Microsoft & Adobe Publicly Debate Subscription Software

Following Monday’s news that Adobe will move exclusively to cloud-based subscriptions for future Creative products, Microsoft responded publicly Tuesday by mildly criticizing Adobe for eliminating customer choice and promised to continue to offer retail copies of Microsoft Office.

Like Adobe, Microsoft also offers its flagship productivity software, Microsoft Office, via a yearly or monthly subscription package called Office 365 (currently $100 per year/$10 per month for home users). Unlike Adobe, however, the company still maintains retail copies of the software for a one time cost with no expiration.

In a blog post — titled “Software Subscriptions: #progressive or #premature?” — Microsoft Director of Communications for the Office division Clint Patterson argued that software subscriptions, while valuable, are not yet ready for the entire market, and that customers still want packaged software with perpetual licenses. In fact, according to the post, only 25% of new customers purchasing Office choose the subscription model.

…unlike Adobe, we think people’s shift from packaged software to subscription services will take time. Within a decade, we think everyone will choose to subscribe because the benefits are undeniable. In the meantime, we are committed to offering choice–premier software sold as a package and powerful services sold as a subscription.

Like many companies in recent years, Microsoft has made no secret about its desire to move to a subscription model; smaller regular payments greatly benefit software companies over larger infrequent transactions. From a user’s perspective, subscriptions can have a positive side as well. For a user who knows they’ll need a product like Office or Photoshop every year, and for those who desire to keep up with the latest features, subscriptions offer a lower cost means of staying up to date compared to large yearly purchases.

However, many users fear the precedent set by companies like Adobe. Some users don’t need the latest features, and would prefer to keep the same copy of their software for years. Still other users no longer work with professional applications but would like the option to open, view, and convert their old files and projects. These customer desires may soon no longer be possible.

In response to initial feedback from customers, much of it negative, Adobe is considering tweaks to its subscription service. John Nack, an Adobe product manager, wrote Thursday that the company may offer a way for users with expired subscriptions to still open, view, print, and possibly convert and export their Create Suite files. Mr. Nack referenced a user’s email and asked his readership if the user’s suggestion would address user concerns:

Reader Alan Ralph writes,

Adobe should change their software so that when it’s used outside of a subscription, it will only allow opening, printing and exporting to other formats. That would ensure that you could still access your documents and make use of them. Seems like a no-brainer to me.

Would that address your concerns?

Perhaps most interesting is that even in Microsoft’s critique of Adobe, the company tacitly admits that a time will come (“within a decade”) where only subscription software will be offered because “everyone will choose to subscribe.” It’s unclear if that means that Microsoft will eventually offer only a subscription service, or if the company will adjust pricing and benefits so as to make the retail offer unappealing for the majority of consumers. The company also refused to set a timetable for any transition, telling CNET that Mr. Patterson’s comments in the blog post do not guarantee that retail copies of Office will be offered for at least the next decade.

As “cloud-based” services — which includes a wide range such as Netflix, Apple’s iCloud, Dropbox, and Xbox Live — increase in importance each year, it is perhaps not a stretch to envision a future where all software is distributed on a subscription model. Whether perpetual payments for new features outweigh a perpetual license will be a calculation unique to each user.