Software as a Monthly Rental; Photoshop is now the biggest-name software that you can’t actually buy, as the new version costs $30 a month, or $240 a year

July 3, 2013

Software as a Monthly Rental


There’s a new reason for Photoshop to be famous.

Yes, it’s still the program that just about every photographer and designer on earth uses to retouch or even reimagine photos. It’s still the only program whose name is a verb. But now, Photoshop is also the biggest-name software that you can’t actually buy. You can only rent it, for a month or a year at a time. If you ever stop paying, you keep your files but lose the ability to edit them. You have to pay $30 a month, or $240 a year, for the privilege of using the latest Photoshop version, called Photoshop CC. Or, if you want to use the full Adobe suite (Illustrator, InDesign, Premiere and so on), you’ll pay $600 a year. The price list is stunningly complex. The fees may be higher or lower depending on how many programs you rent, whether you already own an existing version and which one, whether you commit to a full year or prefer to rent one month at a time. There are also discounted first-year teaser rates, student/teacher rates and a 30-day free trial. But you get the point: the dawn of Software as a Subscription is now upon us.Microsoft is conducting a similar experiment with the latest version of Office. An Office 365 subscription is $100 a year. But there’s a big difference: renting Office is optional. You can still buy it outright if you prefer.

It should be obvious why Adobe is enthusiastic about rental software. First, it’s big money.

Not everybody will pay more than before under the new plan. If you use three or more Adobe programs and you upgrade to the latest versions every year, you’ll save money by renting.

But if you use only one or two programs, you’ll pay much more by renting — especially if you were in the habit of upgrading only every other year, for example. Here’s the math: Photoshop CC alone will cost $240 a year. In the old days, buying the annual upgrade cost $200, and you didn’t have to upgrade every year. In three years, you might have spent $200 or $400; now you’ll pay $720.

And Adobe could raise the rental prices at any time. Every year, if it chooses.

Adobe also benefits because a rental plan helps it cut down on software piracy. Despite its name (CC stands for Creative Cloud), the new software versions are not, in fact, stored online. You still download Photoshop, Illustrator and the other programs and run them from your computer. But the downloaded software checks in with the mother ship every 30 days, over the Internet, to make sure the subscription is up to date. If not, you’re locked out.

Finally, Adobe benefits because it’s no longer committed to a difficult, relentless annual release cycle. There will no longer be a big new version of each Adobe program each year. Instead, Adobe says that it will regularly slip in new features as soon as they’re ready. The company hasn’t decided whether it will ever use numbers again (Photoshop CS4, CS5, CS6), but for now, the name is simply Photoshop CC.

So far, the switch to a rental-only plan may sound like a rotten deal for many creative people, especially small operators on a budget. And, indeed, many of them are horrified by the switch. A touching but entirely hopeless petition ( has 35,000 signatures so far. (“We want you to restart development for Adobe Creative Suite 7 and all future Creative Suites,” it says. “Do it for the freelancers. For the small businesses. For the average consumer.”)

Adobe, however, points out that rental customers gain vast advantages over the old “you buy it” system. The big one, of course, is that perpetual refinement principle. You’ll always be up to date with software that’s constantly improving.

Adobe also points out that subscribing to Photoshop gets you more than just the right to download the software. The subscription comes with access to Behance, an online portfolio where you can display your Adobe-created documents and read admiring comments from fellow creative types. You also get 20 gigabytes of online storage for files, Dropbox style, so you can work on them wherever you happen to be.

Another perk: As before, you can use your rented programs simultaneously on two computers — but now, one can be a Mac and one can be a Windows machine.

Finally, what you get by subscribing is a whole new version of Photoshop (and whatever other programs you use). And there’s no doubt about it: Adobe is introducing CC with a powerful, well-designed, polished suite.

Photoshop looks lovely. It’s still staggeringly complicated, but it’s about as well designed as any program with well over 500 menu commands can be. It requires a high-horsepower, newish computer (Mac OS X 10.7 or Windows 7 and later), but it opens faster than before.

The most talked-about new feature is Shake Reduction, which is intended to fix photos that were blurry because the camera moved slightly during the exposure. Shake Reduction can’t help pictures that are blurry because the subject was moving. And even in camera-shake pictures, it doesn’t always work well, or at all. But every now and then, it performs real magic.

Photoshop is now even more impressive when it comes to resizing an image. It’s much easier to shrink one — and amazingly good at enlarging, or “uprezzing” one. In essence, it creates pixels where none existed, turning (for example) a 2-megapixel photo into a 4-megapixel one, without degrading the image as much as you’d expect.

Other improvements are liberally sprinkled throughout. Sharpening an image works better, and so does the Liquify command (which lets you manipulate a photo as if it were printed on taffy). Features for editing 3-D models are now built right into the standard Photoshop version. You can save text styles so that they’re reusable across documents.

Photographers will love the fact that Camera Raw, the separate module that processes RAW files (huge, unprocessed photo files from a high-end camera), can now behave like a filter — you can apply any of its adjustments at any time, not just when you open the files.

In other words, the software improvements are welcome. The new pricing may not be.

Because Microsoft’s rental program is optional — you can still buy — the company has a steady incentive to sweeten the rental deal. And since it introduced Office 365 in March, Microsoft has added new goodies, features and software bits to its rental offering.

But Adobe isn’t offering the rental plan — it’s dictating it. The 800-pound gorilla of the creative world has become the 1,600-pound gorilla.

There are alternatives to Photoshop, of course. They include ACDSee, PaintShop Pro, Pixelmator and Adobe’s own easier-to-use but less powerful Photoshop Elements. (Elements and Lightroom remain buyable, by the way.)

But let’s face it: most professionals think they need Photoshop. So Adobe’s incentive to keep improving these programs isn’t exactly life or death. Nobody knows what improvements Adobe plans to add, how many, how often, or what the subscription rates will be next year or the year after that. Adobe is just saying, “Trust us.”

Whether you do or not, there’s no denying that the big picture has changed. From now on, you won’t just cut monthly checks for your mortgage, your electric bill and your cable TV. Now, you’ll be cutting one more — for your software.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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