Feeds

Adobe feeling drained by new model, but hopes things will improve

No going back to boxy bust'n'boom

Application security programs and practises

Adobe's second quarter net income eased on poor European demand as well as its move to take Creative Suite into the cloud.

Net income eased 2.4 per cent to $223.8m from $229.4m in the same quarter of last year. Adobe also said that it was cutting its revenue growth estimate for the full year, blaming the economic crisis in Europe.

"For the full year, we are narrowing our annual revenue growth target to a range of 6 per cent to 7 per cent to reflect the current European economic conditions," CEO Mark Garrett said in an earnings call.

The company's ever-popular editing software was updated to a new version in the second quarter of this year, which usually gives its sales a lovely boost, but Adobe is getting its money from Creative Suite 6 in a cloudy fashion.

The software suite – which includes arty tools like Illustrator, InDesign, Dreamweaver and Photoshop – has been shoe-horned into a web-based subscription model, instead of being available to punters via a one-off hefty price tag, cutting into Adobe's sales figures.

Designers and editors are now in Adobe's Creative Cloud, where they subscribe to rent software with the added benefit of online storage and frequent updates. Adobe wants to move to subscriptions for its software so it can have more consistent revenue and income, rather than peaking and troughing with new releases.

While the strategy may be making Adobe look bad at the moment, there are signs it could work long term. Garrett said that the firm now has 90,000 paid subscriptions, with 75 per cent of those electing to pay annually rather than month-to-month, suggesting a higher level of commitment to the service.

"We are building a healthy pipeline for potential Creative Cloud paid subscribers through marketing programmes, trial downloads and free memberships. Currently, we are adding more than 5,000 total net paid subscriptions per week," he added.

Despite long-term optimism for Creative Cloud, Adobe is forecasting sales to be less in the third quarter, although it's also blaming Europe's weak demand for that.

Revenue in the second quarter was $1.12bn, hitting or narrowly missing many analyst expectations and up slightly from the same quarter last year, which saw revenue of $1.02bn.

Shares in Adobe fell in after-hours trading following the earnings announcement. ®

Bridging the IT gap between rising business demands and ageing tools

More from The Register

next story
Apple fanbois SCREAM as update BRICKS their Macbook Airs
Ragegasm spills over as firmware upgrade kills machines
Auntie remains MYSTIFIED by that weekend BBC iPlayer and website outage
Still doing 'forensics' on the caching layer – Beeb digi wonk
Attack of the clones: Oracle's latest Red Hat Linux lookalike arrives
Oracle's Linux boss says Larry's Linux isn't just for Oracle apps anymore
THUD! WD plonks down SIX TERABYTE 'consumer NAS' fatboy
Now that's a LOT of porn or pirated movies. Or, you know, other consumer stuff
EU's top data cops to meet Google, Microsoft et al over 'right to be forgotten'
Plan to hammer out 'coherent' guidelines. Good luck chaps!
US judge: YES, cops or feds so can slurp an ENTIRE Gmail account
Crooks don't have folders labelled 'drug records', opines NY beak
Manic malware Mayhem spreads through Linux, FreeBSD web servers
And how Google could cripple infection rate in a second
prev story

Whitepapers

Top three mobile application threats
Prevent sensitive data leakage over insecure channels or stolen mobile devices.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.