Software: Web-based vs. Packaged

Just received an announcement from Adobe regarding the release of Photoshop CS3 (Creative Suite 3) in spring 2007. The company is releasing two editions: Photoshop CS3 and Photoshop CS3 Extended. When I read the announcement, I thought about the many web-based photo editing applications that have come out. Of course, their features aren’t as extensive as Photoshop’s features.
Then this morning, I read an article in The Dallas Morning News (may require free registration) about web-based applications vs. boxed software. The article even mentions Adobe and the company declined to comment. Apparently, Adobe will release a free streamlined version of Photoshop online.
With Google and many developers releasing free web-based applications for word processing, spreadsheets, photo editing and flowcharting, how will that impact the boxed business? For one thing, boxed software doesn’t require access to the Internet to use. Using web-based applications also means being at the mercy of the hosting service. What if it’s down? What if it goes out of business? What if security gets compromised?
We also don’t know if free web-based will stick around long enough (somebody has to pay for hosting and storage) or if they’ll go from free to fee. So I wouldn’t write off boxed apps just yet.
Remember the fax? People thought it’d be dead by now and many of us still rely on it.

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