Thanks again everybody for joining us here at MAX. Also thank you to those on the live webcast here today. My name is Mike Savage. I head up investor relations here at Adobe. Our goal today is to really give you an update on our strategy, to talk about our business opportunities and the markets and the size of those markets. Then, of course, to save some time for Q&A later on. For those participating here, also on the webcast, we posted slides on our investor relations webpage, you can access those now or later at your convenience. We're also going to have an archive of the webcast available, you can watch that, we'll keep that up to the end of the quarter.
With our agenda today, we'll have several presentations by Shantanu, David, Brad, and Mark. Then I mentioned we'll have Q&A. Before we start, I just need to go through our financial disclaimer. Some of the information we discuss today contains forward-looking statements that involve risk and uncertainty, we ask that you please review our SEC filings for a complete understanding of those risks and uncertainties. With that, I'll hand it over to Shantanu to start the meeting.
Thanks, Mike. I'd like to extend my welcome as well. It was an exciting day today to be able to talk about what we were doing on the creative side. Our mission, as all of you are aware, hasn't changed, which continues to be to change the world through digital experiences. Where these digital experiences are created, where they're consumed, and how they're monetized, as we all know, is going through a very dramatic change, we see all of that tailwind associated with content creation and content management and content measurement, as well as content mobilization. MAX really for us is a celebration of our creative heritage. As a company, we focused on two growth themes, as you're aware, the Creative Cloud as well as the Marketing Cloud. I'll spend some time on it as well as David and Brad.
What we're also increasingly focused on is making sure that we provide increased value as a result of the combination of what we can do between the creative process as well as the marketing process through the entire content life cycle. What that means really is that in addition to actually effectively serving our customers with the creative products, we've been able to do a lot more with companies and become mission critical and help them with the return on investment, high impact in terms of what they're trying to do, whether it's visitor acquisition, visitor conversion, or increasingly monetizing all of their assets. As I take a step back and reflect on the Creative Cloud journey and what we've accomplished over the last four years, as you know, when we embarked on this Creative Cloud journey, we had a couple of key goals associated with it.
The first goal was to make sure that we innovated at a more rapid pace. We saw what was happening with technology, the move towards mobile, the move towards the cloud, as well as the significant advances that we saw on the desktop, it was really important for us to think about reimagining the entire creative process to take advantage of all of those technology trends that we saw. The second key goal that we really had for ourselves was to make sure that we were attracting new customers to the platform, the next generation. As David will talk about, we continue to see approximately 20% of the people who are using Creative Cloud as being first-time users of a product from Adobe. It's great that we're attracting that next generation of consumers.
We've also talked about the fact that one of the things we really wanted to address was combating piracy because a lot of our software is pirated around the world, if we deliver all of this technology as a combination of desktop as well as what happens with mobile apps and creative services, it's going to become increasingly hard for people to take advantage of our product without paying for it. As this morning's announcements hopefully showed you, the rapid pace by which we're innovating is actually faster than what we used to do when we had the 12 or 18-month traditional product cycles. What that means, honestly, is that it's much harder for smaller companies who have point products to compete with us. We have effectively provided this significant technology moat with the pace of innovation in order to serve the entire creative community.
The updates are not just incremental updates. I mean, we had a release in June of this year, but if you look at what we did with the release just now, it's very significant updates, as well as a brand-new customer Creative Profile, which enables us to really tie together what people are doing in a location-independent way. David's going to talk a lot about that as well. The other thing I'm particularly pleased about this week is we've always mentioned that video is an area of focus for us as well as an area of growth, we had targeted competing with companies like Avid as well as Apple at the high end, it was really nice to see that Gone Girl, which was the product that was released earlier this week, it was completely done in Premiere Pro.
We continue to make sure that we're going to get traction, not just at the creative community, but even at the high end with video. We've really expanded the value proposition. The whole value proposition when we started was desktop software. We feel so good about what we've done with mobile today, that we've actually taken the traditional desktop product names because the bar is so high, products like Illustrator and Photoshop and Premiere, now we're delivering them on mobile devices. It was also really nice for those of you who are here to see what we did with touch. We think touch is a brand-new paradigm that will enable us to engage more effectively with our current customers, as well as to attract a brand-new set of customers.
In conjunction with Microsoft, we showed a version of Illustrator that's actually available for download today for our creative customers that completely redefines what the user experience can be for somebody who's working on a touch device, and honestly, far more intuitive because the ability for them to actually use touch and a stylus is far more natural than the ability to use a mouse. The other thing we continue to do is in addition to desktop and mobile apps, we recognize that the entire world is social and it's networked, and the ability to have this entire community, the creative professionals, that are not just exchanging their projects, they're not just collaborating, but really enabling a whole new era of commerce among this creative community. Again, with what we announced around the Talent Search, David's going to touch on that.
The other thing we're doing is while we've been embarking on this journey of innovation with the creative, we've also had to radically change our go-to-market. I'm pleased to let you know that all of the heavy lifting is now behind us because whether it's the channel partners, whether it's the affiliate marketers, we now have one go-to-market that's all focused on the Creative Cloud, whether that's the individual offering, whether that's the team offering or whether that's the enterprise. Execution around all of that, marketing around all of that is across one offering. We feel good about how we've effectively managed that particular transition. I think the key message that I will say as you look at this journey is that we really believe that the best days of us are still ahead.
We think we're incredibly well-positioned with all of the heavy lifting we've done on the product side, on the go-to-market side, and the messaging side, we're going to continue to redefine and reimagine how creative works, how we can advance the state-of-the-art. What's happening with hardware and software is particularly exciting for us. New input devices, what we can do with audio, what we can do with motion. The partnership again today that we showed with Microsoft actually shows the power of how you can use cameras as well as audio input in the entire creative process. I think the message for you as investors is we have really created a very, very significant creative platform that includes the best of desktop, the best of mobile, as well as services, and really leverages the cloud to solidify our leadership in the community.
The goal here is to continue to attract new customers to the platform, to ensure that the customers who are on our platform continue to be retained at a high rate, as well as to provide, as David will talk about, new value expansion services as well as market expansion services. We feel really good about what we've done. The other thing we talked about today that I'll briefly touch on is in addition to what we can do on the innovation side, we want to make sure that we embrace the entire capability of the ecosystem to innovate. We introduced a new SDK as part of the platform that enables hopefully hundreds and thousands of developers to now develop on top of our platform, and all of that benefits again accrue to Creative Cloud members.
Last but certainly not the least, I think the thing that gives us a lot of confidence about this business is that customer satisfaction associated with the Creative Cloud continues to be higher than what we were able to achieve with the desktop products, which was significantly higher than most other companies. We believe that that all goes well for driving new customers, ensuring that we retain the customers as well as driving growth in that business. All of you know, we also have a really great franchise with PDF, and what's really happened is PDF and Acrobat continues to be de facto standards for collaboration and workflows. I like to say that PDF has won, even with mobile devices, the amount of content creation that's happening on mobile, the amount of content sharing is happening.
I think we have a unique opportunity to take all of the assets that we have, what we've done with Reader Mobile, what we've done with Acrobat.com, and deliver a really integrated offering around everything that we have to do with document workflows. We have a major product release expected in FY 2015, and what that does is bring together all of our desktop product, all of our mobile products, things that we've done with Mobile Link that enable you to share your Acrobat file seamlessly across devices, as well as to make sure that we integrate new services, not just create PDF, but also all of our signing services. I think the message here is we have real permission right now and a franchise to expand our footprint and extend our brand. Again, we're pretty excited about what we are doing with our release in fiscal 2015.
The Marketing Cloud journey has also been a really interesting one. All of you know, this was a business that didn't exist within Adobe a few years ago. We just saw this unique opportunity to bring data together with content to create value for our customers. We're pleased with the fact that we've built over a $1 billion-dollar business in this and become leader in what I think all of you would acknowledge is an explosive category, namely that of digital marketing. What we've done, I think, is through a combination of both strategic acquisitions as well as organic innovation, we've provided the most comprehensive offering right now in marketing that exists through the Adobe Marketing Cloud. The newest acquisition in our portfolio, Adobe Campaign, is off to a really great start.
What we are now doing, much like we did with the creative business, is in addition to having best of breed with each of the solutions like Adobe Experience Manager, Adobe Analytics, Adobe Media Optimizer, we're really investing in these core services, and Brad will touch on this, as well as a platform that we believe will provide unique differentiation and opportunity. The two things in this space that I'm particularly excited about, the first is a product that we're working on which allows us to do marketing mix optimization. The key challenge that I think most marketers still have is while they are investing marketing across multiple different media types, how do you aggregate all of that data and really truly understand the return of investment in that particular space?
