Adobe CEO: Creative Cloud will be 'preferred way' of distribution

Adobe's Creative Cloud will become "the preferred way" to distribute software for the company and its customers, said CEO Shantanu Narayen.

Adobe CEO Shantanu Narayen said the company's new Creative Cloud effort---a software as a service subscription model for its Creative Suite 6---will ultimately be the preferred delivery for both the company and customers.

Narayen, speaking at the Robert Baird Growth Stock Conference Tuesday, outlined Adobe's transition to become a cloud company. He said that the Creative Cloud showed it could bring in new customers in a pilot in Australia. He expects the Creative Cloud---a Web-based roll up of Creative Suite 6---will bring in new customers and diminish piracy.

Specifically, 38 percent of Creative Cloud customers in Australia were new to Adobe and more than 75 percent of those people wouldn't have bought Creative Suite under a licensing model.

Adobe's Creative Suite 6 became generally available May 7 and the Creative Cloud will launch May 11.

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Despite Narayen's confidence that the cloud transition will occur seamlessly, he declined to put a timeline on it.

He said:

We have taken a very measured approach. We will offer perpetual (licensing) in order to enable people to experience the Creative Cloud offering and get comfortable with the amount of innovation that is happening.

So unlike other companies who have had to make business transformations, you can think of this as an augmentation of the business model rather than a complete left shift. So I think that could give you as investors and us comfort that we are doing this in a measured way.

We do think that the Creative Cloud with the new offerings that we have is certainly going to be long-term the preferred way, both for Adobe as well as for our customers.

What we tell investors is, if you believe that everybody is going to stay on the perpetual model, then you can look at CS6, which we think is one of the strongest releases we have released in a long time; and you should get comfort from the fact that people are going to want to upgrade to the new version. If you believe that the subscription offering is going to be a more compelling offering, then what that means is that over time we are certainly making our business more sticky. And we are attracting customers to our platform.