In 2013, Adobe introduced Creative Cloud licensing for volume purchase customers. There are multiple licensing plans available to both academic and business customers (see sidebar). It is very easy to spend more than you need to on subscription licenses, just like with any other software license. Let’s take a look at how to avoid spending too much on these license plans.
Compliance is Not Always Automatic
Nearly every day I encounter the misconception that subscription licensing plans, like the various license programs for Adobe Creative Cloud, inherently remove the obligation to manage license compliance. For certain Adobe license models, like Creative Cloud for Teams (Named user licensing), this may be true. However, license compliance is still an obligation under Adobe’s Creative Cloud for Enterprise (FTE licensing) which calls for annual audits and “true-ups”. And in all cases, regardless of the specifics of technology and licensing terms, managing software assets for efficient deployment, utilization, and cost reduction will pay big dividends back to your organization.
Adobe’s Value Incentive Plan (VIP), which is a licensing program for named user and device licenses, promises that you can “See which products have been… deployed. And relax with automatic compliance.” But no such promise is made for Adobe’s Enterprise Term License Agreement (ETLA) which covers FTE-based licensing for the complete set of Creative Cloud applications, the Acrobat family products, and others.
Under Adobe’s ETLA for FTE-based licensing, software packaging and deployment is “pre-activated so that once placed on the destination machine, there will be no need for the product to periodically connect with Adobe (‘phone home’) to renew its activation status, as it does for named user installations like CC for individuals and Teams. This type of packaging and deployment, under the ETLA agreement, is known as Anonymous (or machine-based deployment).” Using Creative Cloud Packager (CCP) for “Anonymous deployment”, it is easy to mistakenly deploy more copies than your organization is licensed for, and then suffer a financial penalty later for over-deployment.
Software Cost Control
The new priority for software asset managers under cloud licensing is cost control. One of the great advantages of subscription software licensing is that the initial entry costs are reduced. But its greatest detractor is that, if not well managed, total cost of ownership can become a runaway train, driving costs much higher than perpetual licensing plans. Recurring subscription fees can mount up to significantly increase total software costs over the years.
Let’s look at three ways that a customer can fail to optimize costs. They are: purchasing the wrong licensing plan, over estimating the demand, and deployment beyond licensed limits.
1. The Purchase Decision
– What licensing plan to buy, and with which options.
How many times have you met with a software sales person and answered questions about the size of your organization – and then listened while the sales person recommended licensing levels higher than you anticipated? Were you prepared with real data to show that the demand is actually much lower than the proposed licensing levels?
Now imagine that your conversation with the sales person is for a new software product, like Adobe Creative Cloud, where there is no historical usage data available. For most new product versions, the solution is to measure demand for the previous version. In the case of Adobe CC, that would mean tracking usage with K2-KeyServer for CS6, CS5.5, and CS5 product editions. Even if you don’t have historical usage data, there are still some general tips that will be helpful to keep in mind during the initial purchase. For all licensing plans, it is important to weigh the benefits of initially buying small and then adding licenses as needed vs. seeking a discounted price for a larger volume than is initially needed.
Many times I’ve seen customers buy-in to a new plan at the same licensing level as they had for a previous version and then discover that user adoption drags on for two or three years – this is an expensive lesson to learn. The amount of overspend when buying software before it is actually needed will typically be higher for a subscription license than the comparable cost for a perpetual license averaged over several years. Of course cash flow issues, the possibility of quantity discounts, and the uncertainty of predicting future costs makes this analysis incomplete. But under any licensing model, there is a real risk of significant waste when neither historical nor current usage information is available. Adoption rates for new software are often way below expectations. My advice: use K2-KeyServer histogram reports to understand your historical adoption rates and then buy into new licensing plans in stages while monitoring actual usage.
How many Users will Adopt the complete set of Creative Cloud applications?
Consider the following example: In an informal five-month study, one customer used Sassafras K2 after their purchase to analyze the value they received from the Creative Cloud for Enterprise licensing plan. Their FTE agreement gave them licensing rights for Creative Cloud on 100% of their 1,200 computers. However, only 521 of the 1200 computers actually used anything other than Acrobat Pro. And of the 322 computers that used only Acrobat Pro, it is likely that many did not use the authoring/editing capabilities. So Acrobat Reader, which is licensed for free, would have been completely adequate.
So what alternate purchasing options should be considered when it comes time to renew? While an unnecessarily expensive option may have been chosen under the initial agreement period, the knowledge gained from measuring actual usage will inform the negotiations when it comes time to renew. If the academic customer were able to persuade Adobe to extend device licensing to computers outside of labs and classrooms, then perhaps drop the FTE agreement and purchase device licenses for the full CC (maybe 550+/-, giving room to grow) along with some licenses for Acrobat Pro (probably less than 322).