The second thing we're certainly investing in a large way in the Marketing Cloud is to make sure that all of this data, the fact that we process over 20 trillion transactions, that we're really investing in data as well as algorithms as well as visualization to enable this all to be actionable by our constituency, which is the marketers. What's happening in the space that's really interesting is while CMOs were really the pioneers in using this content and data to drive these personalized and targeted experiences, we're clear that this opportunity is no longer just about marketing. Because every consumer, whether you're working with a retail outfit, whether you're working with travel, the expectation that customers have is that they get this single unified experience across all channels.
I think what we have a unique opportunity to do is for any customer engagement that enterprises are trying to achieve, that we become central and indispensable to the technology stack that they implement in a particular enterprise. We believe that we have tremendous momentum in this space. We've been organizing events all around the world, and virtually every one of them, the ones that we do in Utah, we've done one in London, in Singapore, in Sydney, they've all been sold out, which actually I think just demonstrates the enthusiasm among our customers for a solution and the need for such a solution in the marketplace. The other thing we've been working on which I'm pleased about is we recognize this is an ecosystem.
In order for us to be successful in this space while we focus on the marketer, if we think about what's going to happen in the real-time enterprise, other software vendors, systems integrators, as well as digital agencies, are going to be natural partners in our strategy to make sure that this becomes even more central to what is running in the enterprise. Maybe I'll just talk on three partnerships. The partnership with SAP was all about making sure that our technology works with SAP to provide that unified interface. The partnership with Publicis is as a leading digital agency, they are standardizing on our stack and making sure that our stack is the stack that they use to sell.
Then the partnership with Wipro, who's a leading systems integrator, and what's exciting about that one is they've actually established, like I think everybody else is doing, a brand-new digital practice to focus on implementing Adobe solutions. It's not just Adobe that's focused on this. It's an entire ecosystem now that's working on this. While we like to talk about Adobe as Creative Cloud, Marketing Cloud, and what we are doing with document services, I think the reality is to our customers, we're rapidly becoming one Adobe. We're becoming mission-critical. What Matt has done with the field organization and Anne has done in terms of marketing is to make sure that we represent this as one comprehensive solution to our customers. I think the key challenge that they all face is how do they fundamentally use digital to transform their business.
What you see on the slide in front of you is a little bit of four examples in different verticals of how customers are using our solution. Certainly, the one that you're probably most familiar with on the reimagined creative side is every single media company is being transformed, and we're helping them transform their businesses. Because from creating content just for print, they're now creating content for print and for web and for mobile. They're all investing in video, and they all want to monetize all of these assets across all of these media types. While Condé Nast is the customer that we're highlighting here, this has been true of every single publishing company. We're becoming more mission-critical.
They use Adobe Analytics to understand who's actually consuming that data. They're increasingly using an Enterprise Term License Agreement of Creative Cloud in order to be able to deploy that across their particular enterprise. Transforming commerce. There isn't a single company, especially that in retail, that isn't thinking about how they move their commerce online. I think we all know that the Adobe Marketing Cloud is an essential ingredient or a critical engine for all of these commerce websites, whether it's acquiring visitors through our Adobe Media Optimizer, whether it's actually providing the compelling user experience through the Adobe Experience Manager, or whether it's actually converting them to paying customers through Adobe Target. What we are really helping them do is increase their conversion and lower their cost of customer acquisition. The ROI is evident. Again, Brad will talk about that.
The customer that we talk about here is Under Armour. What Under Armour is doing, which is very interesting, is they're using us not just to create this personalized commerce experience on the website, but they really have this vision to move upstream the entire design-to-build process. Again, that's true for what Under Armour is doing, but I think it'll be true across many industries, as well as Nike. In transforming customer engagement, I think a good example of what you see here in the multi-channel space is how the expectation from all of these enterprises is they provide a unified customer experience across multiple channels.
Delta Air Lines, as well as other travel agencies and travel airlines, recognize that if you're trying to create your reservation on a website, if you're trying to look at it and check in on a mobile device, if you're looking at it in a kiosk on a terminal, or in fact, in the screen in front of you when you're sitting on the seat, you want that experience to be exactly the same. That's where a company like Delta is using our entire set of products to enable that multi-channel experience. Last but certainly not least, we highlight ESPN here.
Again, every company is thinking about video because the expectation is that with the explosion of what's happening with video and all of video moving to IP networks with products like Adobe Primetime, I think we're uniquely positioned to deliver that video content, to help them understand who's actually using it, to segment their users so they can, in effect, drive higher advertising and higher ROI. I think early days in the video space with TV Everywhere, we really have all the capabilities from creation to monetization. I think this story gets played out with every single enterprise. Everybody is thinking about what their digital transformation story is, how do they move online, how does mobile impact it, again, we're in a very unique position to deal with this.
I think this slide just shows a number of the marquee customers that we have, again, across virtually every vertical you've asked us in the past, which verticals are you focused on, retail, automotive, media and entertainment, telecommunications. You'd be surprised, even in government, as government is increasingly moving towards providing all their citizen-facing services online, we're seeing a fair amount of traction with our Adobe Experience Manager solutions, and certainly every single consumer brand. I think the message for all of you is our level of engagement with all of these is becoming even more strategic than ever before. As we think about where this goes, we have three really successful businesses with what we've done with the Creative Cloud, what we've done with document services, as well as what we've done with the Marketing Cloud.
I think our growth platform continues to be really focused on this core area of the confluence of content and data. We think that whenever content and data come together to drive this targeted, personalized experience, again, as I said, whether it's for a website, whether it's for conversion, whether it's for understanding what media audience is consuming content, I think that's our sweet spot. Mobile is driving a real sea change in this, and that's why we call it out on its own. What's happening is we've just delivered the tip of the iceberg today. We're using mobile in the creative process, as you saw with MAX. We're creating increasingly all of these mobile apps that people are doing. We're analyzing what's happening with mobile marketing as well as the mobile business for every enterprise.
I think this is just going to be a continued tailwind for us in terms of where our business goes with the creative as well as the marketing business. Last but not least, a robust ecosystem. We think that's really essential to our strategy, and I touched already on what we are doing on the go-to-market side, on the Creative Cloud, whether it's with our channel partners or the affiliate marketing, on the Marketing Cloud with what we are doing with digital agencies, systems integrators, as well as software companies. All these broad ecosystems, as we continue to build it, we just think it leads to further penetration within the enterprise.
As I reflect on what we've done over the last few years, I really think we've done a great job of transforming our business, and more important, the nature of our relationship with customers. With Creative Cloud, we've spearheaded a revolution to subscription, where frankly, we're now being copied by every single company in that particular space. We've expanded our strategy to look at adjacencies and white spaces with offerings like the Marketing Cloud. What that means for us is we're becoming more mission-critical. We're increasing the available market, and the available TAM for creative business has doubled, and the available TAM for the Marketing Cloud has probably grown tenfold. Again, Brad and David and Mark will show you some of those numbers. I feel really pleased about our execution.
What we've done in the past few years and the focus on execution, we continue to be on track with the long-term goals that we've set for ourselves and that we've outlined to you as a company, and our markets are big and growing. I just continue to believe that our opportunities, as long as we execute against these strategic objectives that we've talked about, they have never been greater. What I'd like to do now is have David give you a little bit more insight into what we are doing with the Creative Cloud.
Thanks, Shantanu. All right. What I'm going to do is I'm going to spend a little bit of time giving you some data based on what we're seeing as the business has been transforming. I'm going to do a recap of some of the announcements from this morning. I think many of you were at the event this morning, but there are a number of folks that weren't, so I'll do another recap of that. Then I'll end with talking about how that work is starting to have business impact and why that's driving the core elements of the business that we've been talking about. Everyone marks time differently. If you're in the creative business, you mark time based on the number of MAXes you've been at.
If I think back to the last MAX, I don't know if someone can turn down the mic or maybe I need to move it a little bit further away. I don't know if that helps. Can you guys still hear me? Okay, that's better. If you think back to the last MAX, we had a very different creative business than we do today. If you think about the launches we had at that MAX, it was almost entirely a desktop-focused set of announcements. We had a number of promises for services. There were very few or no mobile apps that were part of the story. You fast-forward to now, and we have such a rich ecosystem that we're talking about.
