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Author Topic: Adobe's Briefing slides at Adobe MAX  (Read 6247 times)
Schewe
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« on: May 21, 2013, 12:39:08 AM »
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In case you weren't there (I wasn't :~) there are some briefing slides Adobe made available (as a PDF) in case you are interested...I'll make no comment other than to mention from Adobe's numbers, CS6 Product Family perpetual licenses for @home individuals was about 10%...Creative Pros was about 40%, @Work Creatives (whatever that means) was about 25% as was EDU. So, this is Adobe's view of the industry...
« Last Edit: May 21, 2013, 12:42:38 AM by Schewe » Logged
Rhossydd
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« Reply #1 on: May 21, 2013, 12:58:40 AM »
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(whatever that means)
There's your problem. Without knowing what that means it's difficult to interpret what they're understanding from the numbers.

Funny how there's all those upward trending graphs of subscription revenues, but no graphs of perpetual licence revenue falling off the cliff and if that will result in any lost revenue.
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Schewe
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« Reply #2 on: May 21, 2013, 01:11:57 AM »
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Funny how there's all those upward trending graphs of subscription revenues, but no graphs of perpetual licence revenue falling off the cliff and if that will result in any lost revenue.

Well, check out slide 30...admittedly projections,  but Adobe is expecting perpetual licensing review to fall off to little by 2015 and almost nothing by 2016 but be above 2012 by 2016...

Look, I'm not trying to spin anything with this post...I'm just trying to add info to the conversation. Care to add anything useful?
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Morris Taub
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« Reply #3 on: May 21, 2013, 02:00:02 AM »
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Jeff, thanks for the slide show link, but...

wait, wait, wait a minute...we can make charts about projections, guesstimates, and wishes to say and hope for anything we want...doesn't make them true, or even slightly accurate. The only charts that can be accurate are charts of the past. Right? And even then it depends who is giving the info and checking to see that the info is true. Also, if Adobe kills the perpetual license models, what else can one expect besides no income from them? It's their wish, hope, and who can blame them for making charts to show this. All they have to do is make Lightroom and Elements subscription only and there you go, no income at all from the old, 'loved' way of doing business.

Ok, 'loved' my projection of the past. I'm allowed to dream, no? fond memories, all that, as I slowly ponder what to use when my copy of CS6 and Lightroom no longer work with my computer. See. I'm part of the decreasing perpetual license revenue.
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Mark D Segal
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« Reply #4 on: May 21, 2013, 07:04:50 AM »
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Hi Jeff,

Thanks for posting that. It's a useful exposition of their strategy and most importantly demonstrates the depth of their commitment to the new business model. They have clearly put a tremendous amount of intellectual and managerial capital into this. As for the projections - no one should waste too much time over them. As someone who has been in the thickets of forecasts and projections for over four decades, my advice on that aspect is that the most important slide there is the Financial Disclaimer about "forward looking statements" on the first page.
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Mark D Segal (formerly MarkDS)
Author: "Scanning Workflows with SilverFast 8....." http://www.luminous-landscape.com/reviews/film/scanning_workflows_with_silverfast_8.shtml
Alan Goldhammer
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« Reply #5 on: May 21, 2013, 07:29:06 AM »
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As someone who has been in the thickets of forecasts and projections for over four decades, my advice on that aspect is that the most important slide there is the Financial Disclaimer about "forward looking statements" on the first page.
To add to what Mark notes, Adobe has an obligation to the investment community as well (they do have a fiduciary responsibility to shareholders afterall).  Whether these projections hold up will await the test of time and it will be useful to benchmark Adobe's progress in meeting their goals.  from an investor's perspective, Adobe's move to the CC makes sense.  We'll see what happens.
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Mark D Segal
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« Reply #6 on: May 21, 2013, 07:37:38 AM »
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Alan, in the grander scheme of things, at least over the medium term and notwithstanding the thousands of customers who are pissed with them, I think you're right. They'll most likely make more money.
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Mark D Segal (formerly MarkDS)
Author: "Scanning Workflows with SilverFast 8....." http://www.luminous-landscape.com/reviews/film/scanning_workflows_with_silverfast_8.shtml
Rand47
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« Reply #7 on: May 21, 2013, 08:44:18 AM »
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I am, apparently, a very small cog in Adobe's enormous wheel. Or, perhaps a better analogy, a mutant gene in Adobe's genome that, as it turns out, doesn't contribute to its survival likelihood. :-) 

