Despite gripes about monthly licensing fees, it appears Adobe’s new Creative Cloud subscription model might succeed after all. Adobe announced that its subscription-based Creative Cloud service has reached over 1 million members, better than Adobe had expected.
“We exceeded one million subscriptions during Q3, demonstrating that the transition to Creative Cloud is happening sooner than expected,” Shantanu Narayen, president and chief executive officer at Adobe, said.
Within its Q3 earnings report yesterday, Adobe announced that Creative Cloud has reached 1 million 31 thousand paid subscriptions, with about a third of those users joining in the past three months alone. Adobe also reported that enterprise adoption of Creative Cloud was stronger than expected.
According to Mark Garrett, executive vice president and chief financial officer at Adobe, the success of the subscription model will spark more long-term growth at Adobe:
Our customers are overwhelmingly choosing subscriptions instead of perpetual model licenses which is accelerating our business model transition. During Q3, 41% of our revenue was recurring and we exited the quarter with record deferred revenue on our balance sheet. These results are building a stronger, more predictable revenue model for Adobe which will drive higher long-term growth.”
New Subscription Model, New Incentives
Creative Cloud is the newest version of Adobe’s Creative Suite and includes cloud-based versions of Photoshop, Illustrator, InDesign, and more. By replacing steep one-time licensing fees with smaller monthly subscription plans, Adobe hopes to create a more fast-paced and adaptive software environment. Unlike previous versions of Adobe’s creative apps, Creative Cloud apps update immediately as new features are available, offering creatives top-notch software every time they open Creative Cloud.
One driving force behind the growing number of Creative Cloud subscribers could be the new tools it offers developers. Adobe recently launched Generator, a tool that allows designers and developers to create image assets in Photoshop and access them in Edge Reflow. Generator then syncs the assets in real-time as creatives work. Another reason behind the positive reception of Creative Cloud might be the special subscription packages Adobe offers pre-existing Creative Suite users. Earlier this month Adobe announced the Photoshop Photography Program, which offers existing Photoshop users a lifetime subscription price of $9.99 per month for Photoshop CC, Lightroom 5, a Behance ProSite membership, and 20 GB of cloud storage.
New Hardware Coming from Adobe
Besides announcing its subscriber milestone, Adobe also announced two new pieces of hardware in development: Mighty, a cloud pen, and Napoleon, a digital ruler, both designed to connect physical touch with Adobe software.
Previously Mighty and Napoleon were in a technology exploration phase. Now the products are planned to be manufactured and shipped by the first half of 2014.
The two new devices are designed to bring the creativity of the hand working on paper to the advantages of working on Adobe’s Creative Cloud. Since Mighty is pressure sensitive and cloud-connected, it can draw natural and expressive lines while letting creatives maintain access to their favorite personal digital assets like brushes, colors, and copy/paste functions across devices. Michael Gough, Adobe’s vice-president of experience design, said,
With our first tools for the new creative — Project Mighty and Napoleon — we are confident that we can help make digital creativity both more accessible and more natural by combining the accuracy, expressiveness and immediacy of pen and paper with all the advantages of our digital products and the Creative Cloud.”
Mighty and Napoleon will be complimented by new software being developed specifically for the new hardware. Project Parallel will be a drafting app for iPad, and Project Contour will work essentially as a Kuler for shapes, allowing creatives to take pictures of their favorite objects and shapes on their iPhone and access them with Napoleon on the iPad. Countour will help simplify architectural line sketching, drawing, and ideation.
Do you subscribe to Creative Cloud? If not, what’s holding you back?