Now, really, the number of times you hear CS6 even mentioned, or as Shantanu mentioned, in our partner ecosystem, we've pulled CS6 out of that ecosystem as a whole. We really feel like we've moved on as a company, and it's really bearing out in the numbers. If you look at 2012, 2013, 2014 estimates, we're talking about effectively 10x growth in these businesses. We expect to end this year at roughly 3.3 million paid subscribers. We've talked about our $1.925 billion in terms of our expectations for ARR, and the payoff of all this is obviously the flow-through to recognized revenue. This is a flow-through for the entire business.
Now at the end of this year, we expect to see roughly 60% of the revenue that we report coming from recurring sources. We feel really good about that migration, how it's going. Now, if you double-click and you look at the creative business alone, it's a much more advanced story. We have 2.8 million subscribers now. We talked about this in the past. The vast majority of them have been signing up for the annual plan. Well, that's still the case. We still have 97% of the members on the annual plan. This next number is one I look at very closely, which is the amount of these subscribers that are transacting business on adobe.com directly. That is 76% of all the subscribers are now doing business with us directly. That gives us a much richer engagement with folks.
Recognized revenue, if you look at the creative business, that's now up to almost 90% of the revenue we report coming from these recurring sources. The other health of the business stat that I look at is how many people are buying because of the subscription model, and they wouldn't have bought in the old world with perpetual, and we have a very consistent number here for the last couple of years, 37%. What that tells me is that the model is working, it's attracting new customers, it's helping people migrate over, and one of the leading indicators of the success of the business that we've talked about in the past is to look at the number of units we're transacting in any given year. If you look at 2014, it's going to be by a significant percentage, the highest number of units we've transacted in a year.
We feel really good about the progress we're making there. Now, of course, that progress is predicated on a rich set of offerings and businesses. Let me take you through the announcements we made today and also in the June event. As Shantanu pointed out earlier, today was a big deal for us. We had a lot of big announcements. What that should sort of indicate is that we're fulfilling the promise that we've made to our customers around this idea of continuous innovation.
When we made the move to the cloud, that was probably the single largest commitment we made was that we were going to accelerate the innovation, not just in our desktop applications, which we have done, but we were going to start to look at a much broader canvas that we could work on to help our customers. This was really, in my mind, one of the watershed set of announcements today. There was a marked difference in terms of the keynote and how we walked through the day compared to previous years. You will notice that the amount of time we spent on the desktop app section was much shorter because the desktop apps were just part of that broader story. They were in the mobile apps. They were part of the Creative Profile. They were part of every aspect that we talked about.
Let's walk through and I will just update everyone on the core announcements that we had. The first thing, obviously, the CC desktop applications. Now over 1,000 features have been added since CS6 across device formats. Lots of work in performance because the new hardware that is coming out is giving us an opportunity to accelerate the work that we are doing in the heavy lifting and the algorithms and the processing. Tons of productivity work and always have a little bit of that Adobe magic that suddenly makes something that was previously impossible, possible. Those are really important drivers for migrating customers, of course. Touch support, this is a big deal for us too, because as you saw the work we are doing with Microsoft. Touch was something that was always on a disparate device. It was on the mobile device.
The fact that we can now bring touch and all of that richness of interaction to our core desktop applications means we can open up a whole new frontier in terms of innovation, and the teams are really going through this quickly. We showed Illustrator, but we have also touch-enabled Photoshop, Premiere, and After Effects, and you can expect to see much more coming down the path in the next few months and years. Service integration, Shantanu touched on this is a big deal because first of all, it helps the customer and it makes a big difference in terms of how everything connects up. All the services connect up and it makes the whole workflow much more rich. The other thing is services that are integrated into desktop apps cannot be pirated.
As we integrate Creative Cloud Libraries, as we integrate Creative Market, as we integrate Typekit, as we integrate all the service offerings more deeply into the fabric of the desktop applications, it certainly helps with that story. Moving on, the next set of announcements we made was around our mobile applications. 14 Creative Cloud-enabled mobile apps across imaging, illustration, video, taking on the names of their desktop counterparts. This is a big deal because what it says is that these are the mobile apps that we are betting on for the future. The technology in here, this is the point I made earlier this morning, is this is the same technology that is running on our desktop applications. It is not an approximation. That was a big deal.
We launched some of these at our June event, in that rough period of time, we've already received 6.6 million downloads of these applications. Clearly an opportunity to go and reach a much broader audience than we've had. Really, we haven't done a rich amount of marketing around these. We're just ramping this stuff up. Mobile SDK and our Aviary acquisition, a really big deal because now we can start to leverage the thousands of developers that Aviary had, the tens of thousands of developers that we can bring into the ecosystem based on our network of connections. What that's going to do is it's going to allow us to work with the developer community to build niche applications that reach audiences that we wouldn't have reached otherwise.
Every now and then benefit from some of those hits that happen on mobile every now and then. The key value driver for us here is are they signing up with an Adobe ID and bringing more users into the ecosystem that we can work with? That's the foundation of the Creative SDK. Next up is community. We announced that we have over 4 million members in Behance, up from what was a million at the acquisition, which was just over a year and a half ago. 400,000 projects are published every month. This is a big deal because as we talked about earlier, when recruiters or creative directors come looking for talent or you look at a measure of the vibrancy of the ecosystem, it's these portfolios that speak volumes, right?
It's about the work of the community, to see the increasing pace of publishing of these portfolios makes a huge difference in terms of the ongoing engagement of the community. Speaking of that, while we have 4 million registered users, we have 25 million users coming on a monthly basis. This is another pool of people that we can start to pull in and draw into the broader ecosystem that we're working with. Part of what's driving this growth is that while Behance was founded on the idea of a creative individual, we've been adding more capabilities to it around teams. We see teams from large organizations like Adobe and Google and others that are creating team profiles on Behance and sharing work and attribution. We also see more and more small startups coming on board to showcase their work.
That's creating a much stronger, richer viral loop and pulling more people into the Behance community as well. Next up, Assets. With Assets, we talked about the fact that we're moving beyond file storage. One of the areas that we've always had, or we've had for about a year, is the ability to do basic file synchronization, something you'd find in Dropbox or Google Drive or any of these other file synchronization technologies. The thing is that for creatives, the real power comes when you go beyond the file, because there are lots of elemental creative elements that need to flow throughout the creative process, whether it's your files, your fonts, your photos, your brushes, your shapes.
As a result of all of that being part of the ecosystem that we manage with Assets, we're effectively creating an asset management system in the cloud that integrates deeply with the apps, both the mobile apps and the desktop applications. That makes the whole system much more seamless and the frictionless creation really can take hold. These work across devices. This is the same infrastructure. This is a really important point. This is the same infrastructure that we work with on the digital marketing side of the business, the AEM foundational aspects there. That makes it much easier as we bring these two clouds together, and we'll talk about that in a minute.
As we bring these two clouds together, we start to see the potential for these assets to flow, not just more seamlessly within the confines of the creative users, but also migrate over and work with marketers. That's a big deal as we see the marketing departments and the creative departments are inextricably tied. Last but not least is the market. We've talked about this in the past, but we've talked about it really in a little bit of a passing way. We took another big step forward in the last couple of months here. First around Asset Marketplace. We've gone to the Behance community. We've attracted tens of thousands of assets from that community. We've put it in something we call the Asset Marketplace, and we started to offer that to our Creative Cloud members.
We also have training content that we've been starting to aggregate more and more. We of course have thousands of fonts that we put into this asset market as well. When you put all of that together, it's great to see the impact it's having. It's great to see the usage, and clearly an indicator that the creative community is interested in more from us in this space, not just in terms of the creation of the content and the assets, but the more we can actually harness the rest of the community to give them assets that jumpstart a project makes a big difference. App Marketplace, this is something we've been in for quite a while. We have thousands or tens of thousands of plugins to our desktop applications.
The cool thing now with the Creative SDK is we're going to start to see hundreds or thousands of applications developed by third parties that are adding value to the system. The ability to help merchandise those third-party applications that add value to the Creative Cloud ecosystem and work with the content stored in the ecosystem or put more content into Creative Cloud, those are the areas that we're focused in terms of the app market. Of course, the latest announcement today was around creative talent. Again, hundreds of billions of dollars being spent on creative talent. It's a highly inefficient market today. Hard to find. If anyone has actually tried to hire a creative, they're in amazing demand, and it's really hard to find creatives that are available to work on your project.
