By introducing its “Creative Cloud” offering, Adobe is changing the software license roadmap for a very large group of individual consumers, enterprise purchasers, and IT/software asset managers. While the shift to a subscription-based model is likely to make compliance with Adobe’s Ts & Cs a bit easier, there are other areas worth a closer look.

Let’s be clear: in spite of its name, Creative Cloud is not a pure play cloud offering. Unlike Salesforce and other true cloud products, Creative Cloud is downloaded, installed, and executed on the desktop just as an electronic download or boxed software purchase would be. In these ways, Creative Cloud is more like a traditional on-premises offering.

The term “cloud-based” can imply so many things, it’s difficult to infer exactly want is meant when the term is used. For example, it can mean that the entire product hosted in the cloud, that data resides in—or is accessed via—the cloud or that some aspect of product functionality is controlled, at least in part, by one or more components that reside in the cloud. Taking these many potential definitions into account, it’s fairly certain that Adobe’s use of the “cloud” label has more to do with glamor by association (or we could call it, “marketing”) than with the intrinsic qualities of the product itself.

What “cloud” means in Adobe’s instance is that the provisioning and consumption of licenses are controlled from the cloud.  No subscription means no product use, and renewals must be made on an annual basis.  Farewell to the perpetual license.

It makes eminent business sense that Adobe has embraced the subscription licensing model, much loved by investors and corporate finance departments for its promise of steady, recurring revenues.  No wonder that, a year after the launch of its $50-per-month licensing model, the company has announced this is now the only way to license Creative Suite.

Adobe claims that most users are enthusiastic about the switch, and in the case of enterprise customers, this claim has a ring of truth to it: controlling licenses from the cloud alleviates the responsibility of ensuring each copy of installed software is properly licensed.  For the most part, individual consumers are also, if not enthusiastic, at least resigned to the logic of paying a monthly subscription, since it can be far more affordable (at least in the short term) than paying hundreds of dollars up front for a perpetual license.

Authorization in the Cloud: The New Normal?

Software asset management (SAM) professionals in particular probably won’t spend much time agonizing over the semantics of ‘cloud’ in reference to Creative Cloud. For them, the fact that authorization (the right to use the software) is managed in the cloud means that the task of keeping errant users from getting the company into trouble with unlicensed or pirated software is a lot simpler.

It’s no secret that piracy has long been a big thorn in Adobe’s side, with leakages of revenues from unauthorized versions of InDesign, Photoshop and Illustrator. The move to Web-based authorization and annual subscriptions certainly helps to stem the tide of lost revenue and has many precedents in the software industry: Red Hat, Evernote, Google and Microsoft, among others, have all made similar moves, and other vendors have used this model from the outset.  If Adobe reports financial success on the basis of this switch, it’s seems likely that many more vendors will follow in its footsteps. And because there’s more to managing software than just compliance, asset managers will need to stay alert to other aspects of the software license juggling act.

Regardless of whether the products you are using are hosted, store data, or manage compliance in the cloud, you still need to carefully track what are probably the two greatest sources of budget waste in the IT department: under-utilization and over-purchasing of licenses. SAM professionals will also continue to struggle with a relatively new challenge, namely the ever-increasing complexities of managing a hybrid IT environment in which cloud and traditional deployments operate side by side, are governed by multiple licensing models, and support users working from a variety of locations on multiple devices.

On-Premises, Cloud, or Hybrid – You Still Need to Monitor Usage

Mixed-use environments require the right processes and the right technology. They also require that organizations develop sound methods for tracking the usage of cloud-based software as part of their broader asset management efforts. Tools for tracking usage of on-premises applications abound, but few tools provide monitoring of applications that run in a browser; even fewer offer SAM veterans a complete picture of usage patterns across the entire license portfolio at any given point in time. The move to cloud-based authorization may help companies come a lot closer to solving the compliance puzzle, but it doesn’t relieve IT departments of the responsibility to monitor and evaluate usage in an effort to eliminate waste.

If you are considering an organization-wide upgrade from Creative Suite to Creative Cloud, be sure to evaluate whether your existing installations are being used, how frequently, and by whom (most reputable SAM tools have software metering capabilities). You may discover a significant number of users have the full Creative Suite installed but are using only a single component. If you hold back from automatically transitioning these users to Creative Cloud, you may be able to save your organization a lot of money. You may also uncover skills gaps where users require additional training before they can use the product suite to its fullest extent. Further, keep in mind that moving from a perpetual to a subscription model means adding an ongoing subscription payment versus simply paying for maintenance. If new version functionality isn’t genuinely needed, the additional cost may not be worthwhile.

Finally, now may be the time to review current licensing agreements you have with Adobe with an eye toward consolidation into a single agreement that not only saves money overall but also simplifies management of your Adobe software assets.

While it’s true that the move to cloud-based authorization by Adobe and others may have eased the compliance burden on IT departments, this shift does mean IT can fall asleep at the wheel with respect to other aspects of SAM. After all, the best asset managers have known for many years that compliance is only a small part of the overall picture. As the licensing landscape becomes more complex, the real burden for SAM professionals will be tracking and managing not just compliance but also consumption of all software, wherever it may reside.

 Kris Barker is CEO and co-founder of Express Metrix, a leading provider of IT asset management software for over a decade, and curator of the industry’s first and only Software Audit Forum.