# Adobe Reports Record Revenue



## Canon Rumors Guy (Mar 18, 2016)

```
<em>Strong Cloud Product Adoption in Q1 FY2016 Fuels 25 Percent Year-over-year Revenue Growth</em></p>
<p><b>SAN JOSE, Calif. — Mar. 17, 2016</b> <b>—</b> Adobe (Nasdaq:ADBE) today reported financial results for its first quarter fiscal year 2016 ended Mar. 4, 2016.</p>
<p><b>First Quarter Financial Highlights</b></p>
<ul>
<li>Adobe achieved record quarterly revenue of $1.38 billion, representing year-over-year growth of 25 percent.</li>
<li>Diluted earnings per share were $0.50 on a GAAP-basis, and $0.66 on a non-GAAP basis.</li>
<li>Digital Media segment revenue grew by 33 percent year-over-year to a record $932 million, with Creative revenue growing 44 percent year-over-year to a record $733 million.</li>
<li>Strong Creative Cloud adoption drove Digital Media Annualized Recurring Revenue (“ARR”) to $3.13 billion exiting the quarter, an increase of $246 million.</li>
<li>Adobe Marketing Cloud achieved strong bookings growth, and record revenue of $377 million that represents year-over-year growth of 21 percent.</li>
<li>Year-over-year operating income grew 78 percent and net income grew 200 percent on a GAAP-basis; operating income and net income both grew 48 percent on a non-GAAP basis.</li>
<li>Cash flow from operations was $498 million, and deferred revenue grew to $1.61 billion.</li>
<li>The company repurchased approximately 1.5 million shares during the quarter, returning $133 million of cash to stockholders.</li>
</ul>
<p>A reconciliation between GAAP and non-GAAP results is provided at the end of this press release and on Adobe’s website.</p>
<p><!--more--></p>
<p><b>Executive Quotes</b></p>
<p>“Every day, more brands, government agencies and educational institutions globally are choosing to base their digital strategies on Adobe’s content and data platforms,” said Shantanu Narayen, Adobe president and chief executive officer. “Our exceptional performance in Q1 is an indicator of the strong momentum we are seeing across our cloud businesses as we drive the experience economy.”</p>
<p>“We are pleased to report another record quarter with 25 percent year-over-year revenue growth. Strong Cloud adoption drove record Creative and Marketing Cloud revenue in Q1, and better-than-expected Digital Media ARR,” said Mark Garrett, Adobe executive vice president and chief financial officer. “Based on our strong Q1 results and business momentum, we are increasing our annual revenue and earnings targets for the year.”<b>

</b></p>
<p><b>Adobe to Webcast Earnings Conference Call</b></p>
<p>Adobe will webcast its first quarter fiscal year 2016 earnings conference call today at 2:00 p.m. Pacific Time from its investor relations website: <a href="http://www.adobe.com/ADBE">www.adobe.com/ADBE</a>. Earnings documents, including Adobe management’s prepared conference call remarks with slides, financial targets and an investor datasheet are posted to Adobe’s investor relations website in advance of the conference call for reference. A reconciliation between GAAP and non-GAAP earnings results and financial targets is also provided on the website.</p>
<p><b>Forward-Looking Statements Disclosure</b></p>
<p>This press release contains forward-looking statements, including those related to product adoption and innovation, momentum in our cloud businesses, revenue, profit, annualized recurring revenue, bookings, earnings per share and operating cash flow, all of which involve risks and uncertainties that could cause actual results to differ materially. Factors that might cause or contribute to such differences include, but are not limited to: failure to develop, market and offer products and services that meet customer requirements, introduction of new products, services and business models by competitors, failure to successfully manage transitions to new business models and markets, risks associated with the timing of revenue recognition, uncertainty in economic conditions and the financial markets, risks associated with an increased emphasis on a cloud strategy, fluctuations in subscription renewal rates, risks associated with cyber-attacks and information security, potential interruptions or delays in hosted services provided by us or third parties, and failure to realize the anticipated benefits of past or future acquisitions. For a discussion of these and other risks and uncertainties, please refer to Adobe’s Annual Report on Form 10-K for our fiscal year 2015 ended Nov. 27, 2015, and Adobe’s Quarterly Reports on Form 10-Q issued in fiscal year 2016.</p>
<p>The financial information set forth in this press release reflects estimates based on information available at this time.  These amounts could differ from actual reported amounts stated in Adobe’s Quarterly Report on Form 10-Q for our quarter ended Mar. 4, 2016, which Adobe expects to file in Mar. 2016.</p>
<p>Adobe assumes no obligation to, and does not currently intend to, update these forward-looking statements.</p>
<p><b>About Adobe Systems Incorporated</b></p>
<p>Adobe is changing the world through digital experiences. For more information, visit<a href="http://www.adobe.com/">www.adobe.com</a>.</p>
<span id="pty_trigger"></span>
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## JennyGW (Mar 18, 2016)

Mostly love the software, hate the company.


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## neuroanatomist (Mar 18, 2016)

Thinking back about those on CR who complained about the subscription model then predicted doom for Adobe because of it. The former is fine (hey, I'm sticking with CS6), the latter is an illogical leap to an erroneous conclusion. Just like Canon is ******* because they're not investing heavily in MILCs. :


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## J.R. (Mar 18, 2016)

The CC model has attracted a lot of people to take the subscription who were earlier using pirated software. This is an incremental user base for Adobe who were not providing any revenue. 

