Adobe has released its quarterly figures for its third financial quarter 2012. The figures show the success of Creative Cloud, Adobe’s subscription-based model for purchasing the Creative Suite applications, including Photoshop, Illustrator, InDesign, Acrobat and Flash. Total revenue is fractionally up on the same period in 2011, from $1013.2M to $1080.6M.
Adobe reports over 200,000 paid subscribers and 8,000 new subscriptions per week, compared to its projections of only 5,000 per week.
The Creative Cloud model has several advantages for Adobe. First, it gives assurance of a steady continuing income rather than the pain of driving a 2 year upgrade cycle. Second, it forms a platform from which to sell other products and services.
Adobe also says that its publishing platform, the Digital Publishing Suite, now has 1,100 customers distributing on average 125,000 publications daily, mainly to the iPad, with over 40 million delivered to date. This is good business for Adobe since it generally charges a fee per download.
The slight downside for Adobe is that the launch of Creative Suite 6 delivered lower initial revenue than is usual for a new launch, because customers are transitioning to the subscription model. That is not really a downside, but rather a sign that the strategy is working.
What impresses me about Adobe is how well the company has survived the decline of Flash and the relative failure of its efforts in enterprise applications (the digital enterprise segment is now subsumed in the figures into “Digital Marketing”). The segment breakdown for the third quarter looks like this:
- Digital Media (Creative Cloud) 769.1 (71%)
- Digital Marketing (analytics etc) 257.1 (24%)
- Print and Publishing 54.4 (5%)
Think back a couple of years. Adobe was dependent on sales of shrink-wrap software and had a range of products which pivoted around Flash as the universal runtime and rendering engine. Now it has some claim to being a cloud company – though of course the primary benefit of Creative Cloud is in desktop software applications that you download – and in place of Flash it it betting on HTML5, together with its ability to compile Flash-based content into native applications.
The transition is not so easy for developers who invested in the Flash platform, coding applications in Flex and ActionScript. Adobe has stopped developing Flash for mobile, even on Android and other mobile platforms where it is not blocked. Still, if that has pushed developers into targeting HTML5 earlier than they would otherwise have considered, it may not be a bad thing.
- Adobe announces next Creative Suite, now called Creative Cloud
- Adobe news: Flash Builder 4, Creative Suite 5, quarterly results
- Adobe Creative Cloud giveaway at Microsoft Build: sign of a new alliance?
- What’s in Adobe’s Creative Cloud, and should you go cloud or purchase outright?
- Adobe opens up Creative Cloud to app developers