Besides the small introduction, subscribers and consulting clients within this management domain have access to:
Use Info-Tech’s licensing best practices to avoid overspending on Adobe licensing and to remain compliant in case of audit.
"Adobe has designed and executed the most comprehensive evolution to the subscription model of pre-cloud software publishers with Creative Cloud. Adobe's release of Document Cloud (replacement for the Acrobat series of software) is the final nail in the coffin for legacy licensing for Adobe. Technology procurement functions have run out of time in which to act while they still retain leverage, with the exception of some late adopter organizations that were able to run on legacy versions (e.g. CS6) for the past five years. Procuring Adobe software is not the same game as it was just a few years ago. Adopt a comprehensive approach to understanding Adobe licensing, contract, and delivery models in order to accurately forecast your software needs, transact against the optimal purchase plan, and maximize negotiation leverage. "
Scott Bickley
Research Lead, Vendor Practice
Info-Tech Research Group
In 2011 Adobe took the strategic but radical move toward converting its legacy on-premises licensing to a cloud-based subscription model, in spite of material pushback from its customer base. While revenues initially dipped, Adobe’s resolve paid off; the transition is mostly complete and revenues have doubled. This was the first enterprise software offering to effect the transition to the cloud in a holistic manner. It now serves as a case study for those following suit, such as Microsoft, Autodesk, and Oracle.
Adobe elected to make this market pivot in a dramatic fashion, foregoing a gradual transition process. Enterprise clients were temporarily allowed to survive on legacy on-premises editions of Adobe software; however, as the Adobe Creative Cloud functionality was quickly enhanced and new applications were launched, customer capitulation to the new subscription model was assured.
Adobe is now leveraging the power of connected customers, the availability of massive data streams, and the ongoing digitalization trend globally to supplement the core Creative Cloud products with online services and analytics in the areas of Creative Cloud for content, Marketing Cloud for marketers, and Document Cloud for document management and workflows. This blueprint focuses on Adobe's Creative Cloud and Document Cloud solutions and the enterprise term license agreement (ETLA).
Beware of your contract being auto-renewed and getting locked into the quantities and product subset that you have in your current agreement. Determining the number of licenses you need is critical. If you overestimate, you're locked in for three years. If you underestimate, you have to pay a big premium in the true-up process.
Adobe estimates the total addressable market for creative and document cloud to be $21 billion. With no sign of growth slowing down, Adobe customers must learn how to work within the current design monopoly.
Source: Adobe, 2017
"Adobe is not only witnessing a steady increase in Creative Cloud subscriptions, but it also gained more visibility into customers’ product usage, which enables it to consistently push out software updates relevant to user needs. The company also successfully transformed its sales organization to support the recurring revenue model."
– Omid Razavi, Global Head of Success, ServiceNow
☑ Implement a user profile to assign licenses by version and limit expenditures. Alternatives can include existing legacy perpetual and Acrobat classic versions that may already be owned by the organization.
☑ Examine the suitability and/or dependency on Document Cloud functions, such as existing business workflows and e-signature integration.
☑ Involve stakeholders in the evaluation of alternate products for use cases where dependency on Acrobat-specific functionality is limited.
☑ Identify not just the installs and active use of the applications but also the depth and breadth of use across the various features so that the appropriate products can be selected.
Use Info-Tech’s Adobe toolkit to prepare for your new purchases or contract renewal
Info-Tech Insight
IT asset management (ITAM) and software asset management (SAM) are critical! An error made in a true-up can cost the organization for the remaining years of the ETLA. Info-Tech worked with one client that incurred a $600k error in the true-up that they were not able to recoup from Adobe.
Time and resource disruption to business if audited
Lost estimated synergies in M&A
Cost of new licensing
Cost of software audit, penalties, and back support
Lost resource allocation and time
Third party, legal/SAM partners
Cost of poor negotiation tactics
Lost discount percentage
Terms and conditions improved
Establish Licensing Requirements |
Evaluate Licensing Options |
Evaluate Agreement Options |
Purchase and Manage Licenses |
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Best-Practice Toolkit |
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Guided Implementations |
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Call 1-888-670-8889 or email GuidedImplementations@InfoTech.com for more information.
Complete these steps on your own, or call us to complete a guided implementation. A guided implementation is a series of 2-3 advisory calls that help you execute each phase of a project. They are included in most advisory memberships.
Guided Implementation 1: Managing Adobe Contracts Proposed Time to Completion: 3-6 weeks |
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Step 1.1: Establish Licensing Requirements Start with a kick-off call:
Then complete these activities…
With these tools & templates: Adobe ETLA Deployment Forecast |
Step 1.2: Determine Licensing Options Review findings with analyst:
Then complete these activities…
With these tools & templates: Adobe ETLA vs. VIP Pricing Table Adobe ETLA Forecasted Costs and Benefits |
Step 1.3: Purchase and Manage Licenses Review findings with analyst:
Then complete these activities…
With these tools & templates: Adobe ETLA Deployment Forecast |
Adobe’s move from a perpetual license to a per-user subscription model can be positive in some scenarios for organizations that experienced challenges with deployment, management of named users vs. devices, and license tracking.