The focus of this is really to drive a much more streamlined approach to hiring and onboarding creatives. The last thing we introduced is possibly the most important thing, which is this idea of a Creative Profile. It's your Adobe ID, and it gives you access to everything I just talked about so that it's your login and utilization model for your desktop applications. It's how you access your mobile applications. It's how you access the market and the assets. What this does is it connects all of those things together so that you can now start to work more seamlessly across these as an individual. You can actually work across these as teams as well, both private teams or part of the broader community. That's a lot of value that we're giving to the user.
What it also does is it starts to create an audience segmentation that we can use to both personalize opportunities to users. In other words, give them training. If we see them using a certain feature, give them training or other sort of messaging that gets them to use other features to drive active use. It's also useful for messaging and marketing to upsell and retain users. We'll talk more about this in a minute, but the Creative Profile really unlocks a lot for the users and the value that they get, but it really unlocks a lot for the business that we're driving as well. As a quick reminder, all of this stuff is available to our individuals, our teams, and our enterprises. Individuals get all of this, including 20 GB of storage.
As you step up to the team offering, you start to get centralized deployment tools, you get admin console and more ongoing support. As you step up beyond that to enterprises, we're working to give enterprises federated ID, more secure assets so that assets aren't necessarily solely stored in the public cloud. We're working on private cloud and on-premise solutions, and we're integrating with AEM Assets so that AEM Assets that are stored as part of the Marketing Cloud can be accessed, leveraged, updated directly from the Creative Cloud products themselves. That's an overview of the offering and the progress that we've made on the product side. If you remember back to the FA meeting in March, I think it was, we talked about how we think about framing up the business drivers for the ecosystem.
We talked about migration, taking that install base that we have and moving them over. We talked about value expansion, which is as we move them over, that core base, we can provide a lot more value. Providing more value and increasing the ARPU for that base. The third is market expansion. Everyone is creative. As a result, we believe that there's an opportunity to reach a much broader audience, than we've ever reached before through some of the actions. Let's walk through each of these, and I'll give you a few examples of how the product work that we're doing ties off to the business opportunities here. The first up is migration.
The first one is the most obvious one, which is that this continuous innovation cycle that we're in, the more we're updating with these big releases that people are able to see significant innovation, the more we wake up the base. Every one of these releases that we have reaches back into our CS3 customer base, CS4 customer base, and says, "Maybe this is the time I should pay attention. I should try this out and buy." That ongoing innovation is increasing our engagement with older members of the install base as well. The second thing is that what we are starting to see as we start to be able to track and understand how people are using the software for the first time in an end-to-end solution, we're able to start to see what drives conversion and what drives retention.
If you look at things like community, if you look at things like stock content, you look at things like training, those services that I was talking about earlier, we're seeing a nice correlated response between what is utilization of those services and increasing conversion or retention. You connect that back to your Creative Profile, it lets us personalize and really target people to drive conversion and retention. Next up, obviously, is the channel partners. As we've been working with our channel partners and affiliate programs, we're seeing an increased focus now on Creative Cloud as we've removed CS6, it's also opening up the door for us to reach customers through new ways.
Whether it's someone like Canon or Lenovo or Wacom, the opportunity for them to refer people to Adobe, do an affiliate relationship is driving a new set of partner ecosystem conversations that are driving more traffic and opportunity for us to convert users. The last thing is the pricing model alone, just the move to subscriptions. We continue to see more people from the install base saying, "Actually, because of this, I am willing to migrate," whereas otherwise, the cost of an upfront upgrade payment would've been too much. All of that is driving migration. You look at value expansion, the key element here is that we are planning on making the right content and service and value available at the right level. We're starting to create more separation between the tiers.
If you look at what we're doing with stock content, for example, it's available at the higher full-priced tiers of Creative Cloud. It's not available, for example, in Creative Cloud Photography. As people are coming on board and they're using Creative Cloud Photography, if they start to access some of the market assets that we merchandise as part of the natural flow, it's an opportunity for us to say, "Would you like to upgrade and would you like to upsell?" Really start to tune into this idea of a data-driven marketing organization. That's how we're evolving, that's where we're going. Talent Search, that's a great example and probably the most direct and obvious example of ARPU expansion. The cost of that is $1,500 per month. A significant increase in terms of the other price points that we have in market.
It's very similar to the LinkedIn model. The way we think about this and talk about this internally is it's LinkedIn for creatives. What we have is the ability for someone to come as a creative director or a recruiter, join self-serve at $1,500 a month and start hiring people. There are some rate limits, like you can run at maximum three searches. You can have only a certain number of communications with people you're trying to hire during that period of time. If you trip over those, it trips over to a higher touch sales opportunity that we work with Matt and team on. Then, of course, Creative Cloud and Marketing Cloud integration, in particular around AEM Assets.
As we integrate these clouds more and some of the work we've done recently with AEM Assets infrastructure connecting to the Creative Cloud, that represents more direct upsell opportunities in the enterprise too. All of these is how we think about the idea of taking and actually providing more value and bringing more ARPU and/or revenue to Adobe. Last but certainly not least is market expansion. As Shantanu mentioned, we continue to see about 20%, just over 20% of our user base is new to Adobe, which is nice to see because that's been consistent. If you recall, I think it was probably two years ago that we first shared this stat with you. That's roughly where the number was. It could have been the exuberance of this offer for the first time being available at such a low onboarding price.
The good news is that this seems to be a renewable resource, and we are able to pull this consistent number in from new places. I think we can do better. As we look at Creative Cloud Photography Plan, at that price point and that value for the first time, we can start to go after the install base of Elements users and our install base of Lightroom customers and pull them in to the franchise also. We can start to merchandise to people that are coming in from some of our mobile apps, because at that price point and that value, it's a really reasonable step function for those. Speaking of mobile apps, as I mentioned, we launched some of these apps a few months ago in June. We've already generated about 600,000 new Adobe IDs.
Those IDs are now top-of-funnel conversion marketing mindset for us, and we can go after them with messaging and value that is going to dial into the right model for converting them to paid users. Of course, we think that that can be even further expanded by utilizing the ecosystem of Creative SDK. Okay? You put all of that together, and probably the single most important thing to take away from this is how we are evolving our go-to-market. The Creative Profile is at the center of how everyone's engaging with these applications. It allows us to create a really thoughtful audience segmentation of all of our users that we can drive more value to them, but we can also do much more data-driven marketing as a result.
Focusing on how we get them to engage better, meaning how do we get them to retain better, focusing on making sure that the value drivers that they use during a three-year trial period helps convert them, therefore getting a higher lifetime value from these customers. We're obviously heavily dependent on and using our own Marketing Cloud. Brad has given me a special price on that, so we're leveraging that every chance we get, driving active use. That funnel and that motion is really starting to take hold. Now, it's obvious how this works in the individual segment, right? This is how we think about in terms of Marketing Cloud, we've also been really happy to see how this is making a difference in our SMB segment. Over 30% of team units now and trending up, are transacted on adobe.com.
Even in the team business, we're bringing that business direct to Adobe, again, that gives us a much stronger relationship and opportunity to continue to merchandise and drive. Even in the enterprise business, we're finding that a lot of enterprises, as they're considering the move over, you can very easily see pockets of people coming in and trying the product. It's become a really good lead generation source for us as well. All of this data-driven stuff, I think, is going to get even more fuel thrown on the fire with the mobile apps and the Creative SDK that we just talked about. Okay? Continuous innovation across desktop, mobile, and web. That's the engine that lets us stay connected with our existing install base.
New services are both extending the value and driving higher retention and conversion, things like Talent Search and market assets as an example. Becoming a true world-class, data-driven business, becoming a much more efficient business in the process. Strong migration of the install base and new customers, we continue to see that continue. Really good growth in all segments, individual, SMB, and marketing, heavily dependent on using our own Marketing Cloud to drive the growth of this business. With that, I think we should talk about our Marketing Cloud.
Great. Thanks, David. I feel like a little bit that I'm coming into Adobe MAX, and I'm about to interrupt your regularly scheduled program to talk about Adobe's other billion-dollar business. Brief commercial break here as we talk about this. I thought the discussion this morning on the re-imagination of creativity was fantastic. For those of you who were at the Adobe Marketing Summit in March, you'll remember that the theme of that conference was around the re-imagination of marketing. I was struck last week, I was in New York at a Fortune brainstorm dinner that we had jointly hosted with Fortune, the theme of the dinner was marketing re-imagined. This re-imagination theme has really caught hold. We did a survey, what, Anne, a couple of months ago, Digital Distress ?
