In addition, new customers may still purchase Adobe Creative Suite using one of two traditional licensing plans:
- Transactional Licensing Program: A perpetual license with a one-license minimum designed for smaller organizations with a single pricing level.
- Contractual Licensing Program (CLP): A perpetual license with a 10,000-license-point minimum requirement. Customers can purchase and download all Creative Suite desktop products, but support costs extra. The CLP is a two-year agreement.
Adobe's Creative Cloud licensing model may change the nature and complexion of its audits significantly. One of the major benefits of a subscription-based VIP cloud license is automatic program updates and support, which greatly simplifies licensing compliance. Using a cloud-based service gives Adobe and other software vendors much greater control over the use of its software. It's reasonable to predict that as more organizations opt for the VIP subscription-based licensing program, the need for audits will decrease.
For the large global vendors, it is difficult to transition from a traditional license to a subscription-based model. If you look at the largest 10 global enterprise software companies including Microsoft, IBM, Oracle, and SAP, less than 2% of their revenues are derived from SaaS.
Here are some of the reasons we believe the transition has been so difficult:
- It is hard to move away from the significant upfront fees earned through perpetual licenses to a much smaller recurring monthly fee. This would decrease immediate earnings and negatively affect the valuations of the large public vendors.
- The SaaS business model has not yet proven itself in any meaningful way to be viable given the limited number of software businesses that have achieved scale and profitability.
- Most in-house development and implementation teams are not structured to build and deliver multi-tenant solutions through the web. This requires significant investment and time.
- Traditional sales teams have not educated their customers to accept monthly recurring fees and are not structured to facilitate a low touch sales approach.
- IT departments have been reluctant to share sensitive data through the web for security reasons.
- There are no significant upfront fees.
- The client always has the most up-to-date version of the software.
- The software is easily configurable and takes less time to implement than on-premises solutions.
- Security has been less of a concern with the introduction of secure data sites and private clouds. Software is being audited to ensure it meets compliance guidelines.
- Employee workflow is much more efficient, the software is mobile friendly and can be accessed from anywhere.











