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Adobe Abandons Shrinkwrap for the Cloud

CEO Shantanu Narayen says Adobe's going 100% cloud; the cloud’s recurring revenue will be more predictable

Adobe Monday became the first major software house to dump traditional shrinkwrapped software for cloud subscriptions.

Others like Microsoft have a foot in both camps. Adobe says it’s going 100% cloud. The announcement was made at the Adobe MAX conference,

There won’t be any new packaged versions of its flagship Creative Suite; Creative Suite 6.0, which launched this time last year, will be the last.

Adobe said it’s going to sell and support its software only online through its year-old Adobe Creative Cloud, which has reportedly gotten 500,000 paying subscribers since it started. Adobe expects to have four million subscribers by the end of fiscal 2015.

CEO Shantanu Narayen (pictured) said, “We wanted to align the company with the future of the creative process.”

Adobe will abandon its usual 18-month or two-year upgrade cycle and instead update the software continuously.

The widgetry includes Photoshop, Illustrator, InDesign, Dreamweaver and Flash.

The first subscription-only upgrade will be available starting June 17and includes the next generation of Adobe desktop applications, including Photoshop CC, InDesign CC, Illustrator CC, Dreamweaver CC and Premiere Pro CC as well as Lightroom and Acrobat.

As you might imagine, the letters CC for Creative Cloud are being used to distinguish the online software from the old-fashioned CS (Creative Suite) packages. The CC stuff is supposed to “re-imagine the creative process.” It’ll work on Mac OS, Windows, iOS and Android.

The move, provided customers accept it, should theoretically flatten out Adobe’s revenue stream and relieve the company of the expense of producing and distributing packaged software. It will have to adjust to not getting big fat upfront payments. Instead the cloud’s recurring revenue will be more predictable.

Existing customers of Creative Suite will be offered discounts of about 40% on the first year of service to get them to go to the cloud. Thereafter an annual subscription will cost $50 a month for individuals. Corporate subscriptions, which include cloud storage and administrative tools, will cost $70 a month per user.

Creative Cloud subscriptions for the month can be had for $75. Customers can buy access to a single component of Creative Suite, say, oh, Photoshop for $20 a month for a one-year commitment.

The standard off-the-shelf edition of Creative Suite 6.0 retails for $1,299. The off-the-shelf Master Collection including all Creative Suite tools goes for $2,599, which could buy a lot of cloud time. Both will be available for the foreseeable future Adobe said, but won’t get new features. They’re reserved for the cloud.

The company is promising to improve the storage, synchronization and content sharing aspects of its cloud.

Adobe told All Things Digital it was going to the cloud because it was too hard on engineering to maintain two code bases: one for the cloud and one for boxed.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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