If Named-user licensing was available in quantities of greater than 150, the VIP licensing plan for “Teams” might be a good choice. (Named-user licensing in higher numbers may be a high probability if Adobe is successful in their hopes of releasing support for Single Sign-On authentication (SSO) via SAML 2.0. More on that sometime in the future.) But possibly the best alternative to cover this use-case now (given current licensing programs) is a 50% FTE based plan for Creative Cloud applications. Since Adobe’s FTE plans typically include rights to Acrobat Pro for all computers, the 50% FTE for CC would provide 100% coverage for Acrobat.
My advice: take the time to do your best analysis before you buy, and then customize a licensing plan that will fit your requirements most effectively.
2. Usage Tracking – avoiding “Shelfware”
– How to optimize usage to squeeze the most value out of your plan.
Adobe advises that under the VIP licensing plan for “Teams”, you can “See which products have been purchased and which ones have been deployed. Get instant access to upgrades. And relax with automatic compliance.”
While this is reassuring to customers to know that they’re not going to suffer through a compliance audit and associated fines, it comes with a price. Software overspending becomes more common because it is harder to identify. Deployment tools tell us only where the software is installed, not where and how often it is used. This leaves procurement staff to count up the number of deployments and continue purchasing annual subscriptions for them – even for those installations that remain unused.
In my article on License Optimization and Software Cost Reduction, I refer to the flaw in the mantra that tells us “If it is installed, I need a license for it”. When we never go beyond this mantra with an analysis of what is needed and being used, we pay a steep price. A common weakness with software systems that self-manage compliance is that they give us no information on actual usage and demand.
Turn the model around – purchase to meet usage demand
Under all of the Creative Cloud licensing plans, “Shelfware” (unused software licenses) is a very real possibility. To avoid overspending, we must turn the model around – instead of buying licenses to cover installed software, we must manage installed software to meet usage demand.
Sassafras K2 is an exceptionally efficient usage tracking solution. One customer, echoing the comments of many K2 users over the years, recently wrote: “Before we started using K2, our annual numbers were just a guess. Now, with K2’s reports, we save money.”
3. The “True-up” Experience and Contract Renewal
– Over-deployment bites us in the wallet.
It’s going to happen. It’s looming on the horizon out there with your scheduled annual “true-up” commitment. And the better you prepare for it now, the easier – and less expensive – the experience will be when you get there. This cost control advisory is targeted toward the Academic Licensing Plans for Device licensing and Enterprise licensing, and the Business licensing plan, ETLA, covering Creative Cloud for enterprise.
The first thing to understand about contract renewal and the true-up experience under Adobe Creative Cloud is that Adobe appears to have replaced the punitive compliance audit experience with a more amicable plan to count the deployments (‘true-up’) and pay the difference. Still, even under this more friendly approach, your deployment mistakes or slack management are going to cost your organization some money.
On the Education Enterprise Term License Agreement (ETLA) page, Adobe advises; “Keep track of software installations each year and consolidate all your deployments into one annual purchase order.” And so each year – during the year – you might get by with ‘eating all you want’ but when you get to the end of the year you will pay the bill for your indiscretions (over-deployments).
Sassafras K2 provides a convenient way to follow Adobe’s advice and keep track of deployments vs. purchased entitlements. K2’s web-based Dashboard continually reports hundreds of performance indicators, including estimated liabilities and estimated overspend, to give you an early warning system that helps avoid unnecessary true-up penalties.
There is also a second way that the annual true-up experience can cost your organization more than necessary. Every week I work with customers who have signed an ETLA agreement that covers their entire organization. But within their computing ecosystem there are some computers that have certain software funded under external grants, or BYOD machines with a mix of institutionally licensed and personally licensed software.
When those computers contain Adobe Creative Cloud software that is licensed under a separate licensing plan (common, especially in academic and research organizations), even a detailed audit can not separate them from the machines covered by the ETLA. To address this potentially expensive issue, K2-KeyServer collects and reports the unique serialization of the separately licensed instances – so your organization won’t mistakenly also pay for those installations under your enterprise agreement.
Do you want to Reduce Software Costs?
Sassafras K2 users have been saving money on software purchases for 25 years. Through the years, every customer who has reported return-on-investment results for software cost reduction has told us that they have recouped the cost of K2 in the first months. Most have gone on to multiply the value in the first year and continued to save more year after year.
If you are facing a potentially high-cost software contract or renewal – whether it is Creative Cloud subscription licensing, or perpetual – now is the time to take action. Sassafras will help you to do the analysis now that will empower you to make the best decisions for software cost reduction now and into the future. Sassafras K2 can provide you with exceptionally detailed analysis, and it is backed by a team of internationally recognized software licensing professionals.