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Lewnes’ mandate at Adobe was to transform marketing and use it to drive the business forward. Risk is “how you stay alive” in technology and other industries, she says.Īdobe’s leadership team applied the concept of disruptive innovation (as coined by thought leader Clayton Christensen), to envision a new, broader role as a global digital solutions company that would fuel digital experiences for its customers – from individuals to global brands alike. “We had a thirst for massive change and risk,” recalled Lewnes about the early days of the transformation. Today, that collection of products is known as the Adobe Experience Cloud, a set of best-in-class solutions for marketing, analytics, advertising and commerce. The company foresaw that content creation was becoming only the first step in the content lifecycle the ability to analyze, manage, deploy and optimize that content would become essential to its customers’ future success. In parallel to its subscription transformation, Adobe was creating and leading a new business category, known today as digital experience.
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They are credited today as the industry role model for how to successfully pivot a business model with seamless execution.
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Despite the mainstream nature of subscription models today, at the time Adobe was among a small group of industry leaders who saw the value in moving from one-and-done software purchases to a business model with predictable revenue, more technology innovation and the ability to use data to drive customer understanding and interactions. The model moved from 18-month launch cycles to ongoing launches as soon as an innovation was ready to go, and from product pricing ranging from $1,300 to $2,600 to subscription-based pricing that is $9.99 for a single product and $52.99 for all apps in the Creative Cloud. These factors contributed to Adobe’s decision to transform its Creative Suite business from a boxed-licensed software model to a monthly cloud-based subscription model, culminating in the launch of Adobe Creative Cloud. As a result, the company saw spikes in revenue every 18 months, but a less predictable revenue stream in interim periods. Furthermore, Adobe’s innovative engineers were developing new product features all the time but had to wait 18 months – the cadence of Adobe’s launch cycles at the time – to release them to the world. Adobe’s creative business was not growing to encompass the new and different ways people were starting to create.
Everyone in the world has a creative spark, a story to tell and the means to tell those stories through new mediums, formats and devices was becoming increasingly vast. Firstly, creativity was exploding everywhere. Although Adobe was a successful technology company in creative and document services with flagship products and a beloved brand, CEO Shantanu Narayen and his leadership team saw a tremendous opportunity to grow the business. Lewnes learned everything she knows about marketing under the leadership of mentor Dennis Carter and CEO Andy Grove. She was part of the team that managed the highly successful “Intel Inside” program and oversaw groundbreaking campaigns, including the launches of the Pentium and Centrino processor brands. Lewnes joined Adobe after a 20-year tenure at Intel, where she helped build global demand for the Intel brand from consumers, business professionals and key computer channels. Recently, we had the privilege of interviewing Adobe CMO Ann Lewnes about the role of marketing in this transition. While ever-present today in 2018, this was not the case in 2013 when Adobe made a then-radical pivot to a subscription model. ISV leaders know that an astounding 84% of net new software is now being delivered as Software as a Service (SaaS).
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However, many independent software vendors (ISVs) have now pivoted to a subscription-based model to meet increased market demands for great functionality, free trials and seamless onboarding, providing OpEx pricing that’s predictable and easier on corporate and individual budgets.
Zuora CEO Tien Tzuo was the first to coin (and trademark) the term “The Subscription Economy,” to describe the trend of buying and using digital products and services on a pay-as-you-go (or grow) model.
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