Personally, I've subscribed to the complete CC plan (its approximately $ 40 per month where I live). A pittance compared to what a CS7 would be priced at.


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## JonAustin (Mar 18, 2016)

Yep, Adobe figured out that you can raise more total revenue by charging everybody a little bit, instead of socking high prices to a smaller customer base.

Maybe they should go have a chat with the folks in Congress who write tax law.


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## LDS (Mar 18, 2016)

J.R. said:


> The CC model has attracted a lot of people to take the subscription who were earlier using pirated software. This is an incremental user base for Adobe who were not providing any revenue.



AFAIK, CC is still pirated. But it is true there are also those who moved to the subscription because of the lower entry price. It is also true Adobe cashed earlier what would have been upgrades later. One of the main reasons of the subscription model is to smooth cash flows over time, while reducing the risks of people not upgrading to new releases. It would be interesting to compare the actual situation to what happened when Adobe actually released new products releases.

Anyway, as long as Adobe has no real contenders in the pro markets, its model will work and bring money regardless of the customers like it or not. If ever truly viable alternatives emerge, the road could become bumpier.


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## privatebydesign (Mar 18, 2016)

LDS said:


> J.R. said:
> 
> 
> > The CC model has attracted a lot of people to take the subscription who were earlier using pirated software. This is an incremental user base for Adobe who were not providing any revenue.
> ...



If truly viable alternatives do come out then to compete head to head they will need a similar business model. Don't forget the vast majority of Adobe's income is from businesses, a fact we little single users are prone to forget, from a business perspective buying software makes no sense whereas leasing it does.

I can see somebody else making a 'photographers' app, but from a value point of view $7.99 a month is so darn cheap it is not an enticing arena to compete in.


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## clicstudio (Mar 18, 2016)

Of course. Years of pirated photoshop doesn't help the company. 
Now the subscription is so cheap, it's worth it.


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## 3kramd5 (Mar 18, 2016)

JonAustin said:


> Yep, Adobe figured out that you can raise more total revenue by charging everybody a little bit, instead of socking high prices to a smaller customer base.
> 
> Maybe they should go have a chat with the folks in Congress who write tax law.



haha zing!


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## Famateur (Mar 18, 2016)

3kramd5 said:


> JonAustin said:
> 
> 
> > Yep, Adobe figured out that you can raise more total revenue by charging everybody a little bit, instead of socking high prices to a smaller customer base.
> ...



I suspect Art Laffer would agree!


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## J.R. (Mar 18, 2016)

LDS said:


> J.R. said:
> 
> 
> > The CC model has attracted a lot of people to take the subscription who were earlier using pirated software. This is an incremental user base for Adobe who were not providing any revenue.
> ...



While the CC may well be pirated, the reason for a lot of people to resort to piracy has gone down. The CS6 pricing was insanely high for users in a number of countries - especially in Asia. There were a very large number of users who simply couldn't afford it but needed it to stay in business, resulting in piracy. 

The CC model may well eat up the same amount of money in the long run but it is very affordable on a month to month basis. Why would one steal if something was easily affordable and not burning a hole in the pocket?

That said, there will always be people who won't pay a dime and think of software companies to be 'suckers' who can be cheated easily to distribute their software for free. Unfortunately, that's the way the world is today.


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## ashmadux (Mar 18, 2016)

OH GREAT.

Guess that means Lightroom standalone is finished. As long as I dont get a 5d4, im stay safely in the land of cs + LR 5.

I gotta get this capture one up and running.


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## jrista (Mar 18, 2016)

ashmadux said:


> OH GREAT.
> 
> Guess that means Lightroom standalone is finished. As long as I dont get a 5d4, im stay safely in the land of cs + LR 5.
> 
> I gotta get this capture one up and running.



Wow. It's really not that bad. Adobe caters to photographers more than any one else by a LONG shot. They offer a PSCC and LRCC package deal (which also includes access to a bunch of their online content libraries as well as online cloud storage) for a mere $9.99/mo.

What exactly are you complaining about?


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## JonAustin (Mar 18, 2016)

jrista said:


> ashmadux said:
> 
> 
> > OH GREAT.
> ...



Not complaining, but I'm with *ashmadux*. Give me the perpetual license any day. Better yet, continue to give me a choice. Choice is good.


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## zim (Mar 18, 2016)

ashmadux said:


> OH GREAT.
> 
> Guess that means Lightroom standalone is finished. As long as I dont get a 5d4, im stay safely in the land of cs + LR 5.
> 
> I gotta get this capture one up and running.



I took my Christmas holidays out to learn it, do yourself a favour get it up and running it's very very good, not learner friendly, user friendly that is a good thing.


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## jrista (Mar 18, 2016)

JonAustin said:


> jrista said:
> 
> 
> > ashmadux said:
> ...



Yes. And zero choices at all is bad. Adobe was beginning to flounder before CC. They spent massive amounts of money producing big new releases every year, which half of their customers would skip before upgrading. They had cash flow problems. If they hadn't gone to a subscription model, you wouldn't be choosing between perpetual license or subscription...you would simply be stuck with nothing. This is the same reason most larger software companies are moving to subscription services. Microsoft, who was also floundering only a couple years ago, used to make their money on Windows and Office. Today, they are basically giving Windows away for free, office for a steal with the subscription price, and they are making their money off of the cloud subscriptions.


