Decision Sheet

Problem Statement:
The CEO and President of Adobe Systems Incorporated (Adobe), Shantanu Narayen
knows that the Bloomberg journalist would ask if Adobe had plans to reverse the decision
of implementing Creative Cloud or not.

Case Analysis:

Adobe Systems Incorporated (Adobe) which was started in 1982 was a market leader in
PC software market with products like Adobe’s PDF Reader, Photoshop and many more.
They used a perpetual license product for its Creative Service(CS) business, which
allowed customers to purchase and use Adobe’s creative products for an indefinite period
of time. Consequently Adobe’s revenues were cyclical, driven by major product or suite
launches(or updates), which typically occurred every 12 to 24 months. The company has
lost around $1 billion in piracy and also the company was not growing when compared to
growth of the usage of various applications like Photoshop. So the company decided to
start a new Digital Marketing business unit in 2009 that offered chief marketing officers a
comprehensive solution to optimize digital advertising and marketing campaign. By 2012
they have generated over $1 billion in revenue. In 2012 the company launched Creative
Cloud(CC) service for selling the software. CC is a cloud version which will provide
consumers with a bundle of various software with a monthly subscription fee and
completely closed the old CS version in May,2013. The CC bought by the company is
facing lot of criticism from the customers due to various reasons.

Recommendations:
● The company is facing a lot of criticism from the customers saying that even after
paying they can’t feel as owner of the software which was not the case in CS. The
company should think about running both CS and CC pattern together to minimize
the customers from switching to different competitors. The company would various
issues in product development for both at the same time but for retaining the
customer base this is a good option and for reducing the piracy the company
should take more serious measures with the customers who are doing so.

● The message the company wants to give was understood by just 5,000 people
who were present at MAX, as they were able to understand the end-to-end story
and what the company wants to do.There is also a lot of misunderstanding about
CC among various different customers. The company must start a campaign drive
in which the company clearly states the problem for which they are shifting to CC
and all the benefits of CC to the customers.

● The company expected that CC would attract 800,000 new subscribers by 2015,
and was very close to the target in just 1 year of launch in 2013 that means the
Package offered by the company was hugely accepted by the customers overall.
Moreover, the company would be able to generate more revenue from CC model
and it would also not be cyclical.So the company should not close down the cloud
based method of selling as they are able to attract a lot of new customers and also
the new generation is more familiar with it.

● After the introduction of CC freelancers and small business owners are finding it
expensive as they are not using all the software and also after paying on a regular
basis they can’t be the owner of the software. The company can try and give
subscription based model with smaller bundles which can be customised and also
a way in which the business can retain all the previous data even though he is not
subscribing on a regular basis.