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Commentary: Adobe Goes All In on the Cloud

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From Shakespeare's sonnets to this year's Adobe MAX announcements for its software line of creative products, it appears that nothing really changes when a name change occurs. A rose is a rose is a rose, or so the saying goes.

Yet Adobe signaled a significant change in policy when it announced the change of its products' name from Creative Suite to Creative Cloud.

One shift is the demise of the versioning number, where Creative Suite 6 products would be known as CS6, replaced simply by CC for Creative Cloud. After Effects or Premiere Pro, both of which we discuss in an article on Streaming Media Producer, are now known as After Effects CC and Premiere Pro CC.

The other shift is the jettisoning of feature updates for purchased desktop products. When Adobe first announced the launch of Creative Cloud in April 2012, one question asked at the launch event centered on update parity for features on both CS and CC. At the time, Adobe was a bit guarded in its answer, only saying that it would use CC as a test bed for new features, later offering them in sub-version releases (e.g., 6.1, 6.2, 6.2.1, etc.).

At this year's MAX, though, there was no missing the message that David Wadhwani, Adobe's senior vice president and general manager of the digital media business unit, delivered.

"When we looked at supporting some products across both Creative Suite and Creative Cloud, we decided to focus on Creative Cloud," he said.

Reaction online was swift and full of confusion.

"I wonder what consequences this has for current users of CS5 or CS6," tweeted  Ingrid Motzheim, @MacGirlie108, just after Wadhwani announced the name change. "Creative Cloud subscription only?"

Later in the keynote presentation, Wadhwani announced that, while CS6 would still be available for sale, Adobe doesn't plan to add any new features to CS6. In other words, get on the cloud or be left behind.

It's a stark message—and one fraught with peril for many reasons, including two we'll cover below—but it's not really a surprise other than the timing. Moving to subscription models is exactly what Adobe's been placing its efforts behind—with everything from early Creative Cloud adoption to the more recent Primetime.

What About Flash Player, Part Two

In hindsight, the broader Adobe move to a subscription-only model brings one part of Primetime into clearer focus.

The decision to allow playback of Apple HLS and MPEG DASH content only in the Primetime Player, which rides atop the Flash Player architecture, begins to make logical—if not business—sense with the news that Adobe's planted a flag around CS6 as being the best product a consumer can buy.

If you want anything better, you'll just have to rent, Adobe seems to be saying, because we're not going to enhance products and technologies that don't give us recurring revenue.

From a Primetime perspective, the stand-alone Flash Player architecture—free to download for playback of content from any Flash Player-compliant content—doesn't generate any recurring revenue. As such, it may very well face the same fate as CS6, stagnating in its technology to be replaced by something that either consumers or publishers need to rent to access new features.

That something, at the moment, is Primetime. But if the move from CS to CC is any indicator, Primetime is the first step in a move to gain additional recurring revenue streams.

Generating Buzz, Delivering on Promises

Two areas in which Adobe will face additional challenges, both of which we've already seen in the past year, are in buzz generation and the vexing authentication issues for those who do business on the road.

With the lack of a version branding—Creative Cloud is just CC, not CC1—Adobe will have to come up with new ways to generate buzz around updates to the line of software products. It currently pushes out small updates every few weeks, but there's no differentiation between bug fixes and major updates, even if one reads the additional detail in Adobe Application Manager, the gatekeeper desktop product that monitors which products have been downloaded and which have not.

Adobe will need to find a way to address this buzzkill, perhaps by continuing to add applications, moving features from what were core point products into smaller products purpose-built for simple tasks. After all, Photoshop is now on the same par as Muse, since both are just applications in a rented software package.

On the authentication front, I've experienced numerous issues with authentication over the past year, both in the United States and abroad. It's hard to pin down some of the problems, with some Adobe representatives saying it's because I travel abroad too much (guilty) and others uncertain why particular products require authentication at the end of each calendar month, rather than 30 days after initial authentication.

Regardless of the reasoning for authentication, Adobe seems to have fallen for the Netflix fallacy: Abandon physical delivery of content on the assumption that all users have connectivity all the time.

In the case of Netflix, the market reaction was swift for the majority of customers outside of Silicon Valley that didn't have fast enough bandwidth to stream and who resented being forced to stream rather than watch a guaranteed-quality movie via DVD.

In Adobe's case, the reaction will be a bit more subtle. In the U.S., there will be great consternation, and Adobe will have to figure out a way to provide versions to certain government organizations that don't want to constantly "phone home" from sensitive computer networks. They'll also have to figure out how to handle educational institutions that have large computer labs. But the overall software rental model will probably work for a time, as Adobe has already seen an increase in uptake for Creative Cloud.

The bigger issue Adobe will face in the U.S. will be a rise in efforts to hack the system, with the prize being access to everything Adobe offers if one can thwart the ongoing authentication system.  Already there's online buzz about how this might work.

In the rest of the world, Adobe is going to be caught by surprise at just how little constant connectivity exists. Yet they only need to drive a few kilometers from their Noida facility in northern India to experience areas that have connectivity woes not unlike those I've faced in a number of emerging markets.

In the end, after four authentication snafus, my solution was to drop back to CS6, knowing I wouldn't have access to some programs that were CC-only products. But it was worth losing access to those products—and even the newer Dropbox-like asset sharing, which wasn't practical for working in emerging markets due to the slow speed of connectivity when it was available—in order to get the project done in a timely fashion.

The "CS6 is good enough" response is probably not an approach Adobe's executives or shareholders want to hear, but it may be a refrain over the next year as creatives suffer cloud fatigue due to the number of outstanding issues Adobe has yet to address as it goes "all in" to software subscriptions.

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