That being said, my line of argument here would be a bit more compelling if Canva were still charging for the app.
The fact that the apps are now free, suggests that they expect the subscriptions to pay not just for the backend-cluster OpEx, but also for all the developers’ salaries and so forth.
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Honestly, I think Canva here are copying Adobe's playbook, but with a more honest approach than Adobe ever had; one reflecting a much more aware/cynical take on how the software market works in 2025.
Adobe essentially charges a continuing fee just to continue to run the software they coded and shipped to you, on your own computer — regardless of whether you even care about any further software updates. (Sure, the subscription pays for other things, like Adobe Bridge cloud storage and so forth, but if you don't pay the subscription, you don't even get to just run the apps.)
But this also means that people quite often crack Adobe's apps — because there's something there of value to run on your own computer, if you just strip off the DRM.
Canva here are taking a much more pragmatic approach:
• Anything that is given to the user to run is free, because ultimately, if you charged for it, people would just crack it. They aren't bothering with DRM or even trying to treat the app itself as a revenue stream. The juice just isn't worth the squeeze. Especially if you're not in a market position where you think you can win the big enterprise customers over from Adobe.
• Anything that is run on your backend is charged for. Because users can't force your cloud services to do anything without a subscription. There's no "cracking" a cloud service.
• But also, crucially — if a feature is a "fake cloud" feature, where it could be "pulled down from the cloud" back into the client by writing a compatible implementation of the server backend that does some simple thing, and patching the software to speak to that server (either over the Internet, or to a local-on-the-machine background service that ships with the patch) — then users will do that. So you can only really charge for features that can't be "pulled down" in this way. Like, for example, features relying on some kind of secret-sauce ML model that you never expose to the client.
(And that last bit actually makes me less wary of their approach here: it suggests that they likely won't be charging for anything other than inherently "cloudy" features: these large-ML-model-driven features, cloud storage/collaboration features, etc. Which might mean that non-"cloudy" features get ignored... but likely not. For the same reason that Apple doesn't ignore macOS/iOS features in favor of iCloud features: new users won't be interested switching to the platform [and then potentially subscribing] if the base platform itself isn't competitive / doesn't serve their needs.)
Pricing in most businesses has little relation to the cost of developing and making the product. Most businesses price relative to the value that their product delivers to the customer. If there is robust competition, then the price is often driven down towards the cost, but it's not driven by the cost. In Adobe's case, they see that there is an entire industry of creative people using their products as their primary tool(s). Those employees are often paid well, with salaries from 50k-100k per year as common. Is it not reasonable (from Adobe's perspective) that employers pay 1/50th of the employee's salary for their primary and most useful tool? No one complains when the plumber requires a work truck and thousands of dollars worth of tools.
The price ceiling has little relation to cost, sure. But COGS sets an effective price floor — you'll be revenue-negative unless you do the math to ensure you're charging customers (especially your largest customers) at least COGS. COGS is the most critical number your enterprise salespeople will ask you for in order to backstop their negotiations.
For some companies, COGS and customer LTV are numbers with such different orders of magnitude that they don't even have to think about the COGS side.
But "software you charge a one-time fee for" generally produces a very low customer LTV; and "renting compute on someone else's GPU IaaS" generally produces a very high (customer-lifetime-integrated) COGS; so if they were sticking to the "just charge for the software" model, "COGS rising faster than CLTV" would be a direct threat to their business model. Which is... why they don't want to do that.
It's been a long time since I looked into it, but is pirating Adobe's products viable these days? I thought it was pretty much impossible, and the last piratable release is quite old.
The fact that the apps are now free, suggests that they expect the subscriptions to pay not just for the backend-cluster OpEx, but also for all the developers’ salaries and so forth.
---
Honestly, I think Canva here are copying Adobe's playbook, but with a more honest approach than Adobe ever had; one reflecting a much more aware/cynical take on how the software market works in 2025.
Adobe essentially charges a continuing fee just to continue to run the software they coded and shipped to you, on your own computer — regardless of whether you even care about any further software updates. (Sure, the subscription pays for other things, like Adobe Bridge cloud storage and so forth, but if you don't pay the subscription, you don't even get to just run the apps.)
But this also means that people quite often crack Adobe's apps — because there's something there of value to run on your own computer, if you just strip off the DRM.
Canva here are taking a much more pragmatic approach:
• Anything that is given to the user to run is free, because ultimately, if you charged for it, people would just crack it. They aren't bothering with DRM or even trying to treat the app itself as a revenue stream. The juice just isn't worth the squeeze. Especially if you're not in a market position where you think you can win the big enterprise customers over from Adobe.
• Anything that is run on your backend is charged for. Because users can't force your cloud services to do anything without a subscription. There's no "cracking" a cloud service.
• But also, crucially — if a feature is a "fake cloud" feature, where it could be "pulled down from the cloud" back into the client by writing a compatible implementation of the server backend that does some simple thing, and patching the software to speak to that server (either over the Internet, or to a local-on-the-machine background service that ships with the patch) — then users will do that. So you can only really charge for features that can't be "pulled down" in this way. Like, for example, features relying on some kind of secret-sauce ML model that you never expose to the client.
(And that last bit actually makes me less wary of their approach here: it suggests that they likely won't be charging for anything other than inherently "cloudy" features: these large-ML-model-driven features, cloud storage/collaboration features, etc. Which might mean that non-"cloudy" features get ignored... but likely not. For the same reason that Apple doesn't ignore macOS/iOS features in favor of iCloud features: new users won't be interested switching to the platform [and then potentially subscribing] if the base platform itself isn't competitive / doesn't serve their needs.)