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## Mt Spokane Photography (Mar 18, 2016)

J.R. said:


> While the CC may well be pirated, the reason for a lot of people to resort to piracy has gone down. The CS6 pricing was insanely high for users in a number of countries - especially in Asia. There were a very large number of users who simply couldn't afford it but needed it to stay in business, resulting in piracy.



Since CC is not available in China, which is potentially a gigantic market, I do not get the logic of people thinking that big numbers of those in Asia are suddenly buying CC subscriptions.


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## Orangutan (Mar 19, 2016)

jrista said:


> Wow. It's really not that bad. Adobe caters to photographers more than any one else by a LONG shot. They offer a PSCC and LRCC package deal (which also includes access to a bunch of their online content libraries as well as online cloud storage) for a mere $9.99/mo.
> 
> *What exactly are you complaining about?*



I've mentioned it before, but money is a minor part of the consideration. Sure, I'd like the option to go 4-6 years between purchases if there's nothing compelling in newer releases, but the real motivation for me to want perpetual licensing is the control: I want a simple transaction. For example, if I buy myself a painting I simply hand over the money, take possession of the object and hang it on my wall. I don't have to have an ongoing relationship with the seller. I also don't want an ongoing relationship with Adobe after I buy a license (except to download bug fixes, which they owe me for releasing a defective product). I don't want to manage a subscription, I just want to buy and be done.


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## privatebydesign (Mar 19, 2016)

Orangutan said:


> jrista said:
> 
> 
> > Wow. It's really not that bad. Adobe caters to photographers more than any one else by a LONG shot. They offer a PSCC and LRCC package deal (which also includes access to a bunch of their online content libraries as well as online cloud storage) for a mere $9.99/mo.
> ...



That, as ever, is an over simplification.

First, your software won't run on your hardware for ever.

Second, if you buy a painting you do have an ongoing relationship with the artist, you own the painting but they own the copyright, it isn't 'your' painting to do what you like with.


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## Orangutan (Mar 19, 2016)

jrista said:


> Yes. And zero choices at all is bad. Adobe was beginning to flounder before CC. They spent massive amounts of money producing big new releases every year, which half of their customers would skip before upgrading. They had cash flow problems. If they hadn't gone to a subscription model, you wouldn't be choosing between perpetual license or subscription...you would simply be stuck with nothing.


Must disagree here: if they were beginning to flounder it was their own fault for mismanaged development. We have some strong hints of that from the number and severity of the bugs found in Adobe products, and also from the failed "improvements" that had to be walked-back. Although they have some good features, they have bloated, badly-engineered software. It's funny how other companies have been able to start from scratch and make near competitors to Photoshop and Lightroom for the same cost or less. If they hadn't gone to a subscription model they may have had to sell themselves off to another company, who would pull out the good code, integrate it into a lean efficient product, which I could purchase for less money. The best thing for customers of Adobe would be to get rid of the management structure and implement a sound development environment.



> Microsoft, who was also floundering only a couple years ago, used to make their money on Windows and Office. Today, they are basically giving Windows away for free, office for a steal with the subscription price, and *they are making their money off of the cloud subscriptions*.


Somewhat. If this were entirely true there would be a quick, easy, comprehensive opt-out (better yet, opt-in) for *all *data collection. Instead, they make opt-out difficult. I'm not the first to suspect that they really hope to make money by harvesting data to feed their search business.


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## Orangutan (Mar 19, 2016)

privatebydesign said:


> Orangutan said:
> 
> 
> > jrista said:
> ...


All analogies, as ever, are; those posted on blogs doubly-so.



> First, your software won't run on your hardware for ever.


And...? ? ? ?
Well, of course not, but it's my choice if/when to upgrade both of them. The general point still stands: I'd rather pay a lump of money for a license every few years and have no relationship with the vendor between times.


> Second, if you buy a painting you do have an ongoing relationship with the artist, you own the painting but they own the copyright, it isn't 'your' painting to do what you like with.


Likewise, I never said I had the right to copy Photoshop and resell it. If I buy a painting I don't have to send monthly rental checks to the artist, and I don't want to send monthly rental checks to Adobe. (1)buy;(2)install;(3)use, with no ongoing relationship.


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## J.R. (Mar 19, 2016)

Mt Spokane Photography said:


> J.R. said:
> 
> 
> > While the CC may well be pirated, the reason for a lot of people to resort to piracy has gone down. The CS6 pricing was insanely high for users in a number of countries - especially in Asia. There were a very large number of users who simply couldn't afford it but needed it to stay in business, resulting in piracy.
> ...



As long as you think China is the only country in Asia, your comment is spot on. 

However, Adobe's global CTO says - 

"Asia-Pacific is one of our fastest growth regions since the economies are growing, the workforce and the demographics are extremely young and they are adopting these solutions and technologies at a rate that is way faster than North America and Europe. India market in particular (and China is very similar to that), is not only a very interesting market for sheer revenue growth but are also becoming leading indicators of where our business is going." 

http://articles.economictimes.indiatimes.com/2016-03-10/news/71382476_1_india-and-china-adobe-strategic-market

US and China may be the world's biggest markets, but for multinationals, there are customer bases they tap in other parts of the world as well  

Anyhow, just to expand on my point further, the CS6 suite is still available in India for a price of INR 191,646 while the CC suite is available for INR 2,700 per month. In a country such as India, there would be a minuscule % of the entire userbase who would buy the standalone version. Paying INR 2,700 a month, not a problem at all. 

