A lot of big technology companies talk about their cloud strategies. But few have been as bold in their approach as the San Jose, California-headquartered Adobe Systems, the maker of Photoshop and Acrobat software. In a dramatic shift, it has dispensed with its pay-once-use-always business model and moved on to a subscription service, paving the way for the company to offer its expensive products at much affordable rates, curb rampant piracy and to expand its revenues.
“The Wall Street likes businesses that are growing and have a predictability of the business,” says Umang Bedi, managing director, South Asia, Adobe Systems. “Our second quarter results ended May 30 show that customers are increasingly seeing the value of the Creative Cloud. The company’s transition to subscriptions is proceeding well.” Creative Cloud—a bundle of integrated software for creative professionals—has also reached the Indian shores. India, today, has twice the number of creative professionals than the US, according to Bedi.
Adobe said it added 464,000 paid Creative Cloud subscribers in the second quarter, ending the quarter with 2.3 million paid subscribers. The company said it expects to have 3.3 million subscribers of its Creative Cloud suite at the end of fiscal 2014, up from its earlier forecast of 3 million. This result has not come easily, and senior Adobe management have made bold changes in recent years to reinvent the 30-year old technology company. Recently,
the Adobe India MD spoke to
Sudhir Chowdhary about the company’s reinvention and the benefits of this new business model to his firm and to the consumer. Excerpts:
Adobe Systems has transitioned from its pay-once-use-always business model to a subscription service. Tell us something about your transformation story.
Adobe started as a company about 30 years ago. At that point of time, we were really focused on doing just one job—revolutionising desktop publishing. Somewhere in the early 90s, we found one niche segment of the market which was focused on creative professionals. A creative professional is someone who is creating content in any medium—print, online, photographs & images, or video.
What we have done from the 1990s to about 2003-04 is that we really established ourselves as the defacto standard in the creative community. Today, when you think about most of the newspapers that are printed in the country, the entire layout is done using our technology. Same is the case with magazines and online content. We had something which we call the Creative