Where we went out and we surveyed senior marketers and we asked them a few questions. First question we asked was, "Hey, do you think that marketing is going to change in the coming years?" 80% of marketers said, "Yes, we're going to see massive change in the next few years in marketing, how we do our jobs." The next question was, "Do you feel like you have the skills that you need in order to kind of drive that change?" Less than about 40%-45% said, "Yeah, I feel appropriately skilled." The question really was around reinvention. Do you think you need to reinvent yourself? Roughly 40%-45% of people thought that they needed to reinvent.
Less than about 14% of the marketers came out and said, "I have a clear path to reinvention, that I know what I need to go do." This is really the opportunity. The other interesting note, think about this as a profession. Less than half of the marketers in that survey actually said they feel proficient in their jobs. Think about any other profession. You go see your doctor, "Hey, are you actually good at your job?" Less than half are saying, "Yeah, actually, I'm not that good." Let's see what your probability is of getting the good one. Whether it's doctors, architects, you go across the board.
These are professionals, and they're saying, "I'm actually not good at my job." This is the opportunity I think that we see for Adobe, is to really insert ourselves not as just a technology provider, but as bringing the community together to engage, to train, to learn, and to really drive that re-imagination. Because what's happened is the digital lifestyle has become all-encompassing. We see this, you guys are living this as you're here with multiple devices. No matter where you look, if you're wearing your consumer hat or you're wearing your business hat, your digital lifestyle is there. Brands are now interacting with you in a completely different way. The mix between, "Hey, I'm in my digital world today, and now I'm in my offline world," it's gone away. You've seen a complete merge of those two lines.
The opportunity for marketers has never been greater, but it certainly has been a challenge, and I think our marketing customers are seeing this. This is the opportunity that we're executing on. This is what's powering our business. If you look at where we are this year, our bookings growth is up over 30%. Year-over-year, we're continuing to see strong business. I'll talk about the offering and where we're seeing particular strength. We've been very, very pleased with the engagements. Now, a couple things. I would say over the past few years, the level at which companies are committing to Adobe in the marketing space has elevated significantly. You see on the slide a few data points that we wanted to share around that, around these big commitments. 84% growth in contracts over $1 million. 24% of those contracts include multiple solutions.
You've got 40% growth in the segment over $500K. Really large customers making significant commitments to Adobe in this space, which we feel great about. In a minute, I'll get into the product categories that I think are driving some of this. I wanted to do a little bit of a retrospective. Adobe's been in this business since 2009. We acquired Omniture, we've kind of gone through this. This business, even in the last three years, has changed. For me, where we are today, where things are starting to come together in a platform, it was almost a decade ago that I was in a room all by myself writing an S1 document saying, "Hey, there's this thing called an online marketing suite, and it's going to come together. It's going to start with data. It's going to include content." That was a decade ago.
That's how long it's really taken, I think, the industry to get to the point where there's recognition that, hey, a platform needs to exist, and what should that look like? That's where we are today. In our business, it was $600 million three years ago. We've doubled the business. Transactions. Really big numbers here as you go from 6 trillion to over 25 trillion transactions. 25 trillion, it's hard to even get your head around what does that mean? In terms of scale, if you look at Twitter and you take all of their posts, all of their searches, all the tweets on the platform, this is about 20 times bigger than what Twitter will probably do this year. You take all of the times that each of us, everyone in the world, swipes a credit card transaction.
Anywhere you are, anytime you buy anything, whether it's a buck or whether it's much more than that, the number of transactions, you add that up over the world, this is 100 times bigger than that. You start to think about the level at which we're playing and the scale at which we're playing, that's what you're seeing happening inside the Marketing Cloud. Mobile. Mobile has exploded in our business. The mobile app analytics traffic, this is only one part of our business where we're specifically calling out mobile here. We've seen dramatic growth, and you're starting to see our business change from a desktop marketing business to a mobile business, much like David talked about this morning in the Create. We used our customers almost to the point where they didn't know what to buy or how to buy it.
They'd say, "Hey, I want to run a marketing campaign. What do I need?" We would say, "You need these 75 SKUs, and you can only buy it on Tuesday after 4:00." It was really hard to transact business with us. We went through a massive simplification, and that's where we ended up with our six solutions with 12 SKUs. You go back to the metrics we showed you on the first page with the large deals and how big they are and the size of those transactions, it's basically a direct result of this simplification effort because it's driven clarity of how I should interact with Adobe, a focus in terms of what do I need to accomplish, and it's shown that we are serious about integration.
The Adobe Marketing Cloud is not going to be a collection of products that are on one page and that is sold by one company. We are pursuing an integrated philosophy to bring these together so you can run integrated marketing campaigns. That is the strategy, and that is what we are doing. Really, really fun to be a part of this over the last three years. It has been really a journey of a lifetime for me and my team to experience this and I think be at a unique inflection point at this time in the market. We are also very pleased that from a product standpoint, we are called out as leaders really in many high-growth categories.
I get asked by many of you, "Hey, Brad, who are you competing with in the Marketing Cloud?" The fact of the matter is, over the last three years, there have been very few RFPs that have been issued saying, "Hey, I want to buy a Marketing Cloud." The fact of the matter is the nature of competition has still been in individual product segments. It is very important to us that we are not only best in class at this overall platform, but that we are best in class at the individual product level, and we have had a very good run over the past two years, really, whether you look at analytics, content management, which have certainly been areas of strength for us, and those are called out. One specific call-out, look at cross-channel campaign management. This is the acquisition that we did with Neolane.
This is basically a new ranking that had come out and looked at what we were planning to do with that product and what role it is going to play. The exciting thing is we are called out as a leader, and we have just in the last quarter started to see multi-million dollar replacements of ExactTarget, Responsys, Eloqua, really across the board from an automation segment. We are a leader in cross-channel, so we can do email plus plus plus, all the way to you want to still send an offline catalog, we can help you do that. Even in email-only transactions, we are being very successful competitively. Excited about where that business is headed. We have also talked about our install base, this land and expand strategy.
We wanted to show you a slice of one of our customer segments, our top 100 accounts, and how they are transacting business with us. A full two-thirds of these accounts now use more than three solutions. In the Marketing Cloud, we have got six solutions. They are using more than three, which has been massive growth year-over-year. On average, those people are committing to pay us from a revenue standpoint about $2.75 million per year. That has grown dramatically. Really for us, the couple things that I would take away from that is we have been successful in penetrating well beyond a single point solution. We have gotten these multiple solutions orchestrating together, but we still have a lot of opportunity to still go grow in those top accounts.
Now that we can replicate this, we can now start to do this in every vertical where we're leaders. You look at industry verticals, nine of the top 10 retailers are standardized on the Adobe Marketing Cloud. They might be using one solution, they might be using six. We have an opportunity to not only drive usage of the products they're already using, but we can go cross-sell all these other solutions. No matter what vertical you look at, it's the same position. Five of the top five car manufacturers, five of the top five media companies, financial services companies, no matter where you look, the Adobe Marketing Cloud is already well augered into that media or that vertical. Let's keep moving on here. Okay.
In terms of market opportunity, this is roughly the same numbers that we showed you in March, $21 billion market opportunity. Fast-growing market. I think the takeaway for me here is every time I think the market is maturing, something new comes up to where, hey, another growth opportunity, another adjacency, another opportunity for us to integrate these things better and attack the market. This is a macro growth trend that's not going to play out over the next one to two years. It's really a 10-year growth cycle that I think that we're in. Where we are today is our approach is differentiated. I wanted to spend a minute because another question I often get from you is, why are we winning? What's our approach? What's the belief system that's behind the Adobe Marketing Cloud that's driving differentiation?
I wanted to call a few of these out. Number one, brands have now figured out that the customer, the consumer, is at the center of everything that they do. It wasn't long ago that brands could say, "I'm going to impose my product, even my internal organizational structure on customers. I'm going to basically talk to them, not expect them to talk back." Those days are over. The customer is now at the center. They will tell you what their expectations are. They will tell you what they want to see from you, and they have to be put at the center. That means their profile. We just talked about the Creative Profile. Similar to that, across any industry you look at, the profile of the customer is at the center. Also the context of the user. Are they on a mobile device?
Are they on a desktop? Are they on the move? Are they on their mobile device on Wi-Fi? All of these things in context are important in terms of what that experience is going to be. That brings me to the second one where we focus and we're differentiated is, it is about the experience. Brands today, your entire brand experience may be a mobile app. You think about companies like Uber, Nest, Fitbit. How many times have you ever gone to the uber website or the fitbit website? The entire brand is an app. You start to think about how am I representing my brand in a digital experience?
