The meter’s on all the time: Tech’s ‘greed is good’ era arrives

Adobe Systems is forcing its Creative Suite users to pay a monthly subscription of $50 to $70 for what it is calling Creative Cloud; you’ll pay $80 per month if you don’t sign a one-year commitment. There’ll soon no longer be a version you can buy once and use forever, as the version 6 Creative Suite will be available only for an unspecified time. Along the same lines, Microsoft says it won’t guarantee that Office will always be available in the traditional one-time-purchase license, and it’s clear that Office 2013 is the transition step to a subscription-only model like Adobe’s. Expect every major software publisher to do the same in the next few years.

Meanwhile, Internet service providers — both wired broadband and cellular — have already shifted to tiered data plans, which in effect make all cloud services, from Google Apps to Facebook to Netflix, metered services. You’ve probably already received a “courtesy notice” from your home broadband provider that you’ve exceeded or come close to exceeding a cap you never knew existed and suggesting you buy a higher-tier plan.

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The taxi-meter model will be devastating, raising the cost of computing at all levels, whether you use local apps, cloud services, or a mix. In fact, the way things are going, you’ll often pay twice to access content or apps: once for the subscription and once for the transmission. That’s just wrong.

I need to be clear that metered broadband access and metered application usage are not the same thing. What they have in common is a rapacious business model.

Broadband metering: A rigged system Broadband is a limited resource, especially cellular broadband, so unlimited usage models are unrealistic.

But as I’ve previously shown, the carriers’ pricing structures aren’t about penalizing wasteful use. Rather, the intention is to charge as much as possible in an essentially duopoly business. The big threat to the cable/phone company duopoly is Internet-based video, and they’re killing that competition through data caps they don’t apply to their own video offerings. In other words, if you watch videos on Netflix or Amazon, you pay for the data transmission on top of the subscription fees; if you watch the cable or telco videos, you pay for just the subscription, even though it all comes over the same broadband. The game is rigged.

The issue for broadband is how to have fair metering. The answer is a combination of progressive rates, rather than the current regressive ones, and plans that cover all devices. The last is important because carriers see each device you have as a way to force a high-priced plan in which you use far less data than you are ostensibly buying. As you use more devices, you both pay more and waste more money. It’s great for them, but unsustainable for most people.

I’m not holding my breath for fairness. Instead, I expect the metering to increase, and that will lead to users self-rationing the services they use, with bandwidth-intensive services like video and music streaming, conferencing, and VDI/desktop-as-a-service especially vulnerable.

Providers need to prepare for this coming parsimony by throttling back how much data they transmit. Google Apps, Office Web Apps, iCloud, SkyDrive, Box, Dropbox, and the like may need to rely more on local storage and access at the device level, with less-frequent syncing to the server and more compact deltas (change files) being synced. (Maybe this is why Google is experimenting becoming an ISP with Google Fiber.) Businesses will soon have to pay a real price when insisting, in the name of security, that users be forbidden from working on data locally but instead must work over the Internet with constant data flow.

The bottom line is that data-metering costs will force users, IT, and developers alike to make hard decisions.

App metering: A nonsensical licensing model For applications like Creative Suite and Office, there is no justification for metering. There is no capacity issue; after all the software runs locally on your computer. It’s like trying to charge people each time they read a book they bought, each time they play an album they bought, or each time they watch a DVD they bought. No wonder Creative Suite users are angry!

No, the reason for converting app into rented, pretend services is to gouge customers. Remember: Adobe’s Creative Cloud suite is not a collection of software-as-a-service (SaaS) apps like Google Apps — it’s software you download onto your PC or Mac and run locally. It’s not a service as the “cloud” label might suggest.

The software model used to be that you bought a license and upgraded to a new version every version or two because of compelling new capabilities. That worked well from the 1990s into the early 2000s, when upgrades were often compellingly useful. Software makers could count on a large majority of us upgrading at least every other version, providing an ongoing stream of income — an uneven stream, but a stream nonetheless.

But it’s been years since Microsoft and Adobe have offered compelling new functionality worth the big money they charge for old tools like Office (Word, Excel, PowerPoint, and Outlook and/or OneNote) and Creative Suite (Photoshop, Illustrator, InDesign, Dreamweaver, Acrobat Pro, and others).

Adobe has been particularly hard hit, as most designers stopped upgrading three or four versions ago for lack of utility in suites whose upgrades are $600 or more — and much more if you don’t upgrade each new version as it arrives every 18 to 24 months. The new Creative Cloud subscription model is Adobe’s way of forcing users to pay for upgrades they would not otherwise buy.

That becomes clear when you do the math: In most scenarios, the cloud version costs more over a three-year or longer period. If you are a first-time Creative Suite buyer (there are a few) or someone who has not upgraded in several versions — either way, you pay the full price for the current version 6 — then sometimes the Creative Cloud option is slightly cheaper in the first three years, but gets costlier after that.

It’s a punitive business decision from a company whose products are essentially completed and don’t warrant multi-hundred-dollar upgrade fees.

I fully expect most users to stick with version 4 or 5, the last justifiable upgrades. Some may upgrade to version 6 — the current and last one-time-license version — to have a version likely to work well on future versions of OS X and Windows.

You can see why Microsoft declines to rule out a similar future for Office, as it too has been bereft of meaningful new changes for several versions.

If you work in IT, you know that Microsoft has largely converted businesses to the subscription model through its Software Assurance scheme. Why large businesses think it makes sense to keep paying every year for each user’s Office license is beyond me, but their foolishness clearly gives software vendors hope that individual consumers and small businesses can be similarly duped or even strong-armed through lack of choice.

This article, “The meter’s on all the time: Tech’s ‘greed is good’ era arrives,” was originally published at InfoWorld.com. Read more of Galen Gruman’s Smart User blog. For the latest business technology news, follow InfoWorld.com on Twitter.