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Adobe sweeps Creative Suite under the Cloud

Adobe's global CEO Shantanu Narayen defends product pricing of the Adobe Suite at the opening of the company's new office in Sydney on Thursday.

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Opinion

The federal government has no hope of getting tech companies to bring down the cost of many goods and services with its IT pricing inquiry if comments by Adobe's CEO are anything to go by.

On Thursday, Adobe global CEO Shantanu Narayen was in Sydney to open a brand new Adobe office alongside Communications Minister Stephen Conroy and NSW Premier Barry O'Farrell.

Shantanu Narayen, president and CEO, Adobe Systems, speaks during the launch of Adobe Creative Cloud and CS6 in San Francisco, April 23, 2012. Adobe is investigating claims of a zero-day PDF Reader exploit for sale.

Avoidance tactics ... Shantanu Narayen, Adobe president and CEO. Photo: David Paul Morris

Unfortunately for Mr Narayen, it was the worst possible time he could have jetted in.

The main questions journalists wanted answered were to do with Adobe gouging Australians on price when it comes to selling software such as Photoshop in Australia. As pointed out by many, including tech website Gizmodo, it's actually cheaper to pay for a return airfare ticket to the US and purchase one particular collection of Adobe's software there than it is to buy it here in Australia - and even then you'll end up with $601 worth of savings, points and a holiday!

To take the edge off how powerful the grilling of the Adobe CEO by journalists would be, the software firm announced on Wednesday (one day prior) it would be reducing the cost of its subscription-based “Creative Cloud” offering. It relies on month-by-month payments for access to Adobe software - a move away from the traditional one-time fee for its use that will make Adobe more money in the long term if customers continue to need access.

Shantanu Narayen

Shantanu Narayen, Adobe president and CEO. Photo: Bloomberg

The price reduction also came two days after Parliament summonsed Adobe, Microsoft and Apple to appear before the federal IT pricing inquiry in Canberra on March 22. The three tech giants, among others, have been accused of stonewalling efforts by politicians to figure out why Australians pay so much more than Americans for identical technology products they sell.

While Adobe's goodwill gesture on subscription pricing will be appreciated by some, the fact is it didn't harmonise the cost of its traditional once-off fee software, which in at least one case is $1800 more expensive to purchase in Australia than in the US. Many people prefer this software because it means they get to keep it and never have to pay for its use again.

In defending the price disparity, Mr Narayen talked up the Adobe subscription service and its recent price reduction but refused to address the difference in cost for the once-off fee software.

He said subscriptions were the future of Adobe. But if that were truly the case, why didn't Mr Narayen make the decision to remove the once-off fee software from sale?

Because he doesn't have to. He runs a firm that does what's best for shareholders.

If Adobe can continue to bleed money from Australians who don't know better, then it will.

It's important to note that Adobe is not alone in gouging us: Microsoft and Apple do it too. An example of this is consumer group Choice discovering one Microsoft software development product that was more than $8500 cheaper in the US. Apple also charges more for many goods and services here in Australia when compared to its US prices.

And it's not just the tech industry. As pointed out by many Fairfax readers and even Apple co-founder Steve Wozniak while he was in Australia last year, car companies also do it.

The IT pricing inquiry by Parliament will help name and shame companies that gouge.

But if Adobe's stonewalling attempts in Parliament next month are as good as they were on Thursday with journalists - who are at times more annoying to argue with than politicians - then they'll continue to do what they do best, and gouge. Companies don't feel shame, and their CEOs, at least in Adobe's case, don't appear to be easily offended by the idea of it either.

Does this mean we need some sort of law to protect us from gouging? I'm unsure about that.

While I think what Parliament is doing is a good idea, it likely won't result in too much of a difference to prices charged by companies that are prepared to gouge. The government knows they don't have the power to regulate prices, but they are conducting the inquiry to draw public attention to gouging in the hope companies can be shamed into changing their ways.

The best thing Australians can do is show firms how they are able to vote with their feet and use other companies' goods or just import it from wherever they can find it cheaper.

As mentioned earlier, Adobe, Microsoft and Apple have been summonsed to appear before Parliament next month. Will their representatives answer questions politicians put to them? Probably not.

Words will come out of their mouths - but they won't be the words we're looking for.

We live in a global economy. Companies can no longer hide behind borders.

twitter This reporter is on Facebook: /bengrubb