Experience needs to be at the top strategic priority for any brand in the world. This is where, with our product set, we're uniquely set to deliver on that multi-channel experience that Shantanu had laid out when we talked about Delta. Delta, you check in on your app on your way to your flight. You walk in, you drop off your bag. They know who you are. It's in context. It's based on the same data. You walk to the kiosk. When you're there wondering if you got your upgrade, when you're standing at the gate, that display's all being done with Adobe technology. The next phase is you get on the flight, they know which seat you're in. You basically put the screen because you want to watch TV while you're on the flight. They know, "Hey, Brad, it's great to see you. Here's your next flight.
It's delayed. You're going to be able to make your connection." All of this multi-channel engagement is all about the experience. That's where the brand's going to win. The last one, everything that we do when we interact with clients, we make sure that we are 100% tied to their KPIs. Business results are what matter, whether it's driving incremental revenue, more profit. This is where certainly our tieback to that data orientation is critical for us. It's where the CMO and the CFO, we've talked about the marriage between the CMO and the CIO being a shotgun marriage. The CFO's starting to poke their head into the room and start to ask questions around some of these things.
Marketing ROI has come to the top. That's something we're very comfortable with and we want to arm our clients with. One quick just note in terms of what the approach here. You think about the problem that's facing all of our clients. On one side, you have consumers. They do something. They hit your website. They open an app. It's an action. You have to deliver them an experience. We've talked about this before. You probably heard me talk about this. We talk about this as the last millisecond. The things that you have to do in the 300 milliseconds. Sorry. Can we go back one slide? I'm ahead. Right there. Let's stay here for a second.
The thing that you have to do from the time that an action happens to where you deliver the experience, you have about 300 milliseconds to say, "Okay, who is the person?" Listen, basically, have all that data and that profile in context. You have to predict using decisioning algorithms, what is the experience or the offer or the message, or, David, as you start to think about a Creative Cloud standpoint, what is the training that a Creative Cloud user may want to see? These are the predictions and the decisions that take place. You have to be able to take that content in its elemental form and deliver an experience. This is the last millisecond. This is that real-time infrastructure that marketers are building. That brings us to this notion of the real-time enterprise.
We are winning today by targeting the marketing organization. Okay? The marketing organization, many CMOs have raised their hand and said, "I can go build this real-time infrastructure. I can do this for the organization." What's happened is exactly what you heard this morning, and this afternoon from David. It's not just about marketing. It's not just about getting more Creative Cloud users. It's about providing them a better end product experience. Many times, I'm in meetings now, and it's not just the CMO that's in the room. It's R&D. It's the core product people. Under Armour, the product people, the product that they're building, their shirts, their shoes, this is taking place within Adobe technology all integrated all the way through the experience. Marketers are leading, but it's bleeding into other parts of the organization, including product, sales, service, support.
It's this infrastructure that can deliver on the last millisecond that's going to be required. You think about what is marketing? Like many of you, I've got an Amex credit card. I use the Amex credit card all over the world. If I fly overseas and a new card or a new charge gets posted, I often get a text message saying, "Hey, we flagged this as a potential fraudulent transaction. Is this you?" Approve or deny. The question is that marketing? It's probably not marketing. That's customer engagement, but it's the same infrastructure that Amex is using to drive their marketing. It's the Adobe infrastructure. This is what we're talking about around the real-time enterprise that we're starting to see additional opportunities to not only drive that engagement, but also partner with companies like SAP, as Shantanu mentioned up front.
Our platform, and how we're winning, if you think about it at the bottom, it's data and content, the massive scale, that 25 trillion transactions, all bringing in those marketing assets. The core services is where we have been spending a lot of time when we pursue this integrated approach because the core services is what's removing the drag from marketing. There are many things that marketers do today that's slowing them down. As a technology ecosystem, I actually think we've completely let the marketers down.
As an industry, if you look at any of the LUMAscapes or the things that are out there with all the logos of people who are doing marketing technology, what ends up happening is you have, in many marketing organizations, you have a tool that's used by one person in a marketing organization, and that tool may not integrate or it's not meant to integrate with anything else, and you don't log in the same way, it doesn't have the same data hierarchy. Marketers are starting to think about things like data governance. Where does the data sit? What's the core data model? These are all things that core services can solve for marketers. That will help drive collaboration across the six solutions. The big thing that we're looking to drive with the Marketing Cloud platform is to really get marketers out of their silos.
During the Q&A, I'll try to head off one of the questions in terms of, "Brad, what are you doing that's really differentiated? Where are the investments going, and what is that going to be like?" This is, I call this the triangle of differentiation. How are we investing? First, it's around data. It's around first-party data, third-party data management platforms, real-time profiles sitting at the edge to where you can drive experiences no matter where someone is in the world. It's all managed through that infrastructure. Big investments there. You heard us talk about it at Adobe Summit. We've also continued to roll out some best-in-class data management capabilities in our Adobe Audience Manager product, that is sitting at the core.
If you look at the Publicis Groupe announcement, that data model and that data infrastructure is what's sitting at the core of their always-on platform that was part of that release, okay? On the content piece, David talked about this, the integration all the way through the Creative Cloud. Just to turn a mirror on what we had talked about this morning, marketers are looking to optimize, it sounds so boring. They're almost looking to optimize the supply chain. It's how do I get more content, and how do I get that ready when I need it? How do I go all the way to the source of where the content's coming from, the creatives, so I don't get stuck in the middle? That's really, as you think about the investments we're making in content and experience, that's where it is. Then delivery.
How do you deliver that multi-channel engagement? At the core of that was why we acquired Neolane. It's why we've continued to move our Adobe Experience Manager capabilities forward. Really excited about those three pillars. Then in the middle is where research happens. It's where, how can I use algorithms, machines to do the things that marketers with our simple human minds aren't equipped to do in real time and at that massive scale? This is where we're invested. This is where a lot of our R&D folks, how they think about it. Outside of the solution area, this is a horizontal look at what we're building. Shantanu talked about this on partnerships. He mentioned SAP and Publicis Groupe, so I won't dwell on those.
What's most exciting to me about this slide are the number of large global agencies and systems integrators who are creating practices solely based on Adobe, they're building huge numbers. They're becoming meaningful to companies like Accenture, Deloitte, PwC, WPP, Publicis Groupe. These are big companies, and they're coming and saying, "Hey, Matt, how do I get more support? How do I continue to grow? What are the things that you're doing next?" They have practices built around that. We're becoming important to the broader ecosystem, and back to that 2011 to 2014 slide, is really rewarding to be there. In summary, three ways that I think about the business. We have got momentum. It's significant. We're excited about where we are, but we are not standing still.
Next quarter, next year are going to be bigger, they're going to be better, and we've got the wind at our backs. I think that's coming from our market leadership, the product leadership, and the integrated approach. Again, these aren't going to be a bunch of logos on slides that have basically a holding company in common. We're building a platform that marketers can use to run integrated marketing campaigns. The market opportunity, $21 billion and continuing to grow. Couldn't be more excited. Mark's going to come, I think, and wrap it up. Thanks for your time. Back to our regular scheduled programming.
Okay. Thanks, Brad. I'd just like to do two things with you today. One is walk you through, from my perspective, why I firmly believe Adobe's business has never been healthier than it is right now, and two, talk about why I think the opportunity in front of us has never been bigger than it has been in the past. Then we will open it up for questions. I don't have slides down here, guys, for some reason. Our strategy, as you know, has been consistent since November of 2011. We, in November of 2011, announced, as you know, that Creative Cloud was going to go subscription, and that we were going to double down our efforts in digital marketing and create this business around a Marketing Cloud. Since that time, we've completely reimagined Adobe's creative business.
It's completely moved to a subscription model now, and it's created a much larger total available market for us, and it's created a much larger growth opportunity for us than we ever had under the perpetual model. From a Marketing Cloud perspective, as you know, it's an explosive growth opportunity. It's a very big market. We're the leader in the space, and we're differentiated, as Brad just said. Nobody has the end-to-end offering that we have in digital marketing. Our business model transition is behind us now. It's been an interesting three years, but a very well-executed three years from my perspective. That's behind us, and I'm really confident about where the business is going forward right now.
