Beware of Adobe's new subscription pricing

Users will pay more for Adobe software if they subscribe, even with Adobe's more frequent upgrade cycles

The newly released Adobe Creative Suite 5.5 has a smattering of new features, including boosted support for mobile devices and HTML5. But buried in the announcement is a new pricing model that is akin to a siren's song: enticing, but best avoided.

The suite -- as well as its individual components -- can be had via a typical software license or a monthly subscription. Although the monthly subscription may look like a good deal, some quick calculations show otherwise.

Take Photoshop, for example. The most popular part of Creative Suite, it costs $699 as a regular license purchase. That seems like an expensive piece of software, especially next to the $35-per-month subscription price. So why plunk down $700 when you could just kick Adobe a modest $35 each month? Well, if you plan on using the software for two or more years (and who doesn't?), the $699 license is the cheaper option.

At $35 per month, subscription pricing costs $420 a year; for the first year of use, the license is more expensive than 12 months of subscription use. However, after two years, subscription users will have paid $840, whereas license users will still have paid $699. And on it goes -- $1,260 for three years, $1,680 for four years. The unfavorable ratios for the subscription plans work out similarly for its other products and suites.

The curveball is that Adobe issues a major upgrade about every 24 months, and then offers the upgrade at a discount (the most recent figures tab the upgrade price at $199). But even with that cost factored in for the third and fourth years of use, licensing comes out to be the cheaper option: $1,260 (third year) and $1,680 (fourth year) for subscription, $898 ($699 + $199) for licensing -- and that's assuming users even opt for the upgrade.

Another curveball: Adobe says it will issue "midcycle" upgrades for some products, meaning a new update a year after the major version update. It's yet one more opportunity to pay Adobe a license fee, making a 24-month upgrade cycle into a 12-month one -- for some of the products some of the time.

Check out InDesign -- if you bought InDesign CS 5.0 and paid the $699 full license two years ago, then buy the $119 CS 5.5 update this year and the CS 6.0 license a year from now for presumably another $119, that's $937. If you bought the CS 5.0 version, skip the minor new features in the CS 5.5 update, and get the CS 6.0 upgrade a year from now (presumably for $199), that's $898. The subscription for the same four years of usage between 5.0 and 6.5 would cost $1,440 via subsription.

In other words, paying a license update every year to always have the latest version is still cheaper than subscribing.

If you only need the software for a short while, then clearly subscription pricing is the way to go. But if you want to actually keep the software and use it over a longer term, then do your wallet a favor and buy the license.

This story, "Beware of Adobe's new subscription pricing," was originally published at Get the first word on what the important tech news really means with the InfoWorld Tech Watch blog. For the latest developments in business technology news, follow on Twitter.

Copyright © 2011 IDG Communications, Inc.

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