In a sign of the times, Adobe announced last week it was halting future updates of its highly successful Adobe Creative Suite in favor of expanding the subscription-based Adobe Creative Cloud. This raised some eyebrows, especially among a vocal group who see the subscription model as yet another way to make extra margins without adding real value for users. Frankly, these detractors are missing the point.
In reality, the subscription model simply makes sense for today’s economy. Business users are already engaged daily with subscription-based services: streaming media outlets, mobile devices with monthly data plans and Web-based business applications like Salesforce, for example. As a result, users have come to expect highly on-demand services that give them exactly what they pay for, for as long as they need it and have it updated in real time. Why should it be different for any kind of software?
Businesses don’t want to “own” something that’s obsolete the moment they buy it. With a Web-based subscription software model, they dodge the “planned obsolescence” that traditionally forces them to buy new software as older versions become unsupported. They’re also saved from the unnecessary cost and hassle of buying multiple licenses for different devices and operating systems.
Software companies are beginning to understand that subscription models make economic sense for their business as well as their customers. By charging monthly or per-usage fees, they avoid the money pit of perpetual licenses as well as the obligation to support multiple versions of software. Further, many software manufacturers recognize that a pay-per-usage model is the most practical way to deliver software with cutting-edge features like cloud storage and synching, especially across multiple devices and operating systems.
In fact, the popularity of software offered as Web services or Software-as-a-Service (SaaS) is a large part of why subscription models are taking off. As mainstream computing has shifted to become multi-platform and multi-device, it makes more sense to approach software delivery as a subscription service, especially one that can be accessed anywhere, at any time. And since the HTML5-enabled Web browser is now the only real “operating system” users care about, it’s also the best way to deliver software.
The shift to subscription and Web-based software is a logical next step for most businesses. While the naysayers will certainly persist, the pay-per-usage, Web-enabled and device-friendly software delivery model just makes too much sense for today’s businesses to pass up.
Open-Xchange is a collaborator in the 2013 Future of Cloud survey hosted by North Bridge Venture Partners, 451 Research and GigaOM. Click here to take the survey and share your experiences and opinions on cloud computing.
Rafael Laguna is CEO and co-founder of Open-Xchange, or OX, providing leadership and strategic vision across the organization. Under Rafael’s guidance, OX developed its product offerings to include SaaS cloud architecture in collaboration with key partners. Rafael has extensive experience in enterprise software, having previously held the position of VP Marketing and Business Development at SUSE Linux as well as being CEO of Micado. Rafael also acts in an advisory role for the Open Source Business Foundation.