Screen shot of Adobe's CS5.5 website

Adobe’s new SAAS model

During my surfing today, viagra I learned that Adobe is poised to release Creative Suite version 5.5. Since we just upgraded all our software at work to CS5, I was curious to know what had changed.

As I was reading on Adobe’s site, I saw that they are now offering a subscription price, in addition to their upgrade and initial purchase prices. Thus, it appears that Adobe is moving to a software-as-a-service (SAAS) model, which is an interesting move. Is it a good buy for you? Well, lets look at the numbers.

There are some Adobe products that I absolutely love. I love PhotoShop,  Illustrator, and Dreamweaver. I’m a fan of InDesign and Acrobat. I use these tools at work, but have never been able to justify the cost to purchase these for home use. Would it be cost effective for me to do so now?

Take a look at these options:

Product Full Upgrade* SAAS** Months to justify initial investment***
Design Premium $1899 $399 $95 20
Web Premium $1799 $399 $89 20
Production Premium $1699 $399 $85 20
Master Collection $2599 $549 $129 20
Photoshop $699 $199 $35 20
Illustrator $599 $199 $29 20
InDesign $699 $119 $35 20
Dreamweaver $399 $119 $19 21
Flash Professional $699 $119 $35 20
Premiere Pro $799 $179 $39 20
After Effects $999 $179 $49 20
*Starting price; actual upgrade price varies based on license you currently own
**This is a monthly, recurring cost, based on a one-year commitment. Month-to-month recurring costs are higher.
***Divide Full cost by SAAS cost to determine how many months you’d need to pay for SAAS to reach the same financial commitment as purchasing the Full version of the product.

Take a look at that last column. You’d have to pay the SAAS price for almost two years to have paid the same amount as you would pay by purchasing the Full version of the product. And then, after two years, you’d still be using CS 5.5! When you go with the SAAS price, you’ll get constant upgrades to the most current version of the product.

Adobe, however, is not being totally upfront about the cost, here. First, they tell you that the price in the SAAS column is for a yearly purchase. What they don’t tell you until you click on the “Buy Now” link is that this is a monthly recurring cost, based on a one-year commitment.

Ok, so what is the total cost of ownership? Which model is going to be cheaper for me?

Let’s look at the cost of ownership over a five year period. Let’s say I purchase my Adobe software at full retail price, and then upgrade yearly for five years. How much will I spend in total? How does that compare to paying the SAAS price monthly for five years?

Product Purchase/Renew 

Option (5 yr)

SAAS Option (5yr)
Design Premium $3495 $5700
Web Premium $3395 $5340
Production Premium $3295 $5100
Master Collection $4795 $7740
Photoshop $1495 $2100
Illustrator $1395 $1740
InDesign $1495 $2100
Dreamweaver $1195 $1140
Flash Professional $1495 $2100
Premiere Pro $1595 $2340
After Effects $1795 $2940

While this is a low up-front cost to getting Adobe products, the costs will be higher in the long run (in this case, 5 years). You can save even more by purchasing the full product and only upgrading every-other year.

So, is this new pricing structure a better deal? Not if you planning on continuing to use the software for years to come. If you are working on a contracting job and need a product for a couple of months, or even a year or two, then you will probably save money using the subscription model. The rest of us, who will want to continue using products for the foreseeable future will probably want to stick to the traditional pricing, even if it does cause a bigger initial hit to the pocketbook, because even though the start-up cost is smaller, the overall cost of ownership over several years is cheaper with the traditional purchasing option.

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One Response to Adobe’s new SAAS model

  1. Sherry Quinn April 21, 2011 at 12:01 pm #

    Paul,

    Thanks for this Adobe update information. I use a couple of Adobe suites and the price of the upgrades is always a concern. Knowing that the service would cost me more is very helpful.

    Sherry

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