After dropping development of Flash for mobiles, Adobe has restated its corporate strategy and emphasised the role of Cloud services. Guy Daniels reports.
When Adobe succumbed to the inevitable and announced it was ending its long and difficult attempt to make Flash the rich media standard of choice across mobile devices, doubts were expressed about its ongoing corporate strategy. After all, if not Flash, what else? Yes, Adobe has been buying and developing expertise in HTML5, but is the company now merely a follower rather than a sector leader?
To address these concerns, Adobe President and CEO Shantanu Narayen took to the company’s blog. He explained that the two big growth markets for Adobe were Digital Media and Digital Marketing, and that he would double the firm’s efforts in both areas. Flash for mobile simply wasn’t working out:
“The decision to restructure our business was a difficult one, and it has been tough for me as well as all our employees. The future of the Internet comes down to content – creating it and monetizing it. This is where our customers rely on Adobe, and it’s what is shaping our strategy moving forward.”
He described Digital Media as “creating and publishing content across media and devices” and Digital Marketing as “managing the impact and return from content”. Central to his plans will be touch and the Cloud. Regards the former, Adobe has already announced a suite of tablet applications that sit alongside the company’s desktop software (Photoshop, After Effects, Illustrator etc).
These are now available to buy for Android tablets, and will be coming to the iPad soon.
Linking everything though is the Cloud, or as the company calls its service, the Adobe Creative Cloud (see - Explanation: cloud). As well as providing the transparent connectivity between different devices for the media and marketing processes, the company is ramping up its efforts to move away from “purchase and update” payments for its software, and towards a subscription-based service for continually up-to-date versions.
Narayen describes this as “building a billion-dollar digital marketing SaaS business”. David Wadhwani, SVP & GM of Adobe’s Digital Media Business Unit, adds some pricing details:
“Membership to the Adobe Creative Cloud will be available in the first half of 2012 at a price of $49.99 per month for individuals and $69.99 per month per seat for workgroups, both for an annual plan.”
Would you pay $600+ for access to the latest versions of the full range of Adobe’s Creative Suite software? Or would you rather pay the upgrade fees for the specific software you need? Adobe is not the first to enter the software-as-a-service (SaaS) market, but it is one of the biggest, and it will be interesting to see what take-up it gets.
Whatever the results though, the advent of the Cloud has fundamentally changed the economics of the software business. Smaller SaaS companies have managed to gain market share through significant price benefits – not being lumbered with the traditional manufacturing and distribution costs – but their small size means they are also less well known.
The software giants have the means to spend massively on marketing and get themselves in front of their buyers, and as these companies (such as Adobe) start entering the SaaS space, what will this do to the pioneering smaller players? Will the freemium model play a bigger role, as the smaller firms are forced to give away most of their software to gain market awareness? Will the large and established companies manage the SaaS transition? As Narayen says, perhaps with a dose of false bravado:
“I’ve never been more excited about Adobe’s future.”
Maybe he meant “nervous”?
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