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Software subscriptions: #progressive or #premature?

ChangeLast year, Adobe became a pioneer in offering software subscriptions by unveiling Creative Cloud, their subscription-only software service.  Yesterday, they took the next step by announcing plans to discontinue development of their Creative Suite or other CS products. Focusing all future effort on Creative Cloud, Adobe will no longer offer its classic, packaged software product in this category.

Industry reaction is mixed. Some pundits point to this as the future, others explore challenges, and a few wonder if Office is next.

Like Adobe, we think subscription software-as-a-service is the future. The benefits to consumers are huge. Subscribers are always up-to-date. They get the latest and most complete applications.  They can use subscriptions across the multitude of devices people use today. Web services like SkyDrive and applications like Skype are also more easily integrated with subscription services, like the new Office 365 Home Premium.

However, unlike Adobe, we think people’s shift from packaged software to subscription services will take time. Within a decade, we think everyone will choose to subscribe because the benefits are undeniable. In the meantime, we are committed to offering choice–premier software sold as a package and powerful services sold as a subscription. 

As proof of this point, since the launch of Office 365 Home Premium and Office 365 University in January, more than a quarter of consumers buying Office have chosen the subscription. This exceeded our expectations, given that software subscriptions are relatively new to most consumers. So, perhaps the shift is happening faster than we originally thought, and Adobe is helping blaze the trail. Tell us @Office or in the comments what you think.  Software subscriptions: #progressive or #premature?

–Clint Patterson

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