Unbundling Adobe (blog.tryresearchly.com)

On its latest earnings call Adobe leaned hard into AI, saying its “AI‑influenced” annual recurring revenue has surpassed $5 billion (up from ~$3.5B a year ago) while total revenue grew 10% to $5.99B and Digital Media—the Creative Cloud suite that includes Photoshop, Premiere and new GenAI tools like Firefly—rose 11% to $4.46B (roughly 80% of revenue). Management signaled a strategic pricing shift: moving from seat‑based to value‑ or outcome‑based pricing “underpinned by commercially safe models,” arguing that AI-driven efficiency increases retention and justifies charging for delivered value rather than per-user seats. That positioning is consequential: automation and AI agents that save time can both increase product value and shrink headcount needs, undermining seat‑based network effects and opening Adobe to “unbundling.” Native generative tools inside ad platforms (Google, Meta, TikTok, Amazon) and startups building single‑task “vibe” creators mean many SMBs may use built‑in GenAI for ads instead of full Creative Cloud suites. Technically, this accelerates a shift from client software to integrated model APIs and workflow orchestration—favoring platforms that integrate multiple models and channels. Adobe’s response is to become the “OS for creative work,” leveraging integrations to capture platform value, but it faces real tradeoffs: higher per‑user value vs. potentially fewer users and more specialized competitors slicing off parts of its stack.