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Adobe pricing plan raises concerns

Confusion in the Cloud
May 22, 2013

College officials are concerned and confused by new licensing terms from Adobe they fear will dramatically raise costs.

While colleges have not yet sorted out some of the major issues, the changes by Adobe are already prompting at least a few college officials to say new versions of company's popular creative software will be unaffordable.

Adobe, the maker of Photoshop, InDesign, Acrobat and more than a dozen other products, recently changed the way it sells its software.

The company will stop updating its “perpetual” software, which is software users can buy once and use forever -- in other words, the traditional software model most consumers understand. Instead of that, Adobe is rolling out a “Creative Cloud,” which requires users to pay subscription fees as often as every month to use and keep using its products. The company pitches the new model as a way for users to access and sync their work from anywhere. That's a change from traditional software products that were made for users on one device or in one place. But the change also allows Adobe to access a stable flow of cash from its users who sometimes upgrade only every several years, a purchasing cycle that can create instability for a company.

Higher education procurement and technology officials worry they will see dramatic price increases because they will have to continuously pay to use Adobe products rather than being able to upgrade only when there is some key new feature their students and faculty members must have.

Some individual consumers have already begun revolting against Creative Cloud. Nearly, 23,000 people have signed an online petition urging Adobe to drop its subscription model.

In e-mail exchanges with each other and in interviews, several college officials said they are confused by the new institutional licensing terms, worried about upwardly spiraling costs and have asked about switching to alternative products.

Adobe, for its part, says some customers will see price increases while others will not.

"There is no question about it, there are some customers that will see a price increase," said Johann Zimmern, a director in Adobe’s education unit.

Zimmern said he’s heard many of the customers’ complaints, but he said a lot of them have to do with the company’s inability to get clear information to users. Still, he said, he understands that this is a big change for customers. He compared the shift to a car company telling all of its buyers that they need to lease and could no longer simply buy a  car.

It’s not as if the confusion was unexpected. In late March, the company’s quarterly financial report warned investors “our shift to a subscription licensing model may result in confusion among our customers, partners, resellers and investors.” Now, Adobe's website links to a blog post dispelling myths about the Creative Cloud.

Indeed, it's unclear how unclear everyone still is. College officials were wary of quoting exact pricing figures to Inside Higher Ed because they had yet to get a firm understanding of the new pricing structure. There also continue to be misunderstandings about Adobe’s plans. While it’s called “Creative Cloud” and offers cloud-based features, including online storage, the software itself can be downloaded and used by users who are not connected to the Internet, though users will have to connect every few weeks to renew their subscriptions. (Some officials have suggested that users have to be constantly connected to the Internet to use Adobe's new products -- this is not true.)

Jeremy Anderson, an instructional technologist at Quinnipiac University, said about 200 computers at the university currently run Adobe’s Creative Suite. Currently, the university only has to pay for a license for each computer. Under one new licensing model from Adobe, he worries the university will have to have a subscription fee for each user, which could cost the university substantially more.

Under that licensing plan, the change will be a bit like this: Suppose a five-member family has two cars. In the past, universities could allow five members to share the two cars so long as they were not using them at the same time. Now, university officials said Adobe is essentially forcing them to buy a car for every single member of the family.

“They’ve said they are flexible to figure out how to make it work – that all remains to be seen,” Anderson said.

Zimmern said some of the people complaining have yet to speak with Adobe itself. He said the company gets no benefit from making it harder for educational users to pick up its products.

"They want to be on this latest version and just by listening to some of the announcements Adobe made, they are afraid that is not possible for them -- which is not the case," he said.

For instance, he said some some educational users do not realize there are institutional prices that are below the prices individual users have to pay.

Allan Chen, the chief information officer at Menlo College, has taken a look at the licensing terms and is ready to stop using some Adobe products altogether because he thinks the university could face a roughly 700 percent increase in costs. Even though its user base is small – only about 20 people – that is an unaffordable increase, Chen said.

“We’re forced to look at alternatives to Adobe,” he said.

Several procurement officials and chief information officers – including some who have been the most vocal online about Adobe’s move -- did not return calls seeking comment or declined to comment on the record, at times citing the labyrinthine approval process they faced from their universities’ public relations offices.

But one procurement official at a large university system said college officials across the country have been slogging through terms and conditions and are now appalled at Adobe’s plans, which the official estimated would cost five times more than the official’s system could afford.

The procurement official said Adobe seems to be disorganized and that college officials do not want to buy into a trial balloon that the company may later abandon. To address officials’ concerns, the official said Adobe needs to come up with something reasonable and rational.

Zimmern said some universities are looking at the prices Adobe plans to charge consumers and assume the same rates will apply to each college. He said the company has every interest in keeping down prices for universities because it wants to make sure generations of creative users grow up using Adobe’s products. The education market, he said, is Adobe's “bread and butter."

 

 

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