Enterprise IT, Featured, News - Wednesday, March 27, 2013 12:41 - 24 Comments

Adobe misleads IT price hike inquiry

Note: This artice initially included comments Adobe Australia MD Paul Robson made regarding the research and development costs of producing software. However, Delimiter has determined that there are several possible interpretations of Robson’s comments. Hence, we have removed this section of the article and invite readers to consider the transcript of the executive’s opening statement themselves (PDF).

news Adobe appears to have given a number of misleading and highly contestable answers to key questions posed to the software giant by the Federal Parliament’s inquiry into IT price hikes in the Australian market last week, in a move which builds on questions currently being debated about the company’s future relationship with its customers.

It has long been the case that many of Adobe’s popular products — such as its Photoshop, InDesign and Illustrator stand-alone products and its Creative Suite bundle — cost dramatically more when sold in Australia compared with the same products sold globally, even when the products are distributed online with no physical boxed copy. For example, in April 2012, Adobe revealed that locals would pay up to $1,400 more for the exact same software when they buy the new version 6 of its Creative Suite platform compared to residents of the United States, meaning some Australian residents can afford to fly to the US to buy a US version of the software and fly back, for the same price they would pay in Australia for the software.

However, over the past six months, Adobe has refused to back down from its approach to the issue in the face of strong criticism from customers, customer advocacy groups and local politicians. The company has repeatedly stated that the cost of operating in the Australian market is different from those of other markets such as the US. In addition, during a recent visit to Australia, its chief executive Shantanu Narayen flatly refused to answer direct questions on the issue, instead repeatedly emphasising that the company saw the future of its products as being its leased version of Creative Suite, termed Creative Cloud, rather than the traditional Creative Suite software which still makes up the vast majority of its revenues.

Last week the managing director of Adobe’s Australian division, Paul Robson, attended the Federal Parliament’s IT price hike inquiry to discuss the company’s Australian pricing strategy. Robson did not voluntarily attend the inquiry but was compelled to do so after Adobe repeatedly declined to attend. The PDF transcript of Robson’s appearance is available here (PDF).

However, in his testimony, Robson made a number of statements which appeared to be misleading.

For example, asked whether it was economically and ethically justified to charge Australians substantially higher prices on the basis of geographic market segregation, Robson replied that what customers were seeking was “personalised” experiences from technology companies.

Robson further stated: “When we look at relevancy around personalisation, that is in relation to the redirection of customers when they access our website. When customers access the Adobe.com website they can choose to see whichever website they wish to see. We automatically try to get them to look at the Australian site, for a number of different reasons. There is local content. There is information in relation to local user groups and communities that use our technology that they can learn from and contribute to. There is information that is relevant to the local market in relation to Australian based pricing and other content and information.”

“That content is a richer and more personalised experience for an Australian customer than they would get if they accessed a webpage that was in another language or for another country.”

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