The answer: It depends!!
What is Creative Cloud?
Let’s understand what Adobe is offering under its new product Creative Cloud. Creative Cloud is a membership service giving you access to all of the following applications: Photoshop, Illustrator, InDesign, Muse, Acrobat X Pro, Flash Professional, Flash Builder, Dreamweaver, Edge Preview, Fireworks, Adobe Premiere Pro, After Effects, Adobe Audition, SpeedGrade, Adobe Prelude, Encore, Bridge, Media Encoder, Business Catalyst, Typekit, Story Plus. Really.... you get access to all of that for the $49.99/mo subscription price! Plus you automatically get all of the upgrades to the applications as they are released as well as access to 20GB of cloud based storage and syncing. It sounds fabulous! But is it worth it?
Here’s Adobe’s pricing as of 7/21/12:
Let’s look at the total cost of Creative Suite Standard CS6 vs. a subscription to Creative Cloud. For this analysis I am using today’s prices, so it’s not going to be completely accurate, but it will give you good direction. We know the subscription to Creative Cloud is about $600/yr. But what is the annual cost of Creative Suite Standard per year?
If you like to stay up to date and upgrade every year, here’s your total cost:
$1299 initial purchase + $549/yr upgrades, then
- after two years, your per year cost is $924 (($1299 + $549)/2 years),
- after three years, your per year cost is $799 (($1299 + $549 + $549)/3 years), and
- after four years, your per year cost is $737 each year (($1299 + ($549x3))/4 years).
In fact, it takes FIFTEEN years before your overall costs will be $600/yr.
(When evaluating annual upgrade costs, I chose to use the $549 cost instead of the $275 because it is unlikely that upgrade costs will be $275 every year as it seems that $275 is a one-time thing for CS5.5 only. In addition, Adobe tends to incentivize the annual upgrader by offering a lower price for those who own the most recent version, hence I did not use $699 since $699 is used for upgrading from versions at least two versions displaced. Of course, the analysis assumes that the upgrade costs do not vary from year to year. This analysis also assumes Adobe outputs a new version every 12 months.)
Now, let’s say you upgrade every two years instead of every year. In that case, you would pay $1299 up front and $699 every other year thereafter. After four years (initial purchase plus one upgrade), you will have spent about $2000 = $500/year.
Conclusion: Considering the entire costs of the software package, if you upgrade every year, it is cost effective to get the Creative Cloud membership. If you upgrade every other year, though, you will experience cost savings over Creative Cloud by purchasing Creative Suite Standard outright.
(Why did I choose 4 years as the timespan for my evaluations? Because that time period is relevant for the biennial upgrader who will have purchased the program and one upgrade.)
But what if you’ve made the investment in Creative Suite a year or two (or more) ago, and now you’re deciding which way to go in terms of general cash-flow? Let’s do the analysis again, but let’s take the initial purchase cost out of it since the investment has already been made. We’ll just look at upgrade costs vs. subscription costs.
If you are upgrading annually, we’ll assume the cost stays at $549. You save $50 a year over the $600 Creative Cloud subscription. You have to decide if that $50/year is worth saving or worth spending to get all of the benefits Creative Cloud offers (access to all of the applications, regular upgrades, access to 20GB cloud storage).
But if you are only upgrading biennially at $699, you will be spending upgrade fees of about $350 annually. So when compared to the Creative Cloud membership of $600/year, you would be saving $250/year.
Conclusion: When looking only at upgrade costs for cash-flow, if you like to upgrade annually, even though it’s an additional $50, it may still be worth it for the Creative Cloud subscription for all the extras, even if you just use one additional app or the cloud storage. However, if you only upgrade biennially, while you won’t get the upgrades as quickly, you will be saving a good chunk of cash if you buy outright.
What if you don’t have Creative Suite, but have purchased either Photoshop or Illustrator individually? Should you subscribe to the individual program?
Overall cost with annual upgrades
If you only own Photoshop and you upgrade annually your cost per year over four years will be about $325/yr (($699 initial price + three years of upgrade costs)/4 years). In contrast, annual subscription fees will be $240/year, so over four years, you are better off buying the subscription. Illustrator will also be better by subscription (($599 initial price + (3x$249))/4years).
Overall cost with biennial upgrades
If you only upgrade every two years, your price/year over four years for Photoshop will be $225 (($699 initial cost + $199 upgrade)/4 years), so you’ll be slightly better off buying outright. With Illustrator, your price/year over four years will be about $212 (($599 initial cost + $249 upgrade)/4 years), so again, buying outright is the way to go.
Overall cost of both programs
Now if you buy both Photoshop and Illustrator individually (you don’t need or want the entire Creative Suite Standard package), your per year cost over 4 years is $662/yr ((($699 + $599 initial cost)+(($199+$249)x3))/4 years). You are better off with with the annual subscriptions to both applications ($480/yr) or even the Creative Cloud membership ($600/yr). If you only upgrade biennially, your per year cost over 4 years is $437 ((($699 + $599 initial cost) + ($199+$249 upgrade))/4 years)... so better to buy outright and upgrade.
Conclusion: If you upgrade annually, subscriptions are the better deal. But if you are a biennial upgrader, stick with buying the program outright... the overall costs are lower.
Now let’s assume you have already made the investment in the programs and are just trying to figure out the better deal for cash-flow. Taking the initial purchase price out of the equation, a subscription for each individual program will cost you $240/year. Upgrade costs for Photoshop are $200/year and for Illustrator are $250/year. So the subscription for Illustrator is the better deal (but not for Photoshop).
If you are only looking at upgrades vs. subscription of both applications combined and take the initial purchase price out, your annual upgrade cost will be $450, so you are better off buying outright with annual upgrades.
Conclusion: Looking at upgrade price vs. subscriptions for cash-flow, for the annual upgrader, the Illustrator subscription has a slight edge over outright purchase, but the biennial upgrader should buy outright.
If you are at all considering the Creative Cloud membership, through August, Adobe is offering Creative Cloud incentive pricing for current Creative Suite users (CS3 and above): $29.99/mo (with annual commitment) for your first year. That’s only $360 for your first year!