The figure has fallen from the initial price points of $530 dollars, likely from volume discounts and greater penetration in education. The new SaaS business operates at 93% gross margins.Īs the number of subscribers has swelled, Adobe has been able to maintain a relatively high average revenue per user (ARPU) of $451 per year or $37 per month in the last quarter. Only 30 months after launch, subscription revenues have outpaced license revenue at $2.1B and $1.6B respectively. The company transitioned from packaged software to SaaS for Creative Suite 6, which Photoshop, Illustrator, Indesign, Premier and other content creation software. As the plot above shows, the shift to SaaS was immediate in 2012. The licensed software business, a cash cow, generated more than $3.4B in revenue in 2011 at 97% gross margin. And in 2012, the company decided to disrupt its own businesses. Generating about $4B annually, Adobe is worth $38B and employs more than 12,500 people. The travel and expense management behemoth, Concur, recently acquired by SAP for $8.3B, is another great example that made the transition first from CD-ROM packaged software, then to enterprise license software and then to SaaS.Ībove, the line chart shows the astounding growth in the number of Adobe Creative Suite subscribers from the launch of CreativeSuite 6 in mid-2012 through March 2014 growing at 31% per quarter to 3.97M in their last quarter. Transitions from licensed software to SaaS are rare. It’s been a remarkable transition, and one not talked about very much in the SaaS world.
#ADOBE NUMBER OF USERS SOFTWARE LICENSE#
In 2.5 years, Adobe has transformed its business from a software license business into a SaaS business.