Personally, I've seen hawkers sitting by the roadside and on the pavements in New Delhi selling pirated CS suite CDs for INR 100. With the CC subscriptions prices being where they are (with photography package being the most used being offered for INR 499 a month), more and more people are now willing to fork money over to Adobe. 

From a user base which was negligible in the first place, you are going to get a lot of growth in such markets - and I don't think India is the only country relevant for this discussion. 

BTW, the currency exchange rates are 1 USD = INR 67 (approx)


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## Mancubus (Mar 19, 2016)

I wish they would use some of this money as investment to optimize Lightroom performance for powerful computers.

Recently I've bough basically the highest end consumer hardware (6700k overclocked to 4.7ghz, 980ti, fast ram, pci-e SSD...can't be much better than that) and Lightroom still performs barely better than in my previous 4-year old computer.

Despite the latest feature of LR claiming to increase performance by using the GPU (video card) and my 980ti (highest end), turning that option on will only make LR slower, so I leave it off.

It still takes a couple seconds to load an image, when using too many adjustments it is sluggish to drag and pan, exporting the files take a bit too long....and I'm using a 22mp camera. Must be a nightmare with a 5ds.


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## JennyGW (Mar 19, 2016)

I bought CS6 Photoshop just before CC became available. All I need is Photoshop and I may have paid a chunk for it, but at least I paid one figure and I won't be paying forever. The last version of Photoshop I had was many versions old and I expect the version I have will be many generations old before I feel any need to upgrade.

Roughly, in two years my investment will have paid for itself and CC users will still be paying. Say I keep my version for 5 years, that's 3 years of savings on a CC plan.

I had a problem with CS6 Photoshop while abroad and I had no access to an internet connection. They've since changed it so this can't happen, but it warned me of the dangers of using software that it Internet connection dependent.

As for Adobe looking after it's customers, bleh! I was a Coldfusion developer for many years and used Dreamweaver. Coldfusion support in Dreamweaver has been dropped, perhaps one of the stupidest decisions I've seen from any software manufacturer. Much like the upgrades for Photoshop, the upgrades for Coldfusion were of no use to me because Adobe never listened to what developers were actually crying out for.

I don't host any data on the Cloud apart from my website, and I hate that that isn't sitting on my own server, because I don't trust companies not to make their own use of it.

Adobe currently have a stranglehold on the market, but more and more companies are set to become competition. Open Source Gimp, and Phase One's Capture One Pro are already look very good and I'm sure by the time I'm ready to upgrade that they will be viable options. I'm sure I'm not the only one looking to escape the Adobe leash.


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## Mt Spokane Photography (Mar 19, 2016)

I've bought two of the 1 year subscriptions when B&H had them on a special 1 day deal, so I'm paid up thru 2017 or maybe 2018.

I've seen other special low cost offers as well where thousands of subscriptions were sold in a day. This is boosting their income, but, ofcourse, we will not need to pay them for two years now. 

Having prepaid Photoshop and Lightroom for two years for around $150-$160 is less than the price of me purchasing upgrades for both every other year.

Like others, I feel more secure having a perpetual license, but I'd stick with saving 50% since I have upgraded every 2 years or less. I have a stack of old versions of photoshop, almost every one since 1997 or 1998. I've only missed 2 or three versions. I have Lightroom 2, 3, 4, and 5 as well.


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## greger (Mar 19, 2016)

Adobe's website was hacked a year or two ago gaining access to customer credit card information. I'm sure Adobe upgraded security to stop this from happening in the future. I prefer to buy my upgrades at a Store not a monthly fee on my credit card. I bought Elements 14 and will buy Lightroom next version.


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## Mt Spokane Photography (Mar 19, 2016)

JennyGW said:


> I bought CS6 Photoshop just before CC became available. All I need is Photoshop and I may have paid a chunk for it, but at least I paid one figure and I won't be paying forever. The last version of Photoshop I had was many versions old and I expect the version I have will be many generations old before I feel any need to upgrade.
> 
> Roughly, in two years my investment will have paid for itself and CC users will still be paying. Say I keep my version for 5 years, that's 3 years of savings on a CC plan.




Your math might need touching up.

Photoshop CS6 cost was ~$550, The Photo plan costs $120 a year unless you buy a prepaid card for $79 - $99 whem they happen to be on sale.

It will take you 4.5 to 8 years just to break even, and thats not adding in the cost of your money.


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## jrista (Mar 20, 2016)

Orangutan said:


> jrista said:
> 
> 
> > Yes. And zero choices at all is bad. Adobe was beginning to flounder before CC. They spent massive amounts of money producing big new releases every year, which half of their customers would skip before upgrading. They had cash flow problems. If they hadn't gone to a subscription model, you wouldn't be choosing between perpetual license or subscription...you would simply be stuck with nothing.
> ...



As someone who has been writing software my entire life, this is excessively naive. When you have a long term well established product used by millions, that tiny little thing called "backwards compatibility" rears it's ugly head and throttles your software developers with immense hurdles to continuing to progress the software. Again, same issue Microsoft faces, the same reason they failed to create an entirely new platform (and one that could have blown the crap out of everything else on the market) when they were building Windows Longhorn. Longhorn was phenomenal based on my use of the leaked alphas, I was very excided about WinFS...then the whole thing was scrapped. They backtracked heavily, returned to their original code base, and...created Vista. Why? Because Longhorn alienated their entire userebase. 

