12 thoughts

  1. That’s there’s 10,000 European developers coming across to protest at Adobe’s ridiculous worldwide pricing policy.
    Bring back Allaire.

  2. @Chris,
    Yeah, you’re not in the UK are you?
    I can download CF8, however if I want to buy a licence key I have to pay $1500 more (excluding taxes) for the key than you do. I’m happy with the US price, but I don’t see why I have to pay more than

  3. Adam,
    This is ridiculous – The pricing scheme for CF 8 in GB Pounds is practically unchanged. The only thing that’s changed is the exchange rate. Adobe has to price these products NOW for the next 3 years, and it isn’t going to do it at today’s inflated exchange rate. This isn’t some sort of predatory pricing scheme, it’s the result of economic policy – both the U.S. government (that wants a weak dollar) and the British government (that wants a strong pound). To argue any thing else is ridiculous. 10,000 signatures to the EU? Start with parliament.
    David

  4. David,
    Just because a price hasn’t changed much doesn’t make it OK. Also Adobe can and should be dynamic on it’s pricing.
    Here have a read http://www.flashmagazine.com/1396.htm
    Please note other companies have ‘solved’ this. Hasbro had the same issue with online sales of their virtual version of Magic The Gathering. If you are a UK customer, they charge you VAT (in $) and they pay the UK government.
    We are talking about the ‘general’ international pricing policy. This doesn’t just apply to one product. Fireworks should not be $299 in the US and £299 in the UK.
    Ironically this is a software product distribution issue. One of the leading Web companies in the world doesn’t seem able to sort out what 1000s of others have. Their site encourages you to download the product and not have the box shipped to you.
    If you take the example of Mac as another software company that sells into Europe their EU prices are between 10%-23% more expensive than US prices.
    Companies get this right. There are lots of solutions out there. 100% price differences are not one of them.
    Ironically this completely messes up Adobe’s figures. Due to the web it is extremely easy to circumvent this issue by purchasing in the US (try amazon.com). You just need a US address to send to.
    So sales look strong in the US but poor in other countries at which point Adobe cut back on those countries with poor sales.
    TBH I dislike being done over and in this international market, this is what it feels like. I’m also of the opinion that this needs to be discussed as as much as anything CF struggles as a technology in the UK (even though it is fantastic) and this just doesn’t help the situation.
    If I didn’t care about CF, I wouldn’t post on this matter.
    Adam

  5. Adam,
    I don’t understand your comment regarding VAT – all U.S. prices exclude sales tax, which you pay on top of the list price (6% in my case). All prices in the UK include VAT of (I think it is) 18%. Nobody is charging you in $’s for UK taxes. UK taxes are levied on products sold in the UK by the UK government.
    A part of this gets back to Chris Peters point – Apple, Dell, Hasboro, you’re talking about what are essentially commodity items. Computers are commodity items at this stage – Gateway and Dell compete on price, and they’re not even made in the country they are sold in. A part of the cost savings may be that Dell local operations are cheaper in Europe than the U.S. My observation is that PC’s are cheaper in some parts of Europe than the U.S.
    The likes of ColdFusion, however, are not commodity items – they are very specific products for very specific uses. It’s the same with MS office – take a look at the difference in price if bought from the UK versus US amazon site. It’s the same thing. Again, a very specific item is getting caught up in the exchange rate (and tax rate).
    It would be also unacceptable if the UK population started posting "thank you" blog posts to Adobe for "lowering" their prices when the exchange rate gets back to a more manageable, lets say, 1.6 to the dollar.
    Unlike maybe some others that have weighed in on this situation, I’m not saying you don’t care about ColdFusion – I think it’s laudable that you take the time to express your your opinions, and I really do hope they have some affect. I’m a consumer, so I’d like to see the price of CF come down for me also – as long as they can still turn out as good a product as they did with CF 8. I am simply, and I hope respectfully, disagreeing with your arguments.
    Cheers,
    David

  6. Hi David,
    The US price for CF Ent is $7500, the UK price is GBP4560 or around $9000. On top of this you then pay 17.5% VAT, however most companies can claim this back so I don’t consider it an issue. I am paying $1500 more for the same licence key.
    If we can step back from this and look at the bigger picture. Adobe are pricing products in USD and are then selling the same downloadable product outside the US for anything up to 100% mark-up. Remember this is downloaded product and I think the last time $1 = £1 was last century.
    You are currently in a situation where European developers are urging people not to upgrade.
    Ironically Adobe are encouraging VAT fraud. They push the price so high in the UK, that people buy in the US, download the install from Adobe and just licence the product using the key purchased in the USA. There is no ‘physical’ movement of product.
    If their was price parity AND Adobe collected the VAT in $ then this would not be an issue.
    However you are going down the right track comparing Microsoft to Adobe. I used to think Adobe was one of the good guys, now I’m not so sure.
    Adam

