How Subscription Based Software is Bad for Customers

Software companies are working hard to convince you that a pure subscription model is good for you.  Sometimes it actually is. But mostly its not, because its implemented in ways that is bad for customers and their businesses. Nowhere is this more apparent than the direction of Adobe Creative Cloud.

Lets start with the painful lesson one user of Creative Suite 6 learned that caused him to invalidate his license and get locked into the subscription model.
Here is an excerpt from a user over on Macintouch:

Yet again Adobe made another unexpected reach into my wallet. Don’t upgrade your CS6 standalone to CC, or you will lose your CS6 standalone license. They got me, I fell into another trap upgrade, and now I’m screwed. There’s no other word for it.

I had upgraded CS suite to CS6 because I was not going to buy into cloud’s ability to switch off the way I make my living. I figured that would buy me a couple years. Then CC files began showing up, so I opted a few months ago for Adobe’s offer to existing CS owners to get CC for 1 year reduced price. I remember entering my CS suite serial at some point to verify that I was an owner of CS6 but not agreeing to disable my CS6. The one year price was basically similar to other offers for non CS suite owners.

I bought a new MacBook Pro last weekend and decided to install the CS6 suite that I own. No way. My acceptance of their stupid CC offer has overridden my license on CS6. I invalidated my CS6 serial, since I used it for the upgrade to CC. I called and was told I switched and there is nothing they can do.

So I paid full price for CS6 a year ago, just to have it switched off because I went for Adobe’s reduced rate offer for existing owners. Another trick, gotcha by Adobe. Again, they got me.

Effectively, his license was converted over to a CC license – invalidating his CS6 license. That doesn’t surprise me at all, because that is exactly Adobe’s plan.

Software developers, especially makers of mature products, have three major problems. Ill deal with the third in a future post. Those problems are:

  • Keeping their products from being pirated
  • Making their revenue model more predictable and less risky
  • Figuring out how to keep getting upgrade revenue when the current version is enough for most users

The piracy problem is a major issue for software vendors. Most laws are both ineffective and expensive to enforce. Sending DMCA notices is only really matter if the other guy has something to lose. Having software that has an increasing requirement to connect to a server in order to work, and thus could be shut down at any time without notice, gives them more control. No matter how simplistic it works now – a “call in” once a month, they can always modify this later. And you are stuck with whatever happens then.

Like our Macintouch reader, once you buy in, you agree to a new end user license agreement that can be modified at any time you connect. Your rights can change at any time. The features of your product can also change at any time. You have no recourse if something goes wrong.

The revenue model of subscriptions solves  problem with software that’s been around since the beginning. Software has huge R&D up front costs. Developing a new, major release means many months of expensive development, and the more complex the product is, the greater chance to overshoot your budget – the reason why you hear so many game studios going under before they can finally ship their game. If the software vendor has a channel strategy, there is also the logistics of dealing with old products in stores, and shipping out new products. An updating subscription model means you can ship a package which can become more “evergreen” – you only update it when you have a major branding change.

But back to R&D. If software becomes metered to a service, revenue comes in more regularly and from more customers. Getting someone to pay X per month is easier than getting them to pay 60% of the new software price all at once. It also reduces customers from considering to switch to a competing product, based on price.

Software companies can also limit technical support only to the newest version only, reducing overhead support of older versions – either you are a current subscriber getting support, or you get nothing.

These solve a lot of long time problems for software vendors, but where is the benefit to customers who could just as easily just download a patch from the vendor site as they have done for years?




Leave a Reply