Adobe Photoshop goes SaaS

The news that Adobe is offering its flagship product Photoshop (or should we call Flash its flagship product after the acquisition of Macromedia?) as an online service has caused quite some speculation on the acceleration of SaaS (Software as a Service).
I find this news interesting for 2 reasons: what is Adobe's product strategy and plan with this move, and what are the consequences of a move to a true SaaS model?

As for Adobe's strategy: I predicted earlier this year that Adobe will be acquired by Oracle. Although there are still some rumours that Oracle's first acquisition priorities are with BI vendor Business Objects, I still believe that an Adobe acquisition by Oracle is very feasible, not in the last place because Oracle might consider Adobe as the doorway to the new, emerging market of rich user interfaces and desktop computing (Acrobat, Flash, Photoshop, video editing stuff). If Adobe manages to leverage its web presence with a Photoshop SaaS offering, it will probably become an even more attractive target for Oracle. This move by Adobe has not and will not go unnoticed, and the exposure Adobe is getting for its SaaS efforts, can create the right momentum for the acquisition by Oracle.

In the second place, I find this news interesting because it is a test case to see whether the open source business model works for software as well. We should not be mistaken about the Adobe plans: it is nothing more than offering only a limited set of Photoshop capabilities on-line, it is not like all the very sophisticated functions from the desktop version are incorporated in the online version. Add that to the fact that Photoshop online is what is called an "ad-supported online service", and it becomes clear that also with Photoshop as most people know it, there is no such thing as a free lunch.
In line with the Web 2.0 business model discussed before, Adobe is giving away something expensive but considered critical, hoping to get something valuable for free that was once expensive. It could be a way of attracting customers and make them want the full, desktop version of Photoshop, or it could be a true step towards "good enough" software offered via the Internet. The question with the latter is: what's in it for Adobe? Will they charge users in the future for using the online Photoshop? Will they gain income through support and services (I wonder if this will work: I predict that online communities will emerge that provide peer-to-peer support for online Photoshop users)? Are they only doing this for brand recognition or to win sympathy?

Many people applaud the SaaS model, because they feel it is important to cut down on physical media, and replace this with online storage. However, the SaaS model requires a much higher bandwidth, and not only that: it requires a reliable connection to the software that is consumed as a service. You do not want to be in the middle of editing your pics from your latest holiday, and all of a sudden find out that your connection is slow, and the HTTP request from your browser times out. Another aspect could be the enormous media exposure that such initiatives could get: are the online services prepared for the huge peak load when influential media have a story about it and all of a sudden everyone wants to check out that cool new service.

According to Adobe's plans, Photoshop should be online in 6 months. Enough time then to think about some of the above issues, and I will follow this with great interest.