Adobe drops software sales in favor of subscriptions

Earlier today, Adobe announced a major change in strategic direction. Its Creative Suites, which bundle software such as Photoshop, Dreamweaver, Illustrator, Premiere Pro and After Effects into multiple packages for applications such as video post-production and web design, will be discontinued as of June, when the company introduces the next version of its Creative Cloud service. CS6, the current version of Adobe's Creative Suite, will remain on the market in both physical and downloadable versions, but will not be updated. In addition, individual applications will only be available in physical and downloadable versions in their CS6 form. As of June, the only way to get the latest version of Adobe's software will be to subscribe to either the complete Creative Cloud or to individual applications.

As with the current version of Creative Cloud, the new version will be priced at $49.99/month, and individual applications will be priced at $19.99/month. Existing Adobe customers who own either a complete copy of Creative Suite 3 or greater, or one of the applications in Creative Suite 3 or greater, can take advantage of three different pricing models:

• They can license individual applications for $9.99/month.
• If they own CS6, they can license the complete Creative Cloud collection for $19.99/month.
• If they own CS3, CS4, CS5 or CS5.5, they can license the complete Creative Cloud collection for $29.99/month.

After the first year, the price of individual applications will increase to $19.99/month, and the price of Creative Cloud will increase to $49.99/month.

Customers who use most of Adobe's applications, such as those in the former Production and Master Creative Suite collections, will end up saving money with Creative Cloud versus buying annual updates. On the other hand, customers who use fewer applications, such as those in the Design and Web Creative Suite collections, and customers who've typically skipped versions of Creative Suite in the past, will end up paying more on an annual basis for Creative Cloud subscriptions.

As it stands today, Creative Cloud is a good deal for many Adobe customers, but what we don't know are Adobe's future pricing plans. What's $49.99/month this year could be considerably more in a few years. My sense is that there's going to be a lot of resistance to the end of Adobe's Creative Suites and individual purchase options, and a fair number of creative professionals will begin evaluating open source and lower-cost replacements for Adobe's software.

Is Microsoft working on HTML5 design tools?

A few weeks ago, I wrote a post asking where the tools are that will allow mere mortals to write HTML5 that works like Adobe's Flash. Adobe has Dreamweaver, but it has a strong incentive to keep developers and users from migrating from Flash to HTML5. Microsoft has the Expression suite, but it also has Silverlight, so I thought that it wouldn't take up the challenge, either.

Yesterday, however, a Microsoft executive went on the record stating, and I quote, "The future of the Web is HTML5." That quote came from Dean Hachamovitch, Microsoft's General Manager for Internet Explorer, and although he was writing about web video, his comments can easily be seen as extending beyond just video.

It would make a lot of sense for Microsoft to go "all out" for HTML5 support, not just in IE but in its Expression Studio authoring tools as well. Silverlight has miniscule market share compared to Flash, so Microsoft could cannibalize Silverlight without hurting its revenues. Further, by making Expression Web a better HTML5 graphical development tool than Dreamweaver, it could steal market share from both Dreamweaver and Flash.

Adobe is vulnerable, and no one smells blood in the water better than Microsoft. Expression Studio 4 could be Microsoft's opportunity to leapfrog at least some components in Adobe's Creative Suite 5. Microsoft can offer Silverlight for those developers who want it, and to provide capabilities that won't be implemented in HTML5 for some time, but it doesn't need to protect Silverlight the same way that Adobe needs to protect Flash.

Something's coming from Adobe and Google

I'll be following two big announcements tomorrow. First, Adobe will launch Creative Suite 4 at events around the world. In this column, I normally write about Flash Video, but the applications in Creative Suite, including Photoshop, Dreamweaver and Acrobat, are Adobe's true bread and butter. I've been using betas of Dreamweaver and Fireworks CS4 for some time; both products, which came from Macromedia in the Adobe-Macromedia merger, now look and feel more like Adobe applications. Whether that's better or worse depends on whether you prefer the old or new user interfaces. To my eye, the functionality of the CS4 applications has been modestly upgraded, at best. We'll know more tomorrow.

(Update 10:14 p.m. Pacific Time, September 22, 2008) Adobe has posted details of the new CS4 bundles on its website, prior to the announcement events tomorrow. As with CS3, there are seven bundles: Standard and Premium versions of the Web, Design and (Video) Production bundles, plus a Master Collection that includes everything. There are no bargains, either: Unless you were one of the few people who purchased 3.3 versions of the bundles, upgrades start at $499 for the Standard bundle versions, $599 for the Premium versions, and $899 for the Master Collection. If you're starting from scratch, the Standard bundles are $1,399, the Premium bundles are $1,699, and the Master Collection is $2,499. (All prices are in US dollars).

Image via CrunchBase
The bigger announcement, at least in terms of press interest, will be the T-Mobile/Google annoumcement of the first Android phone, the HTC Dream, and of the imminent completion of T-Mobile's 3G mobile service rollout throughout the U.S. Android phones will compete with iPhones and Windows Mobile-based smartphones at the top of the mobile phone food chain, and the Dream is rumored to sell for the same $199 price (on a two-year plan) as the base 3G iPhone. The Dream will have a slide-out QWERTY keyboard, which promises to make it easier to use for power emailers than the iPhone (yet most likely still at a disadvantage vis-a-vis the BlackBerry.) All of the applications in Google's Android store will be free, at least initially, and anyone can post applications (the countdown to the first Android malware has already begun.)

I've been playing with the Android development system on my PC for some time, but I'm reserving judgment on how the Dream performs until I get a chance to try it. I used to be a T-Mobile customer, and if the Dream lives up to the hype, I may well switch back. Again, more tomorrow.