How greedy is Adobe's Creative Cloud subscription? Not very

While haters are hating Adobe's shift to subscription-only software, a price comparison shows plenty of customers won't be gouged by the Cloud.

Over a three-year period, Adobe's Creative Suite products can be more expensive than a Creative Cloud subscription. This price calculation assumes one new version and one upgrade of the CS suites on the one hand and no first-year promotional pricing discount for the subscription.

(Credit: Stephen Shankland/CNET)

Plenty of people are outraged that Adobe is moving to subscription plans and scrapping perpetual licenses. But should they be?

To shed some light on the situation, CNET broke out the spreadsheet software, dug into pricing information from Adobe and retail outlets, and put together some actual comparisons to see whether that wrath is deserved.

The answer, as with all things complicated, is that it depends. But at least in some reasonable situations -- not just power users but also middle-end customers who upgrade to Adobe's latest releases -- the Creative Cloud isn't a bad deal at all.

For example, imagine a customer planning on three years' use of the Design Standard version of CS6, which includes Photoshop, Illustrator, InDesign, and Acrobat Pro. That customer would pay about $1,648 for the original product and one upgrade at going rates.

With the Creative Cloud, $1,800 pays for three years' worth of that software. But for that extra $152, the customer also gets Premiere Pro, After Effects, Flash Pro, Edge Animate, Muse, Lightroom, Dreamweaver, Audition, and various online services.

Choosing the Creative Cloud is a no-brainer when looking at the CS6 Production Premium package, which is like CS6 Design Standard but also with Premiere Pro, After Effects, Speedgrade, Audition, and Flash Professional. The premium package price is $2,273 for an original version and update -- $625 more than the subscription, but with less software and no online services.

Adobe's Creative Cloud subscription includes software, services, and tools for social networking and collaboration.

(Credit: Adobe Systems)

12.8 million subscribers so farA sizable number of customers seems to agree: Adobe has sold 12.8 million software subscriptions compared to 5.6 million CS6 product licenses, according to Jefferies analyst Ross MacMillan.

Perhaps Microsoft is right to assert that Adobe is premature to go whole hog for subscriptions, but plenty of customers are voting that way with their feet.

"From my conversations with agencies and small shops, the price is compelling," said IDC analyst Al Hilwa. "Most small shops are likely to find the subscription more palatable than large outlays of funds."

The Creative Cloud subscription costs $50 a month for those who sign up for a year's commitment, and it grants access to Adobe's entire software suite and an expanding range of online services as long as customers keep paying. Adobe introduced it last year as a complement to its Creative Suite products, for which the company sold licenses that permit perpetual use of the software.

Adobe said the Creative Cloud adoption went faster than it expected and so decided to scrap the perpetual licenses. That means it avoids the expense and complication of maintaining a separate version. It also means the company can deliver new features as they arrive to all new customers, not to subscribers only as has been the case for the past year.

Adobe plans to sell CS6 products "indefinitely," but all the new action is with the new Creative Cloud product line. For details about what's coming in the big update in June, check my colleague Lori Grunin's Creative Cloud coverage.

The more active a customer is with Adobe products, the more compelling the Creative Cloud is. Adobe offers subscriptions to individual programs, such as Photoshop and Premiere Pro, too, for $20 a month. But it's clear Adobe is hoping to lure people into paying the somewhat higher price and delve into software they might not have been able to justify buying through the traditional perpetual-license model.

Cost comparisonFor our analysis, we looked at three situations with costs over three years. In all of them, there were two cases to compare: (1) a subscription that includes the lower first-year promotional pricing Adobe offers, and (2) perpetual license purchases based on CS products today and the one upgrade at the price Adobe charged to upgrade from CS5 to CS6 products. In the past few years, Adobe has released CS updates at intervals ranging from 12 to 24 months, so one upgrade would arrive over a typical three-year period.

Over a three-year period, Photoshop -- a new version and an update -- is more expensive than a subscription to Photoshop Creative Cloud. This calculation doesn't include the subscription's first-year promotional pricing discount for existing CS customers.

(Credit: Stephen Shankland/CNET)

We looked at the prices new customers would get. Adobe has offered lower upgrade prices for existing customers for years, and now they get a lower first-year promotional price for subscriptions -- $30 per month for the whole Creative Cloud (instead of $50) and $10 per month for the individual products (rather than $20).

Of course, those assumptions won't apply to everybody. Perhaps the biggest one is the rate at which perpetual-license customers upgrade. Many customers cut costs by skipping some upgrades.

On the other hand, buying CS6 products won't get you access to online extras, such as file-sharing services, Web fonts, Behance social networking, and iPad publishing. Not even Master Collection, which is Adobe's top-of-the-line CS6 suite, has the new Muse and Edge products.

How might a Master Collection customer look at Adobe software? Probably pretty favorably.

Over that three-year period, Master Collection and an upgrade would be about $2,644. The Creative Cloud subscription is $1,800. Slam dunk.

Another case is someone who uses just a single title -- Photoshop, most obviously.

That costs $818 for a new version and an upgrade, compared to $720 for a single-product subscription over three years.

So who would be better off with the traditional CS approach?

Someone who plans to upgrade rarely. Somebody who doesn't trust Adobe's promises to regularly release useful updates and new services. Somebody who takes issue with not "owning" software. (Of course, customers really only own licenses to use it).

Creative Cloud isn't cheap, and neither were the CS products that came before. But just on the basis of pricing, it's hard to conclude Adobe is gouging customers much more than it has in recent years.