Adobe products, considering how many people use them and how much older features used by people who have been using the software as long as I have are critical to maintaining their user base, are surprisingly stable. I have not had a single crash in any of the Adobe applications I use since moving to CC. I'd had a small number before that, but not a single one since. Photoshop is PACKED with functionality...something you call "bloat"...something I call rich and capable...and it never skips a beat. I sometimes load massive astrophotography mosaics into it, saved as 32-bit float data and covering around 200mp (and in one case, even more than that). Never skips a beat.

As a software engineer myself, and someone who has programmed since the age of 8...that is a phenomenal piece of software. 

Your post is incredibly naive.


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## Orangutan (Mar 20, 2016)

jrista said:


> As someone who has been writing software my entire life, this is excessively naive. When you have a long term well established product used by millions, that tiny little thing called "backwards compatibility" rears it's ugly head and throttles your software developers with immense hurdles to continuing to progress the software. Again, same issue Microsoft faces, the same reason they failed to create an entirely new platform (and one that could have blown the crap out of everything else on the market) when they were building Windows Longhorn. Longhorn was phenomenal based on my use of the leaked alphas, I was very excided about WinFS...then the whole thing was scrapped. They backtracked heavily, returned to their original code base, and...created Vista. Why? Because Longhorn alienated their entire userebase.
> 
> Adobe products, considering how many people use them and how much older features used by people who have been using the software as long as I have are critical to maintaining their user base, are surprisingly stable. I have not had a single crash in any of the Adobe applications I use since moving to CC. I'd had a small number before that, but not a single one since. Photoshop is PACKED with functionality...something you call "bloat"...something I call rich and capable...and it never skips a beat. I sometimes load massive astrophotography mosaics into it, saved as 32-bit float data and covering around 200mp (and in one case, even more than that). Never skips a beat.
> 
> ...



I believe you've misunderstood my post, or else I didn't write clearly. First, I've been programming since I was 15, and have programmed in a variety of languages both on my own and in groups. I've also been a sysadmin, and done a number of other IS-related jobs. One thing my post was not is naive. I'll address certain points:

>"backwards compatibility"
There are two major types of backward compatibility for products like Adobe's suite: file-format compatibility and UI compatibility. For example, the recent Lightroom import-screen fiasco shows clearly that Adobe does not fully respect UI compatibility. Regarding file format, an end-user application isn't very susceptible to file format issues, but changes are still sometimes needed; e.g. when PS brought in smart objects a file format change was required. Even between PS6 and CC there are incompatibilities. If file-format compatibility is holding back Adobe, they're not showing it. Also, there are a number of apps that can read (or partially read) Adobe format files. This demonstrates that there is nothing magical about file format. (As a side note, Microsoft's move to an XML format for its Office suite was done to improve file integrity on read/save; this can be seen as a feature-driven format change.)

Windows is not an apt analogy because an OS-level change entails a MUCH larger compatibility concern: code libraries. There was a huge code base out there for Windows libraries, and abandoning that would have put users and developers in turmoil, so they opted for incremental changes (e.g. .NET). If I recall correctly, WinFS was based on SQLServer features, and was killed because of poor performance, rather than backward compatibility issues.

>I have not had a single crash in any of the Adobe applications I use since moving to CC
I don't believe I said it crashed frequently.

>Photoshop is PACKED with functionality...something you call "bloat"...something I call rich and capable...
It's not the feature set I called bloated, it's the code. Adobe CC code is HUGE and slow relative to the feature set. If memory serves, a few years ago they even paused development to do a code audit to remove code bloat. Yes, there are many good features in Adobe products, most of which I don't need. I'm not asking for them to be removed on my account, I just wish the whole thing was more efficient.

>I sometimes load massive astrophotography mosaics into it, saved as 32-bit float data
> and covering around 200mp (and in one case, even more than that). Never skips a beat.
That's great, I'm glad it works for you, but do you have reason to believe that no competitor could do that? Have you tried? 

Going back to my original point (and I'll try to be more clear): In a market-driven economy, a company that fails to deliver what customers want at a price they're willing to pay will fail. Some on this forum (I don't recall if you were one such) have made that point in regards to Canon, speculating that feature advances were a financial necessity. In my opinion, Adobe has used its market dominance (i.e. near-monopoly) to impose a subscription model. Were it really such a bargain for customers, they could have offered it as an option, and expected flocks of customers to jump at the chance. Had they not been able to enforce the software rental model they might have been forced to make more profound changes. I dispute the notion that the products would have died, but a reorg or IP sale would have been needed.

I do not begrudge anyone the ability to choose a subscription model if it works for their needs and finances. My complaint is that I would be forced to accept it if I want to upgrade from PS6.

My question to you: how would Adobe have been hurt by offering subscription as an option rather than requirement? More pointedly, if it's such a good deal, wouldn't customers have made that choice? By the way, if you want me to accept the argument that it would be excessively burdensome to offer both models you'll need to offer a very persuasive explanation.


Cheers.

O


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## RGF (Mar 20, 2016)

greger said:


> Adobe's website was hacked a year or two ago gaining access to customer credit card information. I'm sure Adobe upgraded security to stop this from happening in the future. I prefer to buy my upgrades at a Store not a monthly fee on my credit card. I bought Elements 14 and will buy Lightroom next version.