Adobe has been systematically reducing discounts on ETLAs as they enter the second renewal cycle of the original three-year terms.
Adobe cloud services are being bundled with ETLAs with a mandate that companies that do not accept the services at the proposed cost have Adobe management’s approval to unbundle the deal, generally with no price relief.
The option for custom bundling of legacy Creative Suite component applications has been removed, effectively raising the price across the board for licensees that require more than two Adobe applications who must now purchase the full Creative Cloud suite.
Higher education/public education agreements have been revamped over the past couple of years, increasing prices for campus-wide agreements by double-digit percentages (~10-30%+). While they still receive an 80% discount over list price, IT departments in this industry are not prepared to absorb the budget increase.
Adobe has moved to an all-or-one bundle model. If you need more than two application products, you will likely need to purchase the full Creative Cloud suite. Therefore, it is important to focus on creating accurate user profiles to identify usage needs.
Use Info-Tech’s Adobe ETLA vs. VIP Pricing Table tool to compare ETLA costs against VIP costs.
Use Info-Tech’s ETLA Forecasted Costs and Benefits tool to forecast your ETLA costs and document benefits.
The subscription model forces customers to an annuity-based pricing model, so Adobe has recurring revenue from a subscription-based product. This increases customer lifetime value (CLTV) for Adobe while providing ongoing functionality updates that are not version/edition dependent.
Key Characteristics:
Adobe Digital Publishing Suite, Single Edition
Bundle Name |
Target Customer |
Included Applications |
Features |
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CC (for Individuals) |
Individual users |
The individual chooses |
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CC for Teams (CCT) |
Small to midsize organizations with a small number of Adobe users who are all within the same team |
Depends on your team’s requirements. You can select all applications or specific applications. |
Everything that CC (for individuals) does, plus
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CC for Enterprise (CCE) |
Large organizations with users who regularly use multiple Adobe products on multiple machines |
All applications including Adobe Stock for images and Adobe Enterprise Dashboard for managing user accounts |
Everything that CCT does, plus
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For further information on specific functionality differences, reference Adobe’s comparison table.
☑ True cloud products are typically service-based, scalable and elastic, shared resources, have usage metering, and rely upon internet technologies. Currently, Adobe’s Creative Cloud and Document Cloud products lack these characteristics. In fact, the core products are still downloaded and physically installed on endpoint devices, then anchored to the cloud provisioning system, where the software can be automatically updated and continuously verified for compliance by ensuring the subscription is active.
☑ Adobe Cloud allows Adobe to increase end-user productivity by releasing new features and products to market faster, but the customer will increase lock-in to the Adobe product suite. The fast-release approach poses a different challenge for IT departments, as they must prepare to test and support new functionality and ensure compatibility with endpoint devices.
☑ There are options at the enterprise level that enable IT to exert more granular control over new feature releases, but these are tied to the ETLA and the provided enterprise portal and are not available on other subscription plans. This is another mechanism by which Adobe has been able to spur ETLA adoption.
☑ Not all CIOs consider SaaS/subscription applications their first choice, but the Adobe’s dominant position in the content and document management marketplace is forcing the shift regardless. It is significant that Adobe bypassed the typical hybrid transition model by effectively disrupting the ability to continue with perpetual licensing without falling behind the functionality curve.
☑ VIP plans do allow for annual terms and payment, but you lose the price elasticity that comes with multi-year terms.
Download Info-Tech’s Adobe ETLA vs. VIP Pricing Table tool to compare ETLA costs against VIP costs.
Step 1: Make sure you have a software asset management (SAM) tool to determine Adobe installs and usage within your environment.
Step 2: Look at the current Adobe install base and usage. We recommend reviewing three months’ worth of reliable usage data to decide which users should have which licenses going forward.
Step 3: Understand the changes in Adobe packages for Creative Cloud (CC). Also, take into account that the license types are based on users, not devices.
Step 4: Identify those users who only need a single license for a single application (e.g. Photoshop, InDesign, Muse).
Step 5: Identify the users who require CC suites. Look at their usage of previous Adobe suites to get an idea of which CC suite they require. Did they have Design Suite Standard installed but only use one or two elements? This is a good way to ensure you do not overspend on Adobe licenses.
Download Info-Tech’s Adobe ETLA Deployment Forecast tool to track Adobe installs within your environment and to determine usage needs.
