Adobe takes IT price grilling, points to the cloud

Adobe survived a grilling over geographical price differences for its software by pointing to the irrelevance of the debate as software delivery models shift from boxed product to the cloud.

Appearing before the federal IT price inquiry in Canberra, the software maker's A/NZ managing director Paul Robson batted back a series of tough questions on why prices for boxed product varied so greatly between Australia and other countries.

He acknowledged the software in Adobe's boxed and cloud products was "the same, the delivery mechanism is different", but said cloud offered a far lower operating cost base for which buyers could benefit.

"There's a cost associated with traditional boxed product that you simply don't have when you deal with products and technology via the cloud," Robson said.

"The cloud doesn't require the [optical] media to be created, the box to be built from cardboard, to be wrapped in plastic, to be put on a pallet, to be put on some form of transportation, to be shipped to the country, to be shipped out to retail partners that employ bricks and mortars and staff and training to sell it onto end customers."

Robson said Adobe's cloud-based offering was, "at raw dollar terms priced [the same] as the United States and other markets."

When quizzed about large price differences in boxed products, he repeatedly fell back on the geographic price equivalence of the cloud service.

He said Adobe customers were increasingly moving to the cloud model, making the debate aorund boxed product pricing irrelevant.

Over 75 percent of Australian customers purchasing from the Adobe website were opting for cloud, Robson said, but he declined to detail how that percentage translate into sales figures.

He also declined to address why the remaining 25 percent of Abobe customers were forced to fork out more than international counterparts. 

He did, however, note that Australian customers wishing to get the cheaper US pricing "can choose to go to America and buy it from local American businesses... [or] import it from local American partners."

Unfair share?

Jones later labelled Robson as "evasive" in a line of questioning that attempted to establish there was little physical difference between boxed edition types — such as student versus full — that would justify huge differences in price.

Robson was also taken to task by Jones over whether Australians ended up footing a disproportionate share of Adobe's worldwide product development costs, compared to other markets.

"On its face, we're paying more for our contribution to the IP development in Australia than any other country in the world," Jones said.

"I'm now looking at the distribution between countries of how much it costs to develop the product. Are we paying a disproportionate amount in Australia for that investment in IP than we would if we were sitting in the US buying that product?"

"I don't believe so," Robson said.

"Ive gotta say, Mr Robson, that the evidence would tend to suggest otherwise," Jones replied.