From a financial health perspective, I'll walk through each of these in a second, but I want to really show you from my perspective why I firmly believe the business has never been healthier than it is right now. First, if you look at the creative business, as I've said, we moved to a subscription model. We're driving new users, as David said, as a result of that. 20% of the people coming to the Creative subscription model are new to Adobe. We're driving more revenue per user than we ever did under the perpetual model. From my perspective, as importantly as anything else, we're driving, there you go, we're driving more recurring revenue. By the end of 2014, as David said, and as we've talked to you about in our conference calls, we'll have 3.3 million individual and team users signed up on the Creative subscription.
We'll have $1.925 billion in Digital Media ARR, which includes enterprise term license agreements. Of course, included in that ARR number is Document Services. Document Services continues to perform exceptionally well. In Document Services, we've had a really strong move to enterprise ETLAs as well. In digital marketing, as Brad said, we now have a $1.2 billion revenue business by the end of this year that didn't exist five years ago. We've gone from zero to $1.2 billion in five years. We're growing bookings in that business over 30% on a year-over-year basis. Customers are adopting multiple solutions from Adobe now, so we continue to sell back into the install base, driving more and more solutions into individual customers. That's driving larger deal sizes. Clearly, without a doubt, we're the leader in a very fast-growing market in this space.
Recurring revenue has been one of my major personal focuses since 2011, since we kind of went on this mission. With all our businesses, our percent of recurring revenue has only increased every single quarter since 2011. In fact, if you go back to 2007, 2008, we were at about 5%. We're now up to 63%. That's being driven by Creative Cloud for individual and team. It's being driven by Creative Cloud for enterprise. It's being driven by Acrobat ETLAs. Of course, it's being driven by digital marketing bookings, including the fact that AEM is now pretty much moved from a perpetual model to a ratable model. This trend is only going to continue, which is, from my perspective, a really solid measure of the health of our business. That was the P&L. As important, and it's really important, we're improving the balance sheet dramatically as well.
We've got healthy increases in deferred revenue, again, driven by growth in digital media, Creative Cloud for individuals and teams, Creative Cloud and Acrobat ETLAs, and digital marketing bookings. We've reached a milestone in Q3 with $1 billion in deferred revenue. As you know, deferred revenue is billed, but yet unrecognized revenue. There's one more additive view to this that I want to show you, which is unbilled backlog. Another element that's outside of both the P&L and the balance sheet is unbilled backlog. This unbilled backlog represents future billings under contract. It's essentially years two and three of enterprise ETLAs that are not yet invoiced. If it was invoiced, it would be in deferred. This is both digital media and digital marketing unbilled backlog. We've got now, through the third quarter, approximately $1.5 billion of unbilled backlog.
With both deferred and unbilled, because they are additive, we have $2.5 billion of revenue that's under contract and will be recognized over time. These numbers are only going to get bigger going forward. This is tremendous progress from my perspective since 2011. That's kind of the health of the business. Let me shift gears and talk about how you should think about Adobe's model moving forward and why the opportunity from my perspective has never been larger. Some people, from my perspective, have been a little overly focused on the Creative Cloud subscription number, just this individual and team subscription number. While it's important, it does understate the full opportunity that David outlined, that he went through this morning and that he just went through with you this afternoon. It doesn't take into account the growth that we're going to see in ARPU.
It doesn't take into account the marketplace that he talked about, the Talent Search that he talked about, the Creative SDK that he talked about. We had temporary metrics over this three-year transition so that we could be transparent with you about what was happening in the business. ARR, that was the right measure for us to articulate to you what was happening during the transition. It was the more complete measure of the true health of the business during the transition because it included enterprise and it netted out churn. While ARR is important and is still important, subscription revenue, so the ability for us to take the stacking effect of all of those subscribers, now start to flow it back into the P&L in the form of revenue, is going to start to grow rapidly.
As revenue starts to grow back into the model, ARR starts to converge with revenue, actually crosses over revenue, and converges with revenue, and starts to consistently grow with revenue. What happens is they both start to go together, right? Because revenue has now come back into the P&L. You'll see us, therefore, shift our focus a bit more back to traditional measures, which are bookings, revenue, and earnings leverage going forward. I would suggest that your focus obviously return back to the P&L as well as you start to see this happen. You'll obviously see this as revenue starts to come back into the P&L. Let me spend a minute about the opportunity for the three businesses and summarize a little bit what David and Brad and Shantanu talked about both this morning and this afternoon.
I want to do it in the form of what the strategy is for each of the businesses, as well as what the key initiatives are from my perspective. The strategy, of course, for Creative is migrate the base and at the same time acquire new customers with market expansion initiatives like the Photoshop plan. At the same time, we want to drive ARPU expansion. ARPU expansion is going to come through new services that drive additional ARPU. Initiatives, of course, are innovation. That's number 1. Innovation in the Creative space is what's going to retain members. It's also what's going to attract new members. We want to address the multi-device content creation challenges that exist to help our customers and redefine the creative process beyond the desktop, as we just showed you, and add value through any device that you want to create on.
In Document Services, we've already done a lot of this, but the first strategy is to migrate the enterprise over to ETLAs, and Matt's team's done a tremendous job of doing just that. You've seen a lot of that in the numbers. That will continue. We're also going to attract new users with a low entry price point of subscriptions in this space, and we're going to focus on mobile. We want to extend the PDF franchise and our leadership in collaboration and document workflows. Our initiatives there are going to be to drive growth in document creation, sharing, and signing services around our EchoSign offering. Then, as Shantanu mentioned, we have a major release in this space coming in FY 2015, which we think will just keep the growth in Document Services moving forward. Lastly, in Brad's space, we're the leader in the space, fast-growing space.
We want to build upon our industry leadership in this space and increase the multi-solution Marketing Cloud usage in our install base. Our initiatives here, we talked about building out the partner ecosystem. There is more opportunity to do that and leverage the partners that we have announced and focus on our competitive differentiation. Without a doubt, we have a competitive differentiation from everyone else in this space. It has to do with content plus data. It has to do with decisioning and algorithms, and it has to do with personalization and engaging digital experiences across devices, which nobody else can do. With those three businesses, we've got huge market opportunities that David and Brad both touched on. Our strategies are focused on capturing these large market opportunities.
In Digital Media, our total available market has grown from $6 billion in 2011 to now $14 billion with the additional offerings that David talked about. In Digital Marketing, Brad touched on this, a $21 billion market, and these markets just keep getting bigger. Huge opportunity in front of us. From a financial target perspective and a summary perspective, these targets are the same targets we've shown you since December of last year. We firmly believe with the pace of innovation we've got in Digital Media and Digital Marketing, with the growth that we have in both of these cloud businesses and expanding our go-to-market opportunities, we can capture tremendous growth opportunity and drive leverage in our P&L both from a revenue perspective and an earnings perspective.
You're going to see us start to really grow the top line now in the P&L and drive earnings leverage. I'm not going to touch on 2015 today. We typically do that in the fourth quarter, we'll give you some more color around 2015. I know you're anxious to model 2015, and we'll help you with that to some extent when we get to earnings in the fourth quarter. I think it's important to understand that these goals for the next few years have been in place for a while, and we still firmly believe that these are both doable and something that we're excited about executing on. With that, I'm going to bring Mike up and we're going to start to take some Q&A.
We're going to set up for Q&A in just a minute. They're going to bring out some chairs, maybe just stretch for 30 seconds and we'll start in a minute. With the Q&A process, if you could raise your hand, there are mics that are going to be going around. Just perhaps identify yourself and your firm just so the people on stage can understand who's asking.
Thank you.
Thanks, Jay Felice , Griffin Securities. Two things, I promise. First, on the digital media side, one of the things that during the dark ages of package software that you did effectively was to segment the product line, which had the practical effect of inducing customers towards more of the premium versions of your software or what we would now call more ARPU. David intimated that you're going to see more tiering of the offerings. The question is, are you going to be as explicitly segmenting the offerings as you had been, or is it going to be more circumstantial and upselling oriented, but you're not going to necessarily label it as such?
Secondly, for Mark, a little surprised that among the metrics you highlighted that you would be focusing more on, you didn't mention cash flow, which when you consider what's going on with the deferred and ARR.
Yep.
That would probably be one of your fastest-growing or best-performing metrics. If you could share your thoughts on that.
Yep. You can go to that.
