Adobe

In 2013 Adobe made the most terrifying business decision in software history. It killed its own golden goose. For decades Adobe sold Photoshop Illustrator and the rest of its creative suite together for over $2,000 per license. Customers paid once and used it forever. Revenue was enormous but unpredictable because it depended on people buying upgrades every few years. CEO Shantanu Narayan announced that Adobe would stop selling perpetual licenses entirely and move everything to a monthly subscription called Creative Cloud. Wall Street panicked, the stock dropped. Customers were furious, the pricing psychology was radical. Instead of paying $2,000 upfront, customers would pay $50 per month on an annual commitment. The sticker shock vanished. Students and freelancers who could never afford the full suite suddenly signed up. The addressable market exploded. Within two years Creative Cloud had over three million subscribers within five years, over 15 million.