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BernardLanguillier
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« Reply #8 on: May 21, 2013, 10:55:34 AM »
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Alan, in the grander scheme of things, at least over the medium term and notwithstanding the thousands of customers who are pissed with them

Future will tell, but I would not under estimate the power of influence of these tens of thousands of unhappy [former] customers.

Once you generate such a dynamic, your start to draw people to other platforms that start to improve faster, students in particular and end up having talented young people not taking jobs because of Adobe tools being used instead of other tools they know better... those same talented guys start to create brilliant stuff with other tools and promote their work successfully.

It can spiral out of control in a pretty short amount of time.

Cheers,
Bernard
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Slobodan Blagojevic
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« Reply #9 on: May 21, 2013, 10:59:23 AM »
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Speaking of analogies... "Survival of the fittest" comes to mind (for users, not Adobe).

We hate change. We resist it. We crave stability. And yet the only constant thing is change.

Adobe introduced the change. We can adapt to it or...become irrelevant. It is not the strongest or loudest (objectors) who will survive, but those able to adapt.
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Mark D Segal
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« Reply #10 on: May 21, 2013, 12:14:25 PM »
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It can spiral out of control in a pretty short amount of time.

Cheers,
Bernard


I'd be surprised. But yes, time will tell.
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Mark D Segal (formerly MarkDS)
Author: "Scanning Workflows with SilverFast 8....." http://www.luminous-landscape.com/reviews/film/scanning_workflows_with_silverfast_8.shtml
kirkt
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« Reply #11 on: May 21, 2013, 12:15:41 PM »
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Aside from all of the managerial Powerpoint-like heebie jeebies that that presentation gives me, the financial projection for the "Creative Product Family Revenue Model" (last slide) seems to indicate that the revenue for the Creative Family of products under the new subscription paradigm will not increase significantly, compared to 2012, over the next 3 to 3.5 years.  That is, it appears that the revenue will be more or less flat but shifted from the perpetual revenue to the subscription revenue.

The presentation does not detail whether these revenue estimates are based on the number of projected subscribers at some pre-determined net cost per subscriber, or some floating projected cost for an increasing or decreasing subscriber base - i.e., something that would indicate Adobe's projection of the effect of their decision on the current (2012) user-base.

Fascinating.  I wonder how much time was spent coming up with all of the cute icons.  Edward Tufte must be rolling his eyes.

kirk
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Mark D Segal
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« Reply #12 on: May 21, 2013, 12:19:11 PM »
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 That is, it appears that the revenue will be more or less flat but shifted from the perpetual revenue to the subscription revenue.

kirk

In its 2012 10-K submission to the SEC Adobe actually cited medium-term revenue decline through the transition as a risk, because the pattern of revenue flow will change from being front-end lumpy to more gradual over time. They are obviously engaging a longer-term strategy.
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Mark D Segal (formerly MarkDS)
Author: "Scanning Workflows with SilverFast 8....." http://www.luminous-landscape.com/reviews/film/scanning_workflows_with_silverfast_8.shtml
kirkt
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« Reply #13 on: May 21, 2013, 12:25:46 PM »
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That's what the highly uninformative bar graph at the end of the presentation also appears to demonstrate.  Again, I'd be curious to know where the inevitable (?) growth will come from in this model.  More users or more cost to users?  Or both?  It would be interesting to see Adobe's projection of what the "user" will look like once the projected increase starts to occur.

