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Adobe moves flagship software upgrades to cloud

By Supantha Mukherjee and Sruthi Ramakrishnan

(Reuters) - Adobe Systems Inc said upgrades for its flagship software package, which includes Photoshop, Illustrator and Flash, would be available only through online subscriptions, effective immediately.

Adobe is the latest traditional software company to make a big bet on the cloud-based subscription model pioneered by companies such as Salesforce.com Inc, NetSuite Inc and Google Inc.

Subscription models bring in less money upfront as payment is spread over the entire period of use unlike traditional packaged software, but typically ensure more predictable recurring revenue.

Upgrades will be available only through online subscriptions from June 17, a company executive said on Monday at an annual conference, where Adobe showcases its latest products.

"Hundred percent of what we do moving forward will be in Creative Cloud, there will be no more Creative Suite, there will be no new version of Creative Suite," said Scott Morris, senior marketing director of Creative Cloud.

Creative Suite 6, launched in May 2012, combines software such as Photoshop, Illustrator, InDesign, Flash and Dreamweaver that are used by professional designers.

Creative Cloud helps customers access the Creative Suite software package through online subscriptions.

Customers can buy a Creative Cloud subscription for $74.99 on a monthly basis and $49.99 per month for an annual subscription.

The Creative Suite 6 Master Collection, which includes all Creative Suite tools, is priced at $2,599, an amount that could buy more than four years worth of Creative Cloud annual subscriptions.

"This is a shift that we've been looking at for quite some time," David Wadhwani, Senior Vice President, Digital Media, told Reuters in an interview.

"We plan to continue to support and sell Creative Suite 6 and customers can continue to purchase that for the foreseeable future," he said.

While the existing design programs will still be sold for a license fee, which customers buy once and can use for years without making extra payments, those software won't get the newer functionalities, Adobe executives said.

(Corrects paragraph 6 to say Creative Suite 6 was launched in May 2012, not June 2011)

(Additional reporting by Jim Finkle in Boston; Editing by Saumyadeb Chakrabarty)

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