Q: What were the effects on Adobe’s finances when they switched from a licence purchase to a subscription model?

Switching to a SaaS model, and going deeper into SaaS, was a generational accelerant for Adobe:

  • Stock price up 1300%
  • Revenue run rate grew from $4 billion in 2012 to an estimated $14 billion in 2020 (!)

We all underestimated the force the Cloud would become.

Way underestimated.

Adobe was essentially stagnant for the better part of the Decade before going all-in on Cloud around 2012. And it took a few years for the benefits to really kick in, as recurring revenue initially led to a lot of deferred revenue (as revenue had to be recognized over a longer period of time).

But then … boom:

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