Most common purchasing models |
Points for consideration |
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"Customers are not even obliged to manage all the licenses themselves. The reseller partners have access to the cloud console and can manage licenses on behalf of their customers. Even better, they can seize cross and upsell opportunities and provide good insight into the environment. Additionally, Adobe itself provides optimization services."
– B-lay
The CLP and TLP are transactional agreements generally used for the purchase of perpetual licenses. For example, they could be used for making Acrobat purchases if Creative Suite products are purchased on the ETLA.
Source: “Adobe Buying Programs Comparison Guide for Commercial and Government Organizations”
The Value Incentive Plan is aimed at small- to medium-sized organizations with no minimum quantity required. However, there is limited flexibility to reduce licenses and limited price protection for future purchases. The ETLA is aimed at large organizations who wish to have new functionality as it comes out, license management portal, services, and security/IT control aspects.
Source: “Adobe Buying Programs Comparison Guide for Commercial and Government Organizations”
The Adobe ETLA’s rigid contract parameters, true-up process, and unique deployment/provisioning mechanisms give technology/IT procurement leaders fewer options to maximize cost-usage alignment and to streamline opex costs.
☑ No ETLA price book is publicly published; pricing is controlled by the Adobe enterprise sales team.
☑ Adobe's retail pricing is a good starting point for negotiating discounted pricing.
☑ ETLA commitments are usually for three years, and the lack of a true-down option increases the risk involved in overbuying licenses should the organization encounter a business downturn or adverse event.
☑ Pricing discounts are the highest at the initial ETLA signing for the upfront volume commitment. The true-up pricing is discounted from retail but still higher than the signing cost per license.
☑ Technical support is included in the ETLA.
☑ While purchases typically go through value-added resellers (VARs), procurement can negotiate directly with Adobe.
"For cloud products, it is less complex when it comes to purchasing and pricing. If larger quantities are purchased on a longer term, the discount may reach up to 15%. As soon as you enroll in the VIP program, you can control all your licenses from an ‘admin console’. Any updates or new functionalities are included in the original price. When the licenses expire, you may choose to renew your subscriptions or remove them. Partial renewal is also accepted. Of course, you can also re-negotiate your price if more subscriptions are added to your console."
– B-lay
INFO-TECH TIP: For further guidance on ETLAs and pricing, contact your Info-Tech representative to set up a call with an analyst.
Use Info-Tech’s Adobe ETLA Deployment Forecast tool to match licensees with Adobe product SKUs.
When adding a license, the true-up price will be prorated to 50% of the license cost for previous year’s usage plus 100% of the license cost for the next year. This back-charging adds up to 150% of the overall true-up license cost. In some rare cases, Adobe has provided an “unlimited” quantity for certain SKUs; these Unlimited ETLAs generally align with FTE counts and limit FTE increases to about 5%. Procurement must monitor and work with SAM/ITAM and stakeholder groups to restrain unnecessary growth during the term of an Unlimited ETLA to avoid the risk of cost escalation at renewal time.
Higher-education clients can license under the ETLA based on a prescribed number of user and classroom/lab devices and/or on a FTE basis. In these cases, the combination of Creative Cloud and Acrobat Pro volume must equal the FTE total, creating an enterprise footprint. FTE calculations establish the full-time faculty plus one-third of part-time faculty plus one-half of part-time staff.
Compliance takes a different form in terms of the ETLA true-up process. The completion of Adobe's transition to cloud-based licensing and verification has improved compliance rates via phone home telemetry such that pirated software is less available and more easily detected. Adobe has actually decommissioned its audit arm in the Americas and EMEA.
Determine License Entitlements
Obtain documentation from internal records and Adobe to track licenses and upgrades to determine what licenses you own and have the right to use.
Gather Deployment Information
Leverage a software asset management tool or process to determine what software is deployed and what is/is not being used.
Determine Effective License Position
Compare license entitlements with deployment data to uncover surpluses and deficits in licensing. Look for opportunities.
Plan Changes to License Position
Meet with IT stakeholders to discuss the enterprise license program (ELP), short- and long-term project plans, and budget allocation. Plan and document licensing requirements.
