What does the accounting department say?

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Lately, you see a similar trend with 'standard' software. You don't buy software, but pay per year or month for its use. Don't need the software anymore? Then you stop paying. No more investments but a clear financial picture: if I use the software, it costs me so many euros per month. The difference with Software as a Service ( SaaS ) is not that big, by the way, here too you pay for the use, but with SaaS the software is on the servers of the supplier and you use it via a browser.

What is standard software?
For this article, I will define standard software as: software for a large group of users that is sold 'as-is'. Think of an Office package or a video editing program. Even though you buy the software, we have never owned the software. Anyone who reads the fine print (and who does?) will see that we only have the right of use for ' perpetual use ', not the right of ownership.

Microsoft and Adobe
Both Microsoft with Office 365 and Adobe with Creative Cloud are examples of this business model innovation: instead of buying the software, you pay for using it. Does that matter? No, it is the same software and you can do the same things with it. In fact: if you pay monthly or annually, you always have the latest version.

However, it is a big step for software developers to move to this new business model. There are quite a few questions:

Do customers want this?

What about distributors and resellers who sell the software?
You need to take all these things into account if you want to make the step from product to service.

What does the business model look like?
In principle, the (generic) business model of a supplier of standard software looks quite simple. The income comes from the sale of software (new versions and updates) and possibly support contracts. The costs are development, personnel, marketing and housing costs. If we put this in Ostenwalder's Business Model Canvas, you get the following picture:

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Let's take a look at how Adobe and Microsoft are offering their products in this new business model.


The products in Adobe's Creative Cloud

Case 1: Adobe Creative Suite
Adobe is known to the general public for jamaica phone data Acrobat and the PDF Reader, but among design professionals it is of course also known for Photoshop and the Creative Suite of multimedia editing programs.

They are gradually moving from the business model ' perpetual license ' to a membership model where you pay for the software per month or year. The sale of physical software packages is stopped (the stock is used up) and for the CS6 suite that was introduced in 2012 and can be downloaded, no more feature upgrades are made, the software is still supported and kept working for the next OS versions that are released.

It is striking that Adobe talks about a membership instead of renting software. They see the Creative Cloud users as a community. Through the integration with Behance, the network for creatives, and the provision of short video trainings, the community idea is further shaped. With this you can get to grips with the new functionality.