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Big changes to Adobe licensing may increase audits in short term

Adobe's transition to a subscription-based cloud system creates many new user agreement options. But will the change also increase users' audits?

As with any other software, Adobe licensing can be confusing. This is especially true as Adobe Systems Inc. transitions to a new subscription-based cloud licensing system. The Adobe licensing landscape is changing, as is what users can expect with regard to agreement options and audits.

With the introduction of its Adobe Creative Cloud update earlier this year, the company also announced that while Adobe Creative Suite will continue to be supported and available for traditional licensing, there will be no future updates. All updates and enhancements will now be focused on Adobe's subscription-only Creative Cloud products.

Companies that opt for traditional or mixed licensing can expect Adobe to look for a range of noncompliance issues.

Many other software companies are evolving toward subscription-based cloud services. For instance, Microsoft is currently pushing its Office 365 subscription features on both business and home users, with an option to pay monthly or annually. However, Adobe is upping the ante by only supporting future updates for its subscription-based Creative Cloud products. This seems to signal a faster transition to an eventual all-cloud, all-subscription-based licensing model.

The Value Incentive Plan (VIP) is Adobe's subscription-based licensing program for Adobe Creative Cloud that includes no minimum license purchase requirement. Organizations can subscribe to as few or as many Adobe subscription licenses as needed. Once enrolled, users receive a VIP number and access to Adobe Licensing Website (LWS), where they keep track of licensing and manage their accounts.

With a dashboard that reports usage and licensing, the IT organization will have a much easier time understanding and managing licensing compliance. Subscribers can download and start using the subscription immediately, but they must pay within 30 days or the product stops working.

Ongoing support for traditional perpetual licensing

These changes do not mean Adobe users must make the transition immediately. Perpetual licenses can be applied to existing Adobe software and tools. Adobe Acrobat, Captivate and noncore creative applications can still be purchased through an Enterprise Agreement (EA). Adobe's Enterprise Agreement is a relatively new, three-year perpetual license option modeled after Microsoft's licensing structure. Organizations must purchase at least 100 licenses plus support and maintenance for Acrobat Standard, Acrobat Pro or Adobe Presenter. These are the only programs available under the EA.

In addition, new customers may still purchase Adobe Creative Suite using one of two traditional licensing plans:

  • Transactional Licensing Program: A perpetual license with a one-license minimum designed for smaller organizations with a single pricing level.
  • Contractual Licensing Program (CLP): A perpetual license with a 10,000-license-point minimum requirement. Customers can purchase and download all Creative Suite desktop products, but support costs extra. The CLP is a two-year agreement.

Subscription-based cloud software models may well be a trend of future software licensing, but organizations uncomfortable with Adobe's recent changes have the option to stay in Creative Suite. However, doing so excludes opportunities for future updates or support.

Here's another virtually guaranteed scenario for those that try to stay put: At some point, there are going to be documents available online that a company cannot download because it's been five years since its last Adobe upgrade, and it no longer has the required Adobe tools to view the file.

Adobe licensing change's audit influence

Adobe's Creative Cloud licensing model may change the nature and complexion of its audits significantly. One of the major benefits of a subscription-based VIP cloud license is automatic program updates and support, which greatly simplifies licensing compliance. Using a cloud-based service gives Adobe and other software vendors much greater control over the use of its software. It's reasonable to predict that as more organizations opt for the VIP subscription-based licensing program, the need for audits will decrease.

More on cloud licensing

Compliance, cost concerns when moving software licensing to cloud

Office licensing overhaul requires cloud subscription

This does not mean, however, that there will be no audits for organizations that use the VIP model. Everything is speculative at this point, but there will always be software licensing issues regardless of the model used. Audits are never pleasant, and they are certainly never convenient.

Organizations that maintain the perpetual licensing model, or transition to a combination of VIP and perpetual licenses, should expect Adobe licensing audit frequency to at least slightly elevate. On its website, under "Unresolved Issues," Adobe states that "software managers will need to identify which installations are part of the Creative Cloud and which are installed traditionally. In the meantime, expect software audits from Adobe."

Companies that opt for traditional or mixed licensing can expect Adobe to look for a range of non-compliance issues, such as incorrectly installed images, excessive administrative access by users and an inadequate software asset management program.

While individual infractions may be inexpensive, in many enterprises there is a large desktop component, so shortfalls can add up quickly. The chief financial officer won't care if there are a few infractions that cost $100 each. But beware if there ends up being $200,000 unbudgeted cost for truing up 2,000 desktops because of software audits.

About the author:
Tim Hegedus and Michelle Estes are senior analysts for
Miro Consulting Inc., an IT asset management consulting firm focused on Oracle and Microsoft licensing management, as well as Oracle hardware assets.

Let us know what you think about the story; email Ben Cole, site editor. For more regulatory compliance news and updates throughout the week, follow us on Twitter @ITCompliance.

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Do you think the Adobe licensing changes will increase audits for users in the short term?
Yes-- Adobe had always audited once per calendar year anyway-- have to watch for the audit rights that Adobe wants for subscription based licensing now.