Option |
What is it? |
What’s included? |
For |
Term |
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CLP (Cumulative Licensing Program) |
10,000 plus points, support and maintenance optional |
Select Adobe perpetual desktop products |
Business |
2 years |
EA (Adobe Enterprise Agreement) |
100 licenses plus maintenance and support for eligible Adobe products |
All applications |
100+ users requirement |
3 years |
EEA (Adobe Enterprise Education Agreement) |
Creative Cloud enterprise agreement for education establishments |
Creative Cloud applications without services |
Education |
1 or 2 years |
ETLA (Enterprise Term License Agreement) |
Licensing program designed for Adobe’s top commercial, government, and education customers |
All Creative Cloud applications |
Large enterprise companies |
3 years |
K-12 – Enterprise Agreement |
Enterprise agreement for primary and secondary schools |
Creative Cloud applications without services |
Education |
1 year |
K-12 – School Site License |
Allows a school to install a Creative Cloud on up to 500 school-owned computers regardless of school size |
Creative Cloud applications without services |
Education |
1 year |
TLP (Transactional Licensing Program) |
Agreement for SMBs that want volume licensing bonuses |
Perpetual desktop products only |
Aimed at SMBs, but Enterprise customers can use the TLP for smaller requirements |
N/A |
Upgrade Plan |
Insurance program for software purchased under a perpetual license program such as CLP or TLP for Creative Cloud upgrade |
Dependent on the existing perpetual estate |
Anyone |
N/A |
VIP (Value Incentive Plan) |
VIP allows customers to purchase, deploy, and manage software through a term-based subscription license model |
Creative Cloud of teams |
Business, government, and education |
Adobe operates in its own niche in the creative space, and Adobe users have grown accustomed to their products, making switching very difficult.
Adobe has transitioned the vast majority of its software offerings to the cloud-based subscription model. Active management of licenses, software provisioning, and consumption of cloud services is now an ongoing job.
With the vendor lock-in process nearly complete via the transition to a SaaS subscription model, Adobe is raising prices on an annual basis. Advance planning and strategic use of the ETLA is key to avoid budget-breaking surprises.
Take Control of Microsoft Licensing and Optimize Spend
Create an Effective Plan to Implement IT Asset Management
Establish an Effective System of Internal IT Controls to Mitigate Risks
Optimize Software Asset Management
Take Control of Compliance Improvement to Conquer Every Audit
“Adobe Buying Programs: At-a-glance comparison guide for Commercial and government organizations.” Adobe Systems Incorporated, 2014. Web. 1 Feb. 2018.
“Adobe Buying Programs Comparison Guide for Commercial and Government Organizations.” Adobe Systems Incorporated, 2018. Web.
“Adobe Buying Programs Comparison Guide for Education.” Adobe Systems Incorporated, 2018. Web. 1 Feb 2018.
“Adobe Education Enterprise Agreement: Give your school access to the latest industry-leading creative tools.” Adobe Systems Incorporated, 2014. Web. 1 Feb. 2018.
“Adobe Enterprise Term License Agreement for commercial and government organizations.” Adobe Systems Incorporated, 2016. Web. 1 Feb. 2018.
Adobe Investor Presentation – October 2017. Adobe Systems Incorporated, 2017. Web. 1 Feb. 2018.
Cabral, Amanda. “Students react to end of UConn-Adobe contract.” The Daily Campus (Uconn), 5 April 2017. Web. 1 Feb. 2018.
de Veer, Patrick and Alecsandra Vintilescu. “Quick Guide to Adobe Licensing.” B-lay, Web. 1 Feb. 2018.
“Find the best program for your organization.” Adobe, Web. 1 Feb 2018.
Foxen, David. “Adobe Upgrade Simplified.” Snow Software, 7 Oct. 2016. Web.
Frazer, Bryant. “Adobe Stops Reporting Subscription Figures for Creative Cloud.” Studio Daily. Access Intelligence, LLC. 17 March 2016. Web.
“Give your students the power to create bright futures.” Adobe, Web. 1 Feb 2018.
Jones, Noah. “Adobe changes subscription prices, colleges forced to pay more.” BG Falcon Media. Bowling Green State University, 18 Feb. 2015. Web. 1 Feb. 2018.
Mansfield, Adam. “Is Your Organization Prepared for Adobe’s Enterprise Term License Agreements (ETLA)?” UpperEdge,30 April 2013. Web. 1 Feb. 2018.
Murray, Corey. “6 Things Every School Should Know About Adobe’s Move to Creative Cloud.” EdTech: Focus on K-12. CDW LLC, 10 June 2013. Web.
“Navigating an Adobe Software Audit: Tips for Emerging Unscathed.” Nitro, Web. 1 Feb. 2018.
Razavi, Omid. “Challenges of Traditional Software Companies Transitioning to SaaS.” Sand Hill, 12 May 2015. Web. 1 Feb. 2018.
Rivard, Ry. “Confusion in the Cloud.” Inside Higher Ed. 22 May 2013. Web. 1 Feb. 2018.
Sharwood, Simon. “Adobe stops software licence audits in Americas, Europe.” The Register. Situation Publishing. 12 Aug. 2016. Web. 1 Feb. 2018.
“Software Licensing Challenges Faced In The Cloud: How Can The Cloud Benefit You?” The ITAM Review. Enterprise Opinions Limited. 20 Nov. 2015. Web.
White, Stephen. “Understanding the Impacts of Adobe’s Cloud Strategy and Subscriptions Before Negotiating an ETLA.” Gartner, 22 Feb. 2016. Web.