News The Dark Side of SaaS?

Published on May 23rd, 2013 | by Ori Manor

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THE DARK SIDE OF SaaS?

Unless you’ve been living under a rock, you probably already know that Adobe has moved its full suite of creative products into the cloud for their latest release and all future updates. What was once boxed software is now a software service, and thus instead of paying a large up-front fee, users who want to upgrade beyond version 5.5 of any Creative Suite product will now have to pay a monthly fee.

The move has been controversial, to say the least, but it’s worth examining in some detail because it’s almost certainly a harbinger of more boxed-software-to-SaaS (Software-as-a-Service) shifts. This will be doubly true if the move to the cloud proves profitable for Adobe, which it almost certainly will (we’ll talk about why later). But first, is this any good for consumers?

Let’s start with the main advantage of the SaaS approach, which is the significantly lower cost of entry. At just $30 per month for most programs, Creative Cloud allows anyone access to professional-grade tools without needing to save up hundreds of dollars. That means anyone can pick up a hobby like photography or video editing and immediately make use of some of the best tools in the world without having to shell out the big bucks. Sort of.

The problem, of course, is that for the Creative Cloud software to actually be cheaper than the boxed version, you have to be working on a short-term project. If you’re planning to use the software for a long-term hobby or a career, you’re going to end up paying way, way more.

Let’s take a look at Photoshop as an example. Prior to the launch of Creative Cloud, a boxed copy of Photoshop cost about $700. Now, the software costs $30 per month if you want to be able to cancel anytime, or $20 per month if you commit to a year of service in advance. That’s great if you’re working on a two-month photography project; you’ll save $640. And the Cloud is cheaper even if you’re using the software for a full year or two. But if you’re a professional photographer who uses Photoshop all the time? After just four years of Creative Cloud, you’ll have spent an extra $260 on Photoshop. After ten years, you’ve spent $1,700 extra.

And of course, those numbers increase exponentially the more software you use. If you’re a film company that makes use of the full creative suite, after a decade of work you’ll have spent an extra $3,400 compared to the price of buying a boxed copy.

Of course, the other big advantage of subscribing to Creative Cloud is that subscribers get access to free upgrades. And indeed, if you factor in the cost of the pricey upgrades to the boxed software, the prices begin to even out a bit. So if you’re the kind of user who just has to have the latest version, Creative Cloud may not be such a bad deal. But not everyone needs the upgrades. The beauty of the boxed software was that you had a choice — if Photoshop 3 did the job for you, there was no need for you to upgrade to Photoshop 4. With the Creative Cloud, you no longer have that choice. You’re paying for the upgrades whether you want them or not.

As someone who shelled out for Creative Suite 5.5 — the last full version of Creative Suite to be sold with an up-front price rather than by subscription — I know what my choice is and I’m glad I have it. The programs I have now work fine for my needs, and my needs aren’t likely to change anytime soon. I don’t want or need upgrades, and I certainly don’t need a new monthly bill in my life, so I’m staying the heck away from the Creative Cloud.

Beyond the lofty long-term price tag and the reduced degree of choice users have, though, I have deeper concerns about this move from products we own to products we rent from the company that produced them. SaaS is becoming popular in the tech industry primarily because it is more profitable and it can help prevent piracy, but aside from the lower upfront cost, it doesn’t add any value for users.

Instead, SaaS makes the software more reliant on an internet connection, and more reliant on the developer to continue operating the relevant servers and not go out of business. Because if Adobe ever goes bottom-up, there’s a decent chance you’ll lose access to everything in the Creative Cloud no matter how much you’ve paid for it over the years. This already happens all the time in gaming; companies decide multiplayer games are no longer profitable and simply shut the servers down. You still wanted to play that game? Too bad; you can’t because you don’t own it. You were just renting an account and some space on the company’s server.

For some reason, many consumers seem willing to accept this shift to software-as-a-service, even though it operates on the same basic economic principles as Rent-A-Center. Would you rent a couch? Would you rent a dining room table? If not, then why would you want to rent software, unless you only plan to use it for the short term? Many of Adobe’s customers are professionals that use their software tools every day; can you think of any other industries in which long-term professionals rent the tools they use every single day? I can’t.

But it doesn’t matter anymore for Adobe customers because they won’t have an awful lot of choice no matter which approach they prefer. Eventually, the older boxed versions will be too out-of-date to handle the latest file types or run on the latest operating systems. When my CS 5.5 is finally too outdated to use — years and years from now, I’m hoping — what choice will I have but to buy into the Creative Cloud? I have years and years of work; files and projects that are all in Adobe formats. I have invested huge amounts of time in learning Adobe’s products and workflows. Switching to a competing product is technically possible, but it would be an enormous hassle, and there aren’t any alternatives as comprehensive as Creative Suite anyway.

Adobe has a captive audience, and that’s why Creative Cloud is going to be a financial success in the long run. Plenty of artists aren’t happy about it, but ultimately they’ll still switch, and instead of buying the product once and then buying upgrades every few years, they’ll pay a smaller sum each month that adds up to a huge extra premium over the course of their careers.

And lest you think this doesn’t affect you, imagine paying a monthly fee to use Microsoft Word. It may not be as far in the future as you think that you are leasing almost everything on your laptop, and owning exactly none of it. Adobe’s inevitably profitable jump to the cloud and software-as-a-service is sure to attract other big companies, and I suspect it won’t be long until we hear about the next product that’s going from $100 to own to $10/month to rent. That’ll be cheaper for all of us in the short run, and companies like Adobe are desperately hoping we’ll be too stupid to bother thinking about the long run.



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