Agreed. Or at least buy a year subscription from Adobe and they don't store my credit card number.

Also would like to have a "family" plan where I can add a 3rd or 4th device for a $4 for the 3rd, $3 for the 4th, 5th, ..

Perhaps a limit of 4 advices to keep companies from getting unlimited seats on the cheap - though I suspect that Adobe offers companies great prices we mere mortals will never see.


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## Diko (Mar 20, 2016)

neuroanatomist said:


> Thinking back about those on CR who complained about the subscription model then predicted doom for Adobe because of it. The former is fine (hey, I'm sticking with CS6), the latter is an illogical leap to an erroneous conclusion. Just like Canon is ******* because they're not investing heavily in MILCs. :



*+1* _for _*Creative Cloud* and *MILC*s

I can only add that currently I am testing (and probably) constantly migrating my workflow to *Capture One*. *PS* _FTW_, but *LR* is tremendously heavy and slow, and inadequately, lacking custom keyboard shortcuts option. 

Will check back if *LR 7*, *8* or *9* will change that or a huge no-where-else-to-find game changer feature is presented. In any other case will stick with *PS *and *Capture One*, I presume, for quite long time.


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## LDS (Mar 20, 2016)

privatebydesign said:


> the vast majority of Adobe's income is from businesses, a fact we little single users are prone to forget, from a business perspective buying software makes no sense whereas leasing it does.



You may be surprised, but actually that is what was happening in the pre-PC era. Most Unix software than used on Unix workstations for pro tasks, was rented, never sold. PCs became so popular exactly because they allowed many professionals to escape from the heavy yearly fees those software companies were able to enforce.

While if the prices is right leasing your main tool(s) may work, it becomes a burden when it happens for your secondary tools, those you need to use sometimes, and upgrade once in a while only when really needed. You may find yourself entrapped into a subscription, and if for any reason you have to cut some expenses because your business is in a bad situation, if the software stops working, you'll find yourself with a useless software brick, another issue in what could be already a complex situation to manage.


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## LDS (Mar 20, 2016)

clicstudio said:


> Of course. Years of pirated photoshop doesn't help the company.
> Now the subscription is so cheap, it's worth it.



I guess it helped a lot to counter professional underlicensing, more than true piracy. Now that you need a software that controls use on each machine running it, it's a bit more difficult to install the same copy on multiple machines, while trying to look "legal" buy buying fewer copies than needed.


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## j-nord (Mar 21, 2016)

Great, hopefully Adobe starts investing in some LR development... Im not switching to CC until they do.


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## martti (Mar 21, 2016)

Once upon a time I said in the Adobe discussions that there is something that makes me think about the Indian Subcontinent. Guess what: Their CEO, nominated in 2007 comes from Hyderabad!
A chap whose CV has Apple and Silicon Graphics and President Obama's Management Advisory board in it.


Money, very good!


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## drs (Mar 21, 2016)

Besides the idea that pirate pays now (?) the main revenue come from people who paid of course. More money to Adobe, means "we" pay more now. I have skipped often version, e.g. Illustrator, and saved money. It just was not worth it, or even counter producticve, e.g. Ai9

One pays the monthly fee for the new stuff, which I don't need (I'm a user in my third decade, I don't fall for these stuff anymore, I know what I need).


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## JennyGW (Mar 21, 2016)

Mt Spokane Photography said:


> JennyGW said:
> 
> 
> > I bought CS6 Photoshop just before CC became available. All I need is Photoshop and I may have paid a chunk for it, but at least I paid one figure and I won't be paying forever. The last version of Photoshop I had was many versions old and I expect the version I have will be many generations old before I feel any need to upgrade.
> ...



CS6 was £450 pounds, for starters. What are "dollars"  ?

Note, the US gets it a lot lot cheaper than we do which makes me love Adobe even more.


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## Zeidora (Mar 22, 2016)

Been using PS since V3 (not CS3). Happily moved to Affinity Photo, which cost me $40 for a perpetual license. In some respect it is even better than PS. Not perfect, but nothing is. I pick my deficiencies and the trade-off is in favor of a perpetual license with my needed three installs on a single license.

Given that $40 reality, it would become very difficult for Adobe to sell PS for anything more than $50-100. That means, that the subscription is WAY too expensive. If you argue that purchase costs the equivalent of 4-5 years subscription, then the monthly subscription should be in the $1–2 range. At that price range, the management overhead for subscription is too high. 

Adobe is good at making profit, but not with my money. Renting is always more expensive than buying in the long run. And you do not own anything in the end.


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## neuroanatomist (Mar 22, 2016)

Zeidora said:


> Happily moved to Affinity Photo, which cost me $40 for a perpetual license...
> Given that $40 reality, it would become very difficult for Adobe to sell PS for anything more than $50-100.



Sorry, but why is that? That's like saying Sports Illustrated can't get away with charging $40/year because Baily's Magazine of Sports and Pastimes is free on Google. 

What, you haven't heard of Baily's Magazine of Sports and Pasttimes? Exactly.


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## Luckshot (Mar 22, 2016)

In the US, subscriptions are more tax-friendly than outright software purchases.

$120/yr is flat write off for PS/LR as a business expense. The annual(ish) upgrade either has to be an iffy §179 deduction or depreciated over multiple years.

