Since 1982, when Adobe was founded in San Jose, Calif,. its design and publishing tools were sold as boxed software at retail or under perpetual licensing agreements. In 1989, Adobe introduced Photoshop which dominates the market for graphics editing. In 2005, Adobe acquired Macromedia whose popular products were Dreamweaver for Web development and Flash.
In May of this year, Adobe caused a stir among its customer base by ending perpetual licensing and offering its products mostly as software as service under subscription plans coupled with a move to the cloud.
Under the old perpetual licensing model, many customers did not update to newer versions if they did not need the new features. Further, the subscription model facilitates bundling of less popular products with more popular products such as Photoshop.
This was a highly risky move on the part of Adobe because many users did not like it. For many users this was a significant cost increase. A survey by CNET and Jefferies showed that 76% of CS6 customers did not plan to subscribe to the new subscription model. CS6 refers to the Creative Suite 6 that bundles Photoshop, Illustrator, InDesign, Dreamweaver, Flash Professional, Fireworks, Acrobat X Pro, Bridge, and Media Encoder. Previous spat with Apple AAPL over Flash added to the risk. Steve Jobs had refused to support Flash, then dominant on the Web, in its new products.
After the market close on Tuesday, Adobe announced its quarterly results…..Read more at Forbes
