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Adobe Systems' competitors smell blood in the water.
Having seen the torrent of criticism that greeted the company's move last month exclusively to subscription sales for most of its software, many are launching promotions and otherwise scrambling to win over the disaffected.
'We've put in place our outreach program to users, saying, 'Hey, come and try us,' said Nick Davies, general manager of Corel's digital media and productivity software group. Corel launched a promotion that lets Adobe CS4, CS5, and CS6 users buy Corel software for the upgrade price rather than the full price.
'We've had a lot of inbound requests for CorelDraw, but also for PaintShop Pro, AfterShop Pro, and Painter,' Davies said. 'All our products have a free trial for 30 days. Hopefully we'll see a pickup [in sales] in 30 days.'
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Another company, Xara, which sells illustration and photo-editing software for Windows, $100-off promotion for Adobe Creative Suite customers, lowering the price to $199 and throwing in a free upgrade to a new version in the works. The company has seen new sales, too: 'People taking up the cross-grade offers roughly doubled in May compared to previous months,' said marketing director Charles Moir.
Corel likes subscriptions and is moving toward them, too, but it still sees a majority of its customers as preferring perpetual licenses, in which a customer buys the right to use a particular version of a program forever. Perpetual licenses are the traditional way to sell software, but it can be tough on software companies that must persuade customers to pay upgrade fees every year or two for new versions.
Creative Cloud launch and backlash
Many customers remain angry about Adobe's subscription change. Some have calculated that they'll suffer a price increase, and some don't like the idea of not being able to edit their files unless they keep on paying for the software.
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Adobe last year launched the Creative Cloud subscription service under which it offers its full array of software -- Photoshop, InDesign, Illustrator, After Effects, Muse, Premiere Pro, and more -- for $50 a month. It also sells individual product subscriptions for $20 a month. Encouraged by high customer satisfaction and adoption, Adobe announced in May it's moving solely to subscriptions, ceasing perpetual licenses sales except for last year's Creative Suite 6 versions and a handful of exceptions such as Photoshop Elements, Lightroom, and Acrobat Pro.
Doubtless a lot of customers are happy with Creative Cloud, which can be cheaper and which opens up new software vistas for customers. Adobe expects 1.25 million subscribers by year's end -- expect an update on the numbers next week as the company reports quarterly financial results -- and Adobe says it won't backtrack on its subscription move.
Adobe has all but had a lock on the market for software used by creative professionals. Now, though, competition see a way to pick that lock.
Take Quark, a company whose QuarkXPress layout software helped kick off the desktop publishing revolution two decades ago. QuarkXPress has largely been supplanted by Adobe's InDesign, and Quark has largely moved its business to a fuller suite of digital publishing software for large corporations managing lots of internal documents. But the reaction to Adobe's pricing move has Quark giving new attention to QuarkXPress.
'I was somewhat taken aback by the size and swiftness of the backlash,' said Gavin Drake, Quark's vice president of marketing. 'Adobe has been doing all sorts of things for a number of years and customers seem to have happily gone along with that,' but this time there's loud opposition, he said.
Promotions to woo Adobe customers
Quark is touting promotions for older customers who may want to dust their old Quark software off and start over. Through the end of the month, the company is letting anyone with an old version of QuarkXPress upgrade to the current version 9, and through another promotion this month, QuarkXPress 9 customers now get a free upgrade to version 10.
Part of Adobe's Creative Cloud sales pitch is that creative pros will get access to software they might not have been able to justify buying alone -- for example, an Illustrator user trying out Web page development or a photo editor trying out video. Drake, though, thinks a lot of customers are better off ordering off the a la carte menu than paying for the all-you-can-eat buffet.
'What percentage of the market needs all those tools?' he asked. 'There are very different skill sets required within Creative Suite. If I want to do illustration or photo editing or page layout, that's different from timeline-based Edge animations or detailed video editing. Some people can cross those boundaries, but a lot of people don't like to cross those boundaries.'
Nitro PDF, an Australian company that sells software for creating and handling Portable Document Format files, also is trying harder to woo customers using Adobe's Acrobat.
'We have seen increased discussion with our customers regarding the affordability of Nitro compared to the Adobe suite, especially in industries where cost is a higher factor than functionality like the education sector,' said marketing coordinator Spencer Jenkins. Nitro is also angling to take advantage of displeasure around what he calls the 'Adobe tax,' the comparatively high price of Adobe software in Australia.
Nuance, which also makes PDF tools, saw the same opening. Free adobe downloads for mac.
'We actually have a campaign in play to education as a result of Adobe backlash. Several higher-education institutions came to us complaining about the move to a perpetual license and asked if we would work with them,' said spokesman Kelby Troutman. 'When we saw what was happening we put a campaign out to the market in case there were more.'
And a Photoshop competitor, the Mac-only Pixelmator, got a bump from Adobe's move. 'With the recent Creative Cloud announcement we do see an increased interest in Pixelmator,' said team member Ausra Meskauskaite. The download rate quadrupled -- but then the company also just released version 2.2, which among other changes added vector-based illutration tools that compete with Illustrator.
New development directions?
Xara's software competes chiefly with Adobe Illustrator but also includes photo-editing features and document layout features that compete against Photoshop and InDesign. But it only runs on Windows. Might Adobe's subscription move have opened up options to expand to OS X?
'We've looked at porting our apps to Mac. It's extremely expensive, and we're a small company. It would cost $2 million to $3 million to do a port, and it's a huge distraction,' Moir said. However, it does heighten Xara's interest in its upcoming browser-based technology that will be work on Windows and Mac.
Corel is considering its development priorities, too.
'We'll be looking more closely at how we develop Photo-Paint, which is the image editor in the [CorelDraw Graphics] suite,' Davies said. 'We are a smaller shop, tightly financially constrained in many ways, but certainly we see an opportunity to improve the product. We're in throes of writing the next version.'
Although Adobe's competitors see new sales possibilities, some competitors are stopping short of criticizing subscriptions themselves -- indeed, Corel began offering CorelDraw Graphics Suite subscriptions alongside perpetual licenses since 2012 and expects to expand with new subscriptions later.
'There's no question the pendulum will continue to swing to subscriptions,' Corel's Davies said. 'It has advantages. they will become more and more important, including the ability to upgrade software continuously.'
'I understand why Adobe is doing it,' added Xara's Moir. 'Subscription revenue is great. You get a reliable, predictable income. You get out of the upgrade cycle nightmare that all traditional software developers have and that we do. Every year we bring out new version, we have to persuade customers to get the new version.'
But there's a big difference between offering subscriptions an option and offering them as the only option.
'The larger players are trying to move users more quickly to the cloud than users who aren't full-time users are ready to go,' Davies said. 'It does open up a significant opportunity for companies such as ours.'
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I've reached out to both Adobe and Apple for comments on MacDownloader and will update this post with their responses.