kirk
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Mark D Segal
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« Reply #14 on: May 21, 2013, 12:28:21 PM »
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I'd think both. They are probably counting on the vast majority of the client base to throw-in the towel and subscribe, plus normal year-to-year client base growth.
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Mark D Segal (formerly MarkDS)
Author: "Scanning Workflows with SilverFast 8....." http://www.luminous-landscape.com/reviews/film/scanning_workflows_with_silverfast_8.shtml
jrp
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« Reply #15 on: May 21, 2013, 12:58:33 PM »
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http://bythom.com is Thom Hogan's analysis of the slides.
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ButchM
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« Reply #16 on: May 21, 2013, 02:52:10 PM »
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We can adapt to it or...become irrelevant.

I'm going to expend whatever effort is necessary to "adapt" by using my current perpetual licensed versions of Adobe software until they they are no longer functional or useful, then adopt whatever the best competing options that are available at the time ... my financial contributions that would have gone to Adobe, will become entirely "irrelevant" to their bottom line as those funds will be invested elsewhere.
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tho_mas
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« Reply #17 on: May 21, 2013, 03:10:22 PM »
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We hate change.
I do not.

Quote
Adobe introduced the change. We can adapt to it or...become irrelevant. It is not the strongest or loudest (objectors) who will survive, but those able to adapt.
now, this is one of the most bluntly positive reinforcements of capitalism I've ever read on a "free" forum.
Congratulations... we came to the point where we confuse cynicism with necessities.
Powerlessness and insight are really NOT the same.
Damn...

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MHMG
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« Reply #18 on: May 21, 2013, 04:05:30 PM »
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A very informative slide presentation. My humble assessment: Adobe figures by upping the price tag for CC to it's pro subscriber base compared to previous existing perpetual license upgrade pricing, its "creative and pro" base of users will more than compensate for the considerable fallout likely (perhaps already) coming from the 10% home user and 25% education base. Of those two groups, the 25% education component may be the long term achilles heel of Adobe's new business model. Corporate "goodwill" is hard for bean counters to quantify, but it has a real tangible value nonetheless. If colleges and universities quit teaching PS, Indesign, etc., and opt to present courses based on less costly and more "open source" alternatives, it will breed a whole new generation of professionals that simply have no loyalty to Adobe's pro software offerings. Moreover, it will now spark more independent software development to fill the pricing vacuum. So, short term planning by Adobe accountants suggests a net positive coming in 2016, but longer term, the prospects may be worse. Did Adobe hire a bunch of former Kodak Execs or something? The history of corporate management blunders paints a harsh picture.

If I'd had a say in the Adobe boardroom, I'd have pressed for a continuation of both perpetual "standalone" versions as well as an always up to date subscription plan. Even the stodgy old auto industry gets this. You can buy or lease, whatever works better for you.  I truly doubt the software programming overhead to support both software purchasing models is all that daunting.

best,
Mark
http://www.aardenburg-imaging.com
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BernardLanguillier
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« Reply #19 on: May 21, 2013, 04:49:29 PM »
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Speaking of analogies... "Survival of the fittest" comes to mind (for users, not Adobe).

We hate change. We resist it. We crave stability. And yet the only constant thing is change.

Adobe introduced the change. We can adapt to it or...become irrelevant. It is not the strongest or loudest (objectors) who will survive, but those able to adapt.

That's one way to look at the situation.

Another way to look at the situation is to consider the relevance Adobe as a critical path solution provider.

As Thom as highlghted in his analysis of the recent Adobe presentation, the current decision highlights the fact that Adobe has taken a conscious decision to alienate/get rid of 50% of their user base in favor of a possible business uplift.

We somehow feel that corporate customers will not be affected significantly by this decision or will like it. The real question I would have as a corporate user of Adobe is what other decision they will take next down the road that may alienate 50% of corporate users 5 years down the road if someone at Adobe decides that it will again favor their business a few years later. Think price increase, think solutions that are a bit more complex/costly to maintain,...

Do you want to maintain such a company on the critical path of what you do?

Cheers,
Bernard
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