Adobe Systems Goes All In on the Cloud

Monday, 6 May 2013 | 4:22 PM ET
Shantanu Narayen, president and chief executive officer of Adobe Systems
David Paul Morris | Bloomberg | Getty Images
Shantanu Narayen, president and chief executive officer of Adobe Systems

Adobe Systems placed a big bet on the cloud Monday, saying all new versions of its flagship creative software will be delivered by subscription only.

The move toward cloud-based delivery is the boldest yet from a major software company. Adobe said it will continue to sell an older version of its software, CS6, indefinitely; but the company will no longer update it.

For investors, customer reaction will be key. If creative software users embrace the changes, the subscription model should accelerate Adobe's shift toward more stable revenue growth. If they balk at the shift and interpret it as an attempt to force customers into a long-term billing relationship, Adobe might have to do some damage control.

(Read More: Adobe to Tackle 'TV Everywhere' With Primetime)

Adobe executives feel confident about the accelerated move toward subscriptions, I'm told, because Creative Cloud users have given the product such glowing reviews, even compared with popular products like Photoshop.

The upshot: Customers will pay $50 per month for access to all of Adobe's software, if they commit to one year. On a month-to-month basis, customers can buy access for $75 per month. Customers can buy access to a single product (say, Photoshop), for $20 per month for a one-year commitment.

—By CNBC's Jon Fortt. Follow him on Twitter:

email: tech@cnbc.com

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  • Matt Hunter is the senior technology editor at CNBC.com.

  • Cadie Thompson is a tech reporter for the Enterprise Team for CNBC.com.

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  • Lipton is CNBC's technology correspondent, working from CNBC's Silicon Valley bureau.

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