Joe Maller.com

Cost of Adobe’s new Creative Cloud vs. Creative Suite

Adobe recently announced their new Creative Cloud software subscription service. While regular paid updates have essentially already made Creative Suite subscription software, I wanted to know if there was any cost benefit in switching our conventional CS Master Collection licenses over to Adobe’s new Cloud.

After projecting some numbers, I was disappointed by what I found.


(source spreadsheet)

Should you switch?

Starting from scratch? Yes.

Creative Cloud is clearly a smart financial move for those who don’t own any Adobe software. Buying Creative Cloud vs. a full price Creative Suite Master Collection license will save money for the foreseeable future.

Upgrading existing licenses? Erm, maybe?

For existing users, the value of Creative Cloud gets murky. It looks like Adobe set their price based on a straight transition of existing Creative Suite users to Creative Cloud. When compared to the standard Master Collection upgrade path for existing licenses on a 12-month product cycle, Adobe’s revenues are precisely maintained–with a slight tip to their favor. I believe this is shortsighted and fails to recognize the potential of growing revenues by increasing licenses.

Adobe’s Introductory offer for current CS customers ($29.99/month, for one year) ends on August 31, and taking advantage of this offer makes Creative Cloud much more compelling. With standard pricing ($49.99/month), Creative Cloud subscription costs would equal Creative Suite upgrade costs after 11 months, though the advantage sawtooths back the following month. Taking advantage of promotional pricing pushes cost-parity back to almost 4 years.

Teams and temporary workers? Probably not.

Team-ready pricing ($69.99/month) seems the most broken. Maybe there’s a cost/complexity crossover with bigger groups, but for a small office I can’t imagine any collaboration or turnover features would justify the significant additional costs.

The month-to-month price of $74.99 is unfortunate too. Paying for eight months of Creative Cloud is the same price as a year at standard prices (four months costs the same as a year at the promo rate). A small army of fine artists support themselves by freelancing as typesetters, retouchers and production artists for only part of the year. They need software, but for many studios with a distinct busy season, those licenses sit idle for half the year–effectively doubling the cost of necessary software.

Conclusion

One would think the truck-loads of money Apple is making on volume might make a compelling argument for Adobe to dramatically undercut the price of Creative Suite and push their customers towards Creative Cloud. In 2007, Steve Jobs was asked if he feared cannibalization of Mac OS by iOS. He replied that if there was to be cannibalization of Apple products, it should be by Apple. This is exactly how Adobe needs to start thinking.

Reducing the price of Creative Cloud by a third or even half would not diminish the perceived value of Adobe’s apps, but it would help dissipate the perception that Adobe’s products are impossibly expensive. This poisonous idea carries on long, long after people leave school and is partly why Adobe always tops lists of most-pirated software.

Going back to Apple as an example of doing things right, Creative Cloud should not have five price tiers (promotional, standard, team, student & teacher and monthly). The CS6 product grid is bad enough. Educational users should not be rewarded for forswearing commercial work, nor should they be financially punished when their skills are practically applied in the marketplace. The Student & Teacher price should be the only price. If Creative Cloud was simply $30/month–with no caveats–I’d recommend it without hesitation.

For Adobe’s existing customers, Creative Cloud is a slightly better deal, but disappointingly, not by much. When compared to the cost of upgrading existing software, Creative Cloud is more of an installment plan than a subscription. It costs the same, but the payments are spaced out over time.

We’ll be switching over, but with full knowledge that the monthly fees are not really saving us anything in the long run.

Other thoughts

  • Creative Cloud Mac/WinCreative Cloud appears to be platform agnostic. Being able to install on Macs and PCs would be a big plus.

  • Immediate updates sounds good, but it could also present a huge headache if a critical bug or backwards incompatibility slips through. If an update breaks an application, which has happened in the past, will Adobe offer rollbacks to previous versions?

  • Promised “community collaboration” is a potential security disaster. Having worked on projects with sensitive information, the potential for a slip-up is terrifying. Agencies should be very concerned about pre-release materials being “shared” before they’re public.

