from a customer in one year and then not again until four or even six years later. If you depend on people giving you money then model kind of sucks.
Enter in the Adobe Creative Cloud. Instead of paying $2500 for a suite of Adobe tools you can pay $30 per month (existing customers) and get the entire Adobe lineup. $20 a month gets you a single app whereas you would normally pay $700 for Photoshop. So who benefits?
Well, Adobe gets a more consistent income. They can come out with versions faster, incrementally improving the product instead of trying the big bang approach.
Users have a much smaller price tag to pay all at once. While it is cheaper in the short term it works out to be more expensive in the long term. The more Adobe tools you use, however, the more advantageous it is for you so that if you are an Adobe fan boy … it is most definitely cheaper.
And, let’s not forget, if you start using more tools and become an Adobe evangelist then more people will take a look at Adobe (wow, look at that low price of entry!) and perhaps get a subscription themselves. I have to admire Adobe as I believe with their current plans they have hit the right price point with the market.
So, who else is doing this? Darn near everyone wants the rental market. Software as a service is the rental market, but many of these companies never really sold their software in the first place, so they don’t have the same marketing power and customer base to capitalize on. Of the big players many have realized that a little bit of money from a lot of people is the key to success. Microsoft’s Visual Studio online is an example of a change from Microsoft. For $45 per month you can get Visual Studio Online Professional, essentially the Professional version of the VS toolset with TFS in the backend, or you can pay $667 to buy it outright. If you only need it for a couple of months, you rent the tools. Microsoft is willing to bet that you will want to stick with the tools once you try them.
The ability to add/remove subscription licenses makes things much more flexible for an organization that fluctuates in size or fluctuates in technology use. And, while it makes some things easier, that ease of use does come with a cost.
So, is it better to subscribe or buy? For me personally, it all depends on how mad my wife would be if I bought it versus rented it. (By the way, Adobe has an excellent Education program. Thank goodness my daughter is going to be in school for at least another five years!!!!)