Adobe tweaks the Web apps business model with paid collaboration

The puzzle for software companies as they adopt Web services is how to make them profitable. Anyone who tries the ad-supported model 1) plays against Google on its home turf; 2) risks working against application efficiency; 3) could raise the ire of users. And anyone who tries offering subscription to storage space 1) could easily be outdone by the first vendor to give away all its space for free; 2) faces an uphill value proposition against cheap local storage, and free synchronization such as Windows Live Sync solving the mobility problem.

Over the past several months, we've seen Adobe playing up collaboration as a key feature of its Acrobat.com service, even over portability -- the element that's most often associated with Adobe. Today, we have confirmation as to why: Inaugurating a potentially lucrative subscription strategy, Adobe hopes consumers will be willing to use Web apps such as Buzzword for free, while paying monthly for the capability to share documents.

"Our goal is to help you get more done faster by moving collaboration out of your e-mail and into an Acrobat.com Shared Workspace. Sorting your inbox on date to find the latest version of a co-authored document is not ideal," writes Adobe product evangelist Ali Hanyaloglu Sunday afternoon. "E-mail was never intended to be a content management system, but for most of us, it's certainly being pressed into that role. With Acrobat.com, we've been concentrating on helping individuals work together: I invite you to my document."

The pricing model will be tricky: Adobe is pushing a $39/month subscription fee (first two months free for customers willing to pay annually), for an essentially unlimited sharing configuration. The "shared workspace" in this case refers to the group of documents (and folders) that are accessible by multiple people. Counter to the way housing works, your own space is yours but you pay to share it with others. The "shared workspace" is the storage area for documents that you create.

This is where it gets tricky: The shared workspace does not have an obvious size limit, and as Adobe's FAQ makes clear, "There is no limit to the number of people you can invite into a single Workspace." So the key reason one would want multiple workspaces is in order to designate different combinations of other Acrobat.com users with whom to share documents. At $39/month, you can have any number of such combinations; but for the intermediate "Basic" plan at $14.99/month or $149/year, you can have up to 20 workspaces.

So besides the limit on Web conferencing between the higher "Plus" and the intermediate "Basic" plans (20 people versus 5), it's the right to share with more than 20 possible groupings of any number of collaborators, that Adobe has evaluated as a $250 annual premium.

In Sunday's blog post, Hanyaloglu suggested one reason someone might want unlimited workspaces is to be able to publish to multiple groups of customers: "if you want to create an easy-to-use space to make it more efficient to serve your customers, create a workspace for each of them where you and they can easily share and collaborate."

Adobe is characterizing its "Free" plan as more of a trial: one workspace with a three-person limit on video conferencing. There's another interesting limit here, too: a five-document limit on PDF conversions -- no such limit on the paid plans. Here's where one realizes the risk Adobe is taking: When Hanyaloglu refers in his blog post to consumers' e-mail inboxes full of "nothing but paper clips," a huge chunk of those attachments (represented by paper clips in Outlook and other clients) are PDF files. Although PDF is now officially a free international standard, Acrobat software is still the key editing product for creating and publishing PDFs.

Arguably, a collaborative workspace where files exist "in the cloud" would not require PDF conversion nearly as much as a conventional work environment where documents are shared via e-mail. So Adobe's new business model, in one sense, competes directly against Adobe's old business model. It's a gamble on an evolutionary path where the brand obsoletes its own product over time, or at least one function of that product -- which is not the way planned migrations typically work. Imagine a Microsoft online service that gradually renders obsolete .DOCX files -- that's not likely to happen anytime soon.

Last May, Adobe introduced Presentations as an online venue for distributing presentations for conferencing, putting Adobe in more direct competition with PowerPoint. In a sense, that's another direct bid to obsolete conventional PDF, which in the early 2000s was being geared as a PowerPoint competitor in itself. Although Adobe Presentations can be published as PDF files (PDF with instructions available here), that's more of an export maneuver; Presentations are actually Flash animations -- substantiating Adobe's other principal platform.

In fact, you might interpret Adobe's entire Web apps strategy more as a bid to make Flash competitive in the applications space against AJAX and JavaScript, than to prop up any document format -- even if it used to be its own.