  • A lot of studios purchase every-other Creative Suite upgrade. The chart clearly shows this is cost-neutral. While there may be some benefit because known systems increase productivity and reduce training costs, Adobe’s upgrade pricing model has eliminated any cost saving from skipping versions.

    Adobe’s Creative Suite release history:

    • CS1: September, 2003 (19 months)
    • CS2: April, 2005 (25 months)
    • CS3: March, 2007 (18 months)
    • CS4: September, 2008 (19 months)
    • CS5: April, 2010 (12 months)
    • CS5.5: April, 2011 (13 months)
    • CS6: May, 2012

    In 2011, Adobe announced they had switched to an annual release cycle.


  • http://twitter.com/Rirath Rirath

    Fairly spot on Joe, echos my thoughts and findings pretty well.  Been mulling over this for the last few days.  Of course, one for the “other thoughts” is “You can stop upgrading if you want to.” – With Cloud, it’s over.  Also, Cloud comes with Lightroom (eventually), which isn’t in the suites, saving $99-$149 or so + any upgrades over the years.

    I’m with you – if it were $30/mo, I’d be all over this.  Heck, if I could even just get Production Premium for $30 a month, I’d have no qualms!  It has everything I need.  I don’t want InDesign, DreamWeaver, or the other little throw-ins, to be honest.That said, think I’m going the cloud route, at least for one year.  Let’s see what Adobe can do.

    • http://joemaller.com Joe Maller

      excellent point about how Creative Cloud forces upgrades forever to keep the software working. 

  • http://twitter.com/AesTechie Shar Marachi

    I have CS 5.5 Design Premium. If I opt to use Cloud, after the one year, I’ll have spent $360, instead of $375 for upgrade to CS6, but I won’t own CS6, and will then start paying $600/yr to continue using it. I love the Cloud option to use all the apps (but when, and who really does?) but this feels like a big fat trap!

    • rb

      I’m in the same boat. Here’s where my head is now: go with the promo price on the cloud for the first year. I’ll see how it goes and if I end up getting any added value from the other programs that come with the cloud. At the end of the 1-year subscription, if I decide it’s not worth it, I can upgrade my version of 5.5, I’m guessing for close to the $375 price it is today. It will prolly work out to the same amount spent over the next two years assuming I did annual upgrades. Does anyone see a flaw in this plan?

    • http://joemaller.com Joe Maller

      A couple points:

      1. We “own” shelves of obsolete software. Attempting to hang onto old software in an office doesn’t work well. First, the computers and OS might leave the software behind. Also, computers fail. If we’re committed (stuck) with obsolete systems then we either have to stockpile those old systems or troll Ebay for used hardware. And what happens if things start going really well and we need to add a few seats?

      2. Most designers enjoy upgrades. Yes there’s a slight productivity hit, but it keeps things fresh and helps make the workplace more compelling. I believe this helps, however slightly, with retention and attracting new talent.

  • noblemo

    Over a two-year horizon the trade-off is more about whether buyers place a higher value on access to additional programs through the cloud service, or better control of security and change management through periodic upgrades.

    Assuming pricing does not change much over the next two years, the cost for a single license will be about $500 per year whether upgrading every year, upgrading every two years, or subscribing to the cloud service. Consider the current street pricing as of 8/25/12:

    – Upgrade to MC CS6 from CS5: $1014 = $507/year
    – Upgrade to MC CS6 from CS5.5: $510 = $510/year
    – 2 years of Creative Cloud service: $960 = $480/year

    The price for Creative Cloud is based on $30/month for the first year and $50/month thereafter.

    Users expecting to keep the same release for three years are better-off buying an upgrade (assuming current pricing is maintained over the next few years):

    – Upgrade to MC CS6 from CS4 or CS3: $1230 = $410/year
    – Subscribe to 3 years of Creative Cloud: $1560 = $530/year

  • Impact

    I am a student and the cloud option is the smartest thing I could do, at a now reduced 15 per month I will pay 180 a year, vs paying 600 for the whole suite approximatly every on and a half years, so creative suite is the best option I could take.