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Forbes article vs Economist RE Adobe

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Chris Pettit
Forbes article vs Economist RE Adobe
on Apr 4, 2014 at 10:38:11 pm

Choice tidbits from analysis on Forbes.com about Adobe and its profit/stock price equation. (This is in marked contrast to a previous Economist piece that was the usual glowing and yet factually messy analysis):

…While it’s heartening to see Wall Street for once not totally obsessed by the short-term, one can also ask: is this a bold, creative customer-friendly management decision, as The Economist suggests? Or could it be a desperation move in the form of a financial gadget that is aimed at covering up a lack of innovation?

...If Adobe is successful in getting enough users to buy into the leasing plan, then it’s true they will have a guaranteed financial bonanza, because the users will be imprisoned in the Adobe ecosystem. If users ever stop their subscriptions, their software will become unusable and their old files will be inaccessible.

...The risk for Adobe is that they are not only transitioning from software as product to software as services: they may also be transitioning from a maker of software that users love to a firm that customers see as aiming to lock them into long-term arrangements, regardless of performance or innovation.

...Simply calling their Cloud service “Creative” doesn’t necessarily make it creative. The underlying problem that Adobe was facing with its old business model was in charging for upgrades at prices that weren’t seen as warranted for the innovation that Adobe was offering. Financial gadgetry and ingenious leasing contracts can cover up this kind of problem for a while, but ultimately, unless Adobe can delight its customers with significant innovation that warrants continued payments of significant subscription fees, Adobe will be ripe for disruption from competitors who will offer the same for much less.

This article is the first time I have seen any Wall Street analysis that even bothered to do its homework enough to understand that Adobe CC is not a service running on servers but simply applications that you download. Frankly I haven't seem many analysts that even understand software much less creative software. Given the feature list just released for the Adobe video apps, some of the Forbes observations seem particularly relevant.

http://www.forbes.com/sites/stevedenning/2014/03/28/should-wall-street-rewa...

http://www.economist.com/news/business/21599370-adobes-bold-embrace-computi...


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Ricardo Marty
Re: Forbes article vs Economist RE Adobe
on Apr 4, 2014 at 10:56:43 pm

cc is a bubble in the making.


ricardo marty


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Dave LaRonde
Re: Forbes article vs Economist RE Adobe
on Apr 4, 2014 at 11:21:42 pm
Last Edited By Dave LaRonde on Apr 4, 2014 at 11:24:37 pm

Amen to that article!
It nicely summarizes all my concerns with with Creative Cloud and even mentions the notion of competitors offering the same thing, and perhaps better, for less.

Dave LaRonde
Promotion Producer
KGAN (CBS) & KFXA (Fox) Cedar Rapids, IA


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David Mathis
Re: Forbes article vs Economist RE Adobe
on Apr 5, 2014 at 12:07:58 am

One company that has things right is Red Giant, without question. With the Universe you have the option of paying a monthly or annual fee, which is reasonable in addition to a lifetime membership. I also like the direction Rampant Design Tools is going as well. The price is reasonable, there are benefits and incentives for joining. There is nothing wrong with a subscription plan as long as it is not the only option. I admire the direction, the transparency, and the options that both Red Giant and RDT has to offer. I will be happy to do business with them.

When a subscription only model is forced upon me, then I have reservations and with good reason. This does not mean that I will necessarily avoid subscribing, but will proceed with extreme caution.

To be fair, Adobe is not the only corporation that has made a blunder of some sort. Apple did it when Final Cut Pro X first came out. Just my honest opinion and two cents, whatever it is worth.


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Chris Pettit
Re: Forbes article vs Economist RE Adobe
on Apr 5, 2014 at 2:44:37 am

[David Mathis] "
When a subscription only model is forced upon me, then I have reservations and with good reason. This does not mean that I will necessarily avoid subscribing, but will proceed with extreme caution."


So true. Such an easy solution it would seem. Offer SOME way out Adobe. For crying out loud. But no...

Management is currently led by the "all or nothing", "subscribe or be shut out" thinking. Good luck guys. As the Forbes article implies:

...a maker of software that users love to a firm that customers see as aiming to lock them into long-term arrangements, regardless of performance or innovation


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Ricardo Marty
Re: Forbes article vs Economist RE Adobe
on Apr 5, 2014 at 3:27:39 am

the article also mentions corel as a posible future competitor. what few know is that corel purchased pinnacle which was previously avid studio which was built on the new liquid code that was never fully developed by avid but nothing holds corel from developning it into powerfull nle.

liquid rocked

ricardi marty


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