Adobe played to this market, and photographer’s and designer’s accountants rejoiced.


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## JennyGW (Mar 24, 2016)

Mt Spokane Photography said:


> JennyGW said:
> 
> 
> > I bought CS6 Photoshop just before CC became available. All I need is Photoshop and I may have paid a chunk for it, but at least I paid one figure and I won't be paying forever. The last version of Photoshop I had was many versions old and I expect the version I have will be many generations old before I feel any need to upgrade.
> ...



I had the price wrong for CC. It's actually £100 a year. The last version of Photoshop I bought lasted me about 10 years. I'm still saving money.


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## Ozarker (Mar 24, 2016)

Mt Spokane Photography said:


> JennyGW said:
> 
> 
> > I bought CS6 Photoshop just before CC became available. All I need is Photoshop and I may have paid a chunk for it, but at least I paid one figure and I won't be paying forever. The last version of Photoshop I had was many versions old and I expect the version I have will be many generations old before I feel any need to upgrade.
> ...



I got a free year of Lightroom and Photoshop as part of a bundle when I bought my 5D Mark III. What a deal! CC has been good to me. Get all the upgrades too anytime they happen... unlike my former stand alone copies. I'm very happy.


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## s.smith (Apr 22, 2016)

Adobe CC program is great for the newbies


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## Keith_Reeder (May 14, 2016)

JennyGW said:


> I'm still saving money.



And you're missing out on tons of really useful new functionality. 

CC is worth the price of entry for me simply on the strength of PhotoShop's Content-Aware Fill...


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## Orangutan (May 14, 2016)

Keith_Reeder said:


> JennyGW said:
> 
> 
> > I'm still saving money.
> ...



Keith, I have no objection to Adobe offering CC as a subscription for those who use it intensively, as you may. I've said before that the subscription model is a good deal for professionals. I object to the fact that the software is not also offered as a perpetual license for those of us who don't need the latest features, but need more than the other offerings out there.


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## privatebydesign (May 14, 2016)

Orangutan said:


> Keith_Reeder said:
> 
> 
> > JennyGW said:
> ...



And Adobe have proven that trying to cater to that perpetual license customer, who 'upgrade' every second or third generation and yet demand ever more programming resources trying to maintain compatibility, just isn't worth the time money or effort. 

But companies like Affinity are working hard to fill the void.


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## YuengLinger (May 14, 2016)

Now they need to put some of this profit into customer support.

I spent hours with them on chat and phone, and, a week later had a reply by email that had nothing whatsoever to do with my problem. Complete fail, a caricature of "support."

But Amazon resolved things after a few tries, so I'm now happy with my first go at PS/LR CC.

And I can't help feeling that some of the enthusiasm for innovation is gone, that things are on autopilot. But profit is king!


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## Orangutan (May 14, 2016)

YuengLinger said:


> Now they need to put some of this profit into customer support.



That would cut into executive bonuses...can't have that!


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## jrista (May 14, 2016)

Orangutan said:


> jrista said:
> 
> 
> > As someone who has been writing software my entire life, this is excessively naive. When you have a long term well established product used by millions, that tiny little thing called "backwards compatibility" rears it's ugly head and throttles your software developers with immense hurdles to continuing to progress the software. Again, same issue Microsoft faces, the same reason they failed to create an entirely new platform (and one that could have blown the crap out of everything else on the market) when they were building Windows Longhorn. Longhorn was phenomenal based on my use of the leaked alphas, I was very excided about WinFS...then the whole thing was scrapped. They backtracked heavily, returned to their original code base, and...created Vista. Why? Because Longhorn alienated their entire userebase.
> ...



Adobe has a fairly extensive existing base of plugins from third-party manufacturers that put it in the exact same boat as Microsoft. However for Adobe products I was more referring to UI and user features, and keeping old features and functionality around for users who depend on them. Again, that is the same kind of problem Microsoft has with a lot of their products. Trying to change and improve their products when a massive user base does not want things to change at all (even if the UI sucks) throttles companies like Adobe and Microsoft. 

In a sense, a large percentage of user base demands "bloat"...assuming that is actually the current case with the code...I cannot say for sure, I've never seen the code. Personally, I think both companies should break with the past and forge ahead with some newer, leaner, meaner programs...but, it just isn't that simple. It never is. Affinity is in an entirely different boat. They are brand new. They had no existing user base, had no existing products, had no demands to keep things backward compatible. Give it a decade...Affinity is more likely to end up in the same boat as Adobe than not once they have a few million users. 



Orangutan said:


> >I have not had a single crash in any of the Adobe applications I use since moving to CC
> I don't believe I said it crashed frequently.
> 
> >Photoshop is PACKED with functionality...something you call "bloat"...something I call rich and capable...
> It's not the feature set I called bloated, it's the code. Adobe CC code is HUGE and slow relative to the feature set. If memory serves, a few years ago they even paused development to do a code audit to remove code bloat. Yes, there are many good features in Adobe products, most of which I don't need. I'm not asking for them to be removed on my account, I just wish the whole thing was more efficient.



What evidence do you have that the Adobe CC code is HUGE? Have you seen it? Last I knew, that was a highly protected code base, you know, what with it containing massive amounts of Adobe IP and all. 

