This announcement has been like the equivalent of Adobe realizing that they can milk the consumer more often and get something more for little effort. It is a move to please the company owners while essentially demonstrating contempt for its consumers.
On the one hand, this may be a good time to invest in Adobe stock. I predict they have several internal estimates on what this change will do to their revenue over the next couple of years, especially around the end of year 1, when their rental rates will double. They probably expect that the results will bring in another mountain of cash and they will do everything they can to make this added revenue image shine. We can’t credibly expect them to be anything but dazzlingly narcissistic about their projections.
On the other hand, I’m reminded of the once great company named Ashton-Tate (A-T). Ashton-Tate used to make the industry standard database platform, which they called dBase. This platform went through several major revisions, and was used by vast numbers of corporations. No other database platform could do what they did and due to this A-T became like pigs at the trough.
A story told briefly, over time, A-T fell in love with their success, and greatly slowed development of their product. By the 4th major release, there were rumors that A-T employed more lawyers than software engineers. A-T focused on chasing competitors from making similar platforms, while, you guessed it, substantially raising the price to their loyal customers. As a result, A-T long ago disappeared from the market, along with all their major and minor product offerings. Does anyone remember the great application named Framework? Of course, in hindsight, A-T behaved stupidly. A company generally doesn’t profit by increasingly milking its customers. Had they continued development aggressively, they may still be a dominant player.
On yet another hand, with several BOD members at Adobe who are also on the BOD of other major software corporations, there can be no doubt that this amounts to a sophisticated and calculated market test. If it is successful, we may witness over the next three years or so, a nearly complete migration towards a monthly expense for most or even nearly *all* software, from the OS to every application and utility used. It is as if the conclusion has been made to profit more by milking the consumers monthly rather than every other year.
In addition, this change may drastically reduce the opportunity for software piracy. All by itself, this will work to undermine some large piracy based enterprises everywhere they exist, and that will translate into a big revenue increase.
Of course, Adobe altering course again in the not too distant future is always a possibility. Should the BOD find that the revenue is significantly less than projected, there is nothing to stop them from partially or totally changing course, by adjusting the monthly subscription fee, or abandoning the subscription model all together.
Any license statements used to hide behind can be altered with only the effort of simple changes to the license agreement. After all, Adobe just did a HUGE push to coerce as many as they could to update to CS6, stating no more discounted updates unless everyone jumped aboard with the CS6 platform. This amounts to a carrot and stick coercion, er, license change. Evidently it worked. Ironically, it can now be seen as another way to drive the herd. And, surprise, yet another ploy is in evidence with this push to their new subscription platform with the sole goal of increasing revenue.
As has been implied again and again, fear is a major factor. Count the number of people in this thread who have noted that should they abandon PS, they will lose access to their files. In the end, Adobe is very confident that most will pay their toll.
As to anti-trust litigation, while anyone can sue anyone, the bigger question is do they have an arguable case against Adobe? I don’t believe so. Adobe has access to too many first rate legal minds to expose themselves in this way. This doesn’t mean there won’t be legal challenges. That is part of the cost of doing business.
In the end, evidently Adobe believes the consumer exists to be coerced into paying ever more and more frequently. The bigger the business, the easier it is to coerce. Would anyone re-train a staff of 20 or 100? Not only is that is a big investment in time and money, add to this that there is no equivalent platform and the answer is ….
The remaining question that this change seeks to answer, is not can you milk the consumer monthly, but how much can you drain them? Unless there is some real competition (there isn’t), or unless Adobe is stupid (so far, they are not) they can’t really lose more than the percentage who will not pay for a subscription.
But it raises an interesting if academic question, and that is, at what point does a company exist to please it’s business owners instead of pleasing its customers? The answer implied by this change is: when the company has a valuable product no real competition.