Segmentation is definitely something you can expect to see more of in the product line. It's going to be different than the segmentation we had in the past, of course. In the past, in fact, we made a big point about this this morning, we were segmenting based on creative type, whether they were a videographer or whether they were a graphic designer or whether they were a photographer. We see those lines going away and we see more people working across those lines, which actually works and I think ultimately creates a tailwind for us. You can expect to see more segmentation occur with some of the additional value services. One good example of that right now to think about where we're heading is something like the introduction of the stock content at the higher ARPU prices.
We will include more of those kinds of segmentations. Hopefully, those segmentations are of value to a broader part of the base. We hope that those are incremental value as opposed to segmentation, in a sense. Tiering.
Jay, also to be explicit, I think we feel really good about the individual product as well as the Creative Cloud Pro and Team and Enterprise as being the core segmentation. In terms of design collection or video collection, we don't think that serves us as well in the cloud. To be explicit about that one.
Yeah.
In terms of cash flow, it's a great point, Jay. Obviously, we're very focused on cash flow. It happens to track pretty closely with non-GAAP earnings. I kind of take it for granted maybe as I talk to you guys that with the earnings coming back into the model, the cash flow comes back into the model. From a cash perspective, we've continued to, as I've talked to you guys about for a long time now, use excess U.S. cash to buy back stock. That continues to be our strategy, and excess meaning after we've
Done whatever we need to do from an M&A point of view. Yeah, obviously, we're really excited about our cash flow model moving forward.
Hi, Steve Ashley, Robert W. Baird & Co. I have a question to follow up. My first one is on the Creative SDK. David, you mentioned it just several times today, and I just want to make sure I understand kind of the strategic importance and how you see it playing out going forward.
Okay. Highest level, as we were talking about, is that we look at the business now. We look at the business much beyond what we're seeing happen on the desktop applications, and we're looking to expand the value proposition beyond that. With the introduction of the Creative Profile, the new mobile apps, and what we expect to be a very rich ecosystem of third-party mobile apps built on the SDK, a few things happen. The first is it drives migration, right? Because you start to see the value of the desktop apps now extending into the mobile workflows because everything you do on mobile works on desktop, everything you do on desktop works on mobile. It opens up a new front of value addition that you simply can't get in older versions of the product. The second is around retention.
As you're using the mobile apps, the mobile apps are available for standalone use for free, but keep in mind that they don't integrate with your desktop apps unless you're a paid Creative Cloud member, because you need the latest version of the desktop apps that are available only as Creative Cloud desktop applications to do the work across the desktop and the mobile. The third is, of course, attracting new customers. As we create more Adobe IDs, that effectively goes and fuels the top of the funnel that allows us to then upsell them to some of the new paid plans that we have.
Steve, we're in an enviable position where all of the technology that we've built over the last few decades, there are, as David mentioned, thousands of developers who want to take advantage of it. If we can have them take advantage of it by being part of the Creative Cloud platform, I think there's benefit for them because they're not reinventing the wheel. There's significant benefit for us because they're now part of our new customer base, that's the strategic importance that we have to extending our platform.
Oh, great. Just quickly, in terms of the Creative Profile, it seems like you introduced some collaborative capability with it just seems it lays the platform to really drive a lot more collaboration in the future. Does that sound right?
That's definitely-
Yes.
Definitely part of the plan, increasingly, also part of the plan to integrate deeper with the Marketing Cloud. At the Creative Profile that we have, the profiles and the identities that Brad has, you put those together with the asset infrastructure that I was talking about, it opens up a whole set of collaborative capabilities within creatives and between creatives and marketers.
Hi, Brent Bracelin from Pacific Crest. Brad, salesforce.com recently announced an expanded relationship with Omnicom. Does that change in any way your relationship with them, what you've been doing or threaten that in any way?
I think our relationship with Omnicom, I think it continues to be strong. I think it comes down to where the areas of strength are. I think the Omnicom and Salesforce announcement was particularly around CRM and how you're doing that. I think where we work with Omnicom and really work well is around the experience delivery and around those data management capabilities that I think are core to our platform. I think you'll see lots of activity in the market. I think parsing that in between what's the kind of relative areas of strength, and where people approach the market, I think is going to be important.
I think from a partner ecosystem standpoint, we've overachieved what we've wanted to do from a booking standpoint this year, I think from the practice standpoint, I think Shantanu mentioned, I mentioned it in my remarks, we feel really good about our position.
I think all digital agencies are now recognizing that they have to partner with software vendors because their business is transforming, right, from the creative strategy that they're providing, that continues to be a big opportunity for them. The buying of media is becoming far more transparent, and technology is just going to play a bigger role in marketers. I think it all goes well for us.
Thanks. Hi. Over here.
Oh, hey.
Brad Zelnick with Jefferies. Mark, I appreciate all the logical reasons why you're de-emphasizing subs when looking at the digital media business. Can you just remind us what are the leading metrics that you use internally to monitor the health of the business, and what exactly are you going to share with us on a quarterly basis going forward? I have one follow-up, too.
Yeah, don't take what I said too far. I don't want to de-emphasize subs. I think subs, like I said, it's important, but you're not getting the whole picture just by looking on that sub number because it doesn't include enterprise, as you know. We've said for years the true health of the business in the transition was measured by ARR, and I think that still holds, that ARR is the most comprehensive measure of the health of the business. Moving forward, what I'm trying to suggest is that ARR will still be there, but you're going to start to see that the P&L is going to make more sense again, right? For the last three years, it just didn't make a whole lot of sense to focus on the P&L because of what we were going through.
As we've now come out of the transition, the P&L, from a pure traditional measure perspective, is going to start to make a lot more sense again.
That makes sense that things would reconnect. My follow-up question is just.
If we think about some of these exciting metrics, 20% of users that are new to the franchise, the increasing importance of ETLAs. As you think about routes to market for the entire business, can you maybe just comment a little bit about how you think about customer acquisition costs, as well as the cost of renewal relative to what it's been in the past? Thank you.
Well, maybe I'll
Yes
jump into that one as well, Brad. From routes to market, Brad, David showed the funnel. adobe.com is the number one way in which people are going to continue to hear about our product offering, how they participate in the community, and whether you're an individual customer, whether you're a team customer, whether you're enterprise, you're coming to adobe.com for that. From the point of view of where people learn about us, where they want to interact, the reducing the friction associated with acquisition, we're going to put more and more and more emphasis on adobe.com.
I think on the team side, what we find with the channel partners and the affiliate marketing is that increasingly where people want to aggregate purchases and they have already a purchase order with some of these customers, that's where we go, and the whole idea behind the enterprise is that we want that direct relationship with that customer. What's happening in the business is the customer retention, I think, will be driven more by active usage than by anything else. Because what we have to do to retain these customers is to make sure we really understand what features they're using, how we equip them with getting the best out of our products. In terms of customer acquisition, I think, what you've seen is we've had a fairly positive approach about getting the existing install base and migrating it. We're certainly attracting new customers.
I think you'll continue to see us narrow down the ways in which people can get to Creative Cloud as it moves so that we're distancing ourselves from CS6 more and more. In other words, we've always talked about sort of what are the incentives that we use to allow people to do and how do we reduce the old mechanisms by which they can upgrade, and we'll continue to do that. We just look at it, the significant headroom, the emphasis on adobe.com is the largest one for us in terms of customer acquisition and customer retention, I think is all about usage. The more value we can provide. We've found that our customers say this bite-sized chunks, even though David might argue with me and says it's a lot more than bite-sized chunks in terms of the innovation we're delivering every few months.
They're actually finding more value in that because it's easier to train themselves on the new product. I think that also is a good sign for retention.
Thanks. Walter Pritchard, Citi. Mark, on the margin side, I think we pretty clear to model your business pre-digital marketing when you're just a creative company and a document services company, and we saw your margins approach 40%. I'm wondering, as we get into this point where the model starts to look more normal without all the changes from the transition, how should we be thinking about creative margins? Then just sort of a follow-on related to digital marketing. You've done a lot of M&A there. That seems like it's been probably a depressive force on the margins in the digital marketing space. Maybe a question for Brad is, are we sort of in the seventh inning on the M&A in terms of building out the portfolio? You have a lot of the pieces.
You have eight or nine Magic Quadrants up there that you highlighted, just curious how far along we are and what may still be to come there.
Yeah, Walter, on the margin side, we've given you guys enough to model 2015 and 2016 with top line and bottom line. Inherent in there is a margin number, right? That gets you in the 30s probably. It clearly gets better beyond that. In terms of digital media, those margins are going to come back to at least where they were. Right? We've always said that there's no reason to believe that the digital media margins shouldn't get back to at least where they were. You could argue with us