As we watch organizations like IBM, HP and EMC struggle to
transform, Adobe is an interesting contrasting case. It went from
selling boxed software to a cloud subscription model in shorter
order, and judging from its financial report that came out
last week, it’s done quite well making that leap.
First, let’s have a look at the numbers. Adobe reported a record
$1.31 billion in revenue for the quarter, a 22 percent year over
year increase. It disclosed record annual revenue of $4.8
billion. Mind you these are significant, but the big number to me
is that recurring revenue from subscriptions now represents 74
percent of Adobe’s business. What’s more, just under $3 billion
in revenue in 2015 came from digital media-related annual
recurring revenue (ARR).
Adobe is making this switch to subscription pricing look easy. It’s not.