  7. Hi Adam,
    Again, we’re spinning our wheels on this – I see you paying more because of the exchange rate, and you see a strong pound as a reason why you should pay about GBP1000 less for the same product. I see that as far as local purchasing power is concerned, you haven’t had an increase in the price of CF. It seems to me that UK developers are arguing on principle – pound strong/dollar weak, reduce the price. I could be wrong, but I don’t think a weak dollar means you guys get paid less, or charge less for your product in Britain (although, competition may drive that aspect). My argument is based not on principle but cold hard facts – the exchange rate WILL adjust down (it HAS to!) and CF8 is equivalently priced compared to CF7 AND local purchasing power. I"m sorry, I just don’t see your argument flying.
    Now, you mention some products that are priced the same USD/GBP – yeah, you win there, I’ll admit that the pricing is unfair. Some price differential could be explained away due to local costs in operations, but not the amount you mention (I didn’t research it, by the way, I just took you at your word for the fireworks figures).
    Adobe isn’t encouraging VAT fraud – I’m pretty sure it’s illegal to use software bought in the US for UK operations anyway. Yes, it’s a temptation, no it’s not encouragement.
    MS and Adobe the same? Well, they’re both profit making corporations that are obligated to have their shareholders best interests in mind – and some people consider that evil in itself!
    Adobe doesn’t deliberately and illegally subvert their competitions operations in order to get ahead, they win competition with innovation. Now, if you think making expensive products makes them the same as MS, then lump alot of companies into the same pot.
    Cheers,
    David

  8. Hi David,
    Oh I’m not using a US version of a piece of software. I downloaded the UK eval version and activated it with a US bought key.
    From a conversation I had with Ben, the formula is to take a USD -> GBP favourable conversion rate, then add 15%. Looking back a whole year the lowest dollar exchange puts the price at around $8400.
    We can argue exchange rates to the cows come home. The issue is one of method as much as anything. Adobe encourages you to download the product and then buy licence keys. They do not want a material transaction.
    Now step back and recognise that the EU was extremely concerned at the loss of VAT through international internet sales for ‘virtual’ products. So they set up a mechanism for payment of VAT on such items. (e.g. Hasbro charge you VAT on buying a virtual pack of cards ($3.79) if you buy from the EU and pay this money to the EU).
    What Adobe has done is say to the EU, it’s ok, we have the same download mechanism, but if they want to buy in the UK they have to use our UK shop through which we charge VAT.
    However the price is anything up 100% more expensive than the US online shop or even the retail box in the US. So one click away I can save myself $1500….
    Any company/person with any intelligence would try and source the licence keys (note not the software as this is downloaded from the Adobe site) from the US. It could literally save them 10,000s.
    What exactly would you do in this situation?
    Adam

  9. Adam,
    We’re getting into a slightly different conversation – you make a quick observation regarding the exchange rate, and then move onto some legal matters. So, to start, while you may have looked back at the past year to find a "favourable" exchange rate, I would have gone back alot farther if I were in charge at Adobe. A "traditional" exchange rate has been about 1.6 – granted, its been a while since we were there, but when we were there, it was like that for the best part of 20 years [just an FYI, I’m originally from Ireland, and have been dealing with exchange rates for years – when my Uncle used to send me back dollars for my birthday :-), I was 10 and I could do the conversion in my head – people thought I was a math wiz, but we digress!].
    Now, as you said, the exchange rate issue we could talk about forever. But I’m glad to see we’ve discussed the finer points, and gotten to a "formula". That’s fine, and the only piece missing from the formula is what Adobe termed "favorable". We could probably work that out.
    Before I get onto your next point, here’s the thing. The UK market has been engaging in a theoretical argument regarding the pricing. I know the exchange rate NOW, I know the price in the U.S. NOW, and I can work out the equivalent dollar difference from the UK price NOW. When they do that they scream bloody murder. I mean, the things that were said about the pricing were just hysterical. It took no consideration of the matters you and I have logically discussed, and it certainly didn’t take into account that the local purchasing power of the GBP versus a non-price increase, locally. We’re talking about hysterical ranting on the part of some people.
    Regarding the legal aspects – you know my family comes over here every November, and takes advantage of the strong Euro. They hit the malls with a vengance. I’m pretty sure, they should be paying VAT on those clothes/ipods/golf clubs, but they aren’t.
    Now, is it a temptation to do the same with CF? Sure it is. What would I do? Well, that depends, do I want to keep my business within legal parameters? My company deals with this all the time, we HAVE to stay legal on our licenses. So, what would I do? I would probably pay the license fee in local dollars, to stay legal. Again, the pricing isn’t 100% MORE than in the US, the local pricing, with local currency, and local buying power is the same as it always was. The exchange rate has caused a statistical difference in the price, but that’s more of a saving for you, like with my family, if you come to the US and buy the same product, as opposed to buying it there.
    Even though the dollar is weaker, the price of the Abercrombie jacket in Ireland that my sister wants hasn’t increased in price – it’s just cheaper if she comes here and buys it. She isn’t getting paid less in her job, or that it costs more to travel to the city to buy the jacket. It means that she can get more dollars for her Euro, and get the same product for less. It doesn’t mean she’s getting ripped off by Abercrombie, or that Abercrombie doesn’t care about her, and that all of a sudden she can’t afford the jacket. It’s not a reason to dump Abercrombie and shop GAP, it’s just a momentary statistical difference caused by exchange rate.
    It’s exactly the same situation for CF. Still, the way the UK market is going on about it, you’d think Adobe nailed them to a cross. Now, it’s a heck of alot easier to get CF in the US, from the UK (I would imagine, never tried it) than it is for my sister to get the jacket. But the analogy still stands.
    What the argument has come down to is "I don’t like the exchange rate" and "I’m tempted to break my local laws". Neither is Adobe’s fault.
    Now, it would be nice if Adobe said for a period of, let’s say, 6-12 months, that they will rebate a certain amount to UK / Euro customers to account for this statistical difference. Although, I tell you, I can see the uproar from the UK base when they say GBP500 instead of GBP1000, and maybe that’s why they are doing nothing.
    Just my humble opinion on the matter.
    Cheers,
    Davo

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