What evidence do you have that it is slow? And on what kind of computer? Again, none of the Adobe programs I use skip a beat...except maybe Lightroom, which has always been a bit of a laggard, who knows for sure why. Photoshop CC is blazing fast on all of the computers I use it on, which includes a Windows 10 laptop which is often running background processes to control my astrophotography equipment while I use PS. 



Orangutan said:


> >I sometimes load massive astrophotography mosaics into it, saved as 32-bit float data
> > and covering around 200mp (and in one case, even more than that). Never skips a beat.
> That's great, I'm glad it works for you, but do you have reason to believe that no competitor could do that? Have you tried?



I never said I had reason to believe a competitor couldn't do the same. I simply said that Adobe has no problems doing it. If the product was truly bloated and slow and incompatible, then it would have a huge problem handling that much data. It did not. So, why should I bother looking for an alternative product, when the one I have (and the one I pay less than ten bucks a month for !!) works perfectly fine?



Orangutan said:


> Going back to my original point (and I'll try to be more clear): In a market-driven economy, a company that fails to deliver what customers want at a price they're willing to pay will fail. Some on this forum (I don't recall if you were one such) have made that point in regards to Canon, speculating that feature advances were a financial necessity. In my opinion, Adobe has used its market dominance (i.e. near-monopoly) to impose a subscription model. Were it really such a bargain for customers, they could have offered it as an option, and expected flocks of customers to jump at the chance. Had they not been able to enforce the software rental model they might have been forced to make more profound changes. I dispute the notion that the products would have died, but a reorg or IP sale would have been needed.



Market evidence would indicate that Adobe's customers ARE getting what they want, at a price they are willing to pay. Everyone seems to think it costs $50 a month to get an Adobe product. Actually, for those who don't need the full suite, it costs less than $20 a month to get one app. For photographers, we are a lucky group. We get two products, Photoshop CC and Lightroom CC, for $9.99 a month. I am truly amazed that people complain about that price. I used to pay around $700 every couple of years to upgrade, maybe every three. In either case, I was spending more per year to upgrade than I pay every year now at $9.99 a month. That is a GREAT price for the world's most used photo editing program. The vast majority of the photographers I know have moved to the Photographer's package, outside of a few holdouts who just refuse to accept the subscription model for anything (which is their prerogative, I understand the argument against subscription software.) 

But Adobe wouldn't be making record revenues if their pricing model was as egregious as you claim. Nor would they be making record revenues if the products were so "bloated" that they couldn't function properly, as you also seem to be claiming. In my experience, I have not noticed any issues from "bloat"...no slowdown, no lag, no issues working with a fairly wide variety of file formats, no issues working with MASSIVE files that consume huge amounts of memory and swap space. I even keep my undo history at a thousand levels, and I still don't have issues. It's GPU accelerated, so rendering is blazing fast and highly accurate. 

The issues you claim exist have never actually presented as a problem in my experience. I doubt they present in a general sense, otherwise there would have been a massive revolt against Adobe a long time ago. 



Orangutan said:


> I do not begrudge anyone the ability to choose a subscription model if it works for their needs and finances. My complaint is that I would be forced to accept it if I want to upgrade from PS6.



Again...seriously, $9.99 a month is too expensive? Most people spend many times that each month buying coffee. 



Orangutan said:


> My question to you: how would Adobe have been hurt by offering subscription as an option rather than requirement? More pointedly, if it's such a good deal, wouldn't customers have made that choice? By the way, if you want me to accept the argument that it would be excessively burdensome to offer both models you'll need to offer a very persuasive explanation.



Customers HAVE made the choice for the subscription model. If they had not, then record revenue wouldn't have occurred. Again, the Photographer's Package is a phenomenal deal. Most people seem to recognize that. 

Adobe made their case for the subscription model when they introduced it. They explained quite clearly why they were moving to a pure subscription model. Doing so, given the topic of this very thread, has apparently resolved the issues they were encountering. As a cloud customer for some three years or so now, I can attest to the fact that they deliver improvements and new functionality at a much faster rate than they ever did before, bugs are addressed much faster than before, and a lot of the DRM issues that USED to plague their products (that used to be the only true issue with their products...man, I HATED all the DRM crap that existed in CS3, CS5 and CS6) in the past no longer exist at all.


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## Don Haines (May 14, 2016)

Zeidora said:


> Renting is always more expensive than buying in the long run.


Not a good statement of the business.....

The problem that Adobe faced was that they had two kinds of users..... the users who bought the software, and the people who stole their software. Unfortunately for them, the number of people who stole their software was much larger than the amount of people who bought LEGAL copies of it. They came to the conclusion that by "moving to the cloud" and going with a subscription model, that they could drop the subscription price to well below what it costs to purchase and upgrade and with the greater amount of customers (those stealing it are now subscribing) that the net revenue would be greater.....

Those who used to purchase can now subscribe and save money......
Those who used to steal it are now subscribers and it costs them more money.... too bad, so sad.......


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## privatebydesign (May 15, 2016)

Don Haines said:


> Zeidora said:
> 
> 
> > Renting is always more expensive than buying in the long run.
> ...



Don, it is as easy to steal now as it ever was. Took the little buggers about a week to crack the CC security and a couple of months before a widely circulated stable 'free' version was available.


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## Don Haines (May 15, 2016)

privatebydesign said:


> Don Haines said:
> 
> 
> > Zeidora said:
> ...


DARN!


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