Sunday, August 28, 2016

Cloud Services: My thoughts (Part 2)

Some one responded to my discussion post wondering what is a better deal, paying for a software suite once or paying monthly and continuing to pay after you have paid the equivalent to cost of purchasing the software suite once.   They used Adobe as an example, and here is my responsive.

The big thing with paying monthly is that, as I mentioned, if I were to have bought the Master Collection when a new version comes out I have to purchase the next one, forking out another '2,600 USD'.  A new version of the Master Collection could come out every year, every other year, every three years, or whatever.

Before Software was released and the consumer bought the software, there weren't really any updates to the software, then the software companies started putting out updates that the user would have to download and install, then the software companies started automatically updating the software through the internet and there was less of a version system and more of the software update system that we are used to today.  With this new update system it makes more sense to pay monthly, it makes more sense to the user and to the company providing the software.

The point I am trying to get to is that instead of buying a brand new suite of software every time they come out with a new version, they pay for the product monthly and get all updates and newest versions when they come out.  so in a way they are saving money. 

a new suite of software comes out every other year cost 2600 USD that comes up to 6,500 for 5 years, so with what you said 'The current model lists a couple of ways to pay for the equivalent CC version with the cheapest coming out to just shy of 600 USD a year (Creative Cloud pricing and membership plans | Adobe Creative Cloud, n.d.). That means, within 5 years, I will have purchased a copy of the Master Collection - except that I will keep on paying for the CC suite. So which one is cheaper over the long term?'  I would say that by getting every update over the 5 years and automatically getting the new versions of the software, without paying a single lump sump is cheaper over the long term.

This is really a good play for the software companies as well,  having a product that costs soo much money up front makes it very hard for a lot of people to afford the software, this is what ultimately leads to people looking for bootleg copies of the software, this causes the company to lose money because they aren't being paid for their software.  The boot leg copies of the software might still be available with this model, but being able to pay a small amount per month encourages users to buy the product or at least use it on a monthly basis. Another thing about monthly payments is that if the user doesn't normally use the software but needs it for a month, they can purchase the software for a single monthly payment, this is very nice compared to what it used to be where a user would have to purchase the entire application if they wanted to use it, even if they were only going to use it once or twice, but being able to purchase a one month use for a small amount of money makes it more feasible for a user to actually purchase the software legally and then the company also makes more money because of the different market that would use the software for a single usage.

I think you can start to see the benefits for both the Company and the users more accurately now, Joel?

Better for the Customer because it is cheaper and their software is always up-to-date and their software is always the 'latest and greatest' that the company has to offer.

Better for the company because they have a more regular cash flow and a more loyal customer base.

No comments:

Post a Comment