The Age of Subscriptions

As an industry, we’re on the verge of a fundamental shift: versions are a paradigm of yesterday. We’re replacing them with constantly evolving products.

We live in an instant-gratification stable-beta kind of world. Users want the latest greatest features, trendiest visuals (*cough* skinny white sans serif on an image *cough*), and private alpha access. They want to loudly complain about how much they disliked the new layout they were A-B tested on, which none of their friends were special enough to see. The daily life of a user is filled with apps that run quiet nightly background updates and websites that push and roll back updates with no hesitation. Change is inherent, expected, and — if done right — eagerly anticipated.

It’s been two years since Adobe shifted from its multi-year release cycles to Creative Cloud, a subscription-based model. All new “versions” of this software require users to rent to stay relevant. Users get all the goodness in real time, but only get access so long as they continue to pay. Such a dominant, expensive brand making such a change creates more than just a business impact — actually, it refocuses the entire game of product design.

Versions enable marketing stories around the product and its major updates. There’s a target audience and ad campaigns; there are upgrades to sell and customers to educate. A version is a compilation of long-term investments that started before the last product shipped and short-term delighters, sprinkled in. Many of these investments are based on projections and guesses, and some of them will be outdated or overdue even before the product ships. Others will be cutting-edge revelations that get reviewers giddy and users to stores.

Subscription models turn the product into a service. This has several important effects:

1. The quick turnaround cycle pushes most of the focus on short-term investments. Teams working on long-term investments will find it hard to compete with peers who can point to the product and say, “I built that. What did you do in the past 6 months?” Teams who utilize both strategies will inevitably reallocate resources to the short-term to keep up, delaying and eventually sacrificing long-term investments. This is particularly true for non-marketable features, like updating infrastructures or improving process costs, which help the company perform and compete. Shipping major products as services requires careful oversight and a conscious effort for a balanced system.
2. But users can’t always see the benefits of short-term investments. There could be plenty of incremental improvements but, much like you don’t notice the aging of a person that you see every day until you look back at old photos, these may escape the user’s notice. User experience gets more opportunities to improve; pain points can be fixed as they are realized. These improvements are harder to sell, though, because one can’t advertise a plethora of small changes. This means that services must be sold differently than versions.
3. Services are driven by brand loyalty. You’re selling the vision of the company, not the cool new features on this version of the product. Users are much less sticky to services because they have no ownership and zero to little cost to switch — this is what makes the brand so crucial. Incremental improvements become less important to advertise because customers who don’t know the old status the system can’t appreciate them. Marketing becomes heavily focused on capturing new users and inspiring current ones to stay by buying into the brand and mission. This creates a tension: designers and engineers are focused on shipping updates quickly, prioritizing easy-to-reach improvements, while marketing is focused on the brand and vision of the product. A symbiotic relationship between marketing and engineering, then, becomes crucial to ensure the product evolves with the vision and vice versa.

It’s a brave new world of software development. Users get fresh products and relevant changes; the competitive race tightens. But ownership and stability are stakes of the past. Service software is built differently, perceived differently, and sold differently. As new engineering practices and business models arise, as users are sold on the company and mission, product design and great UX become more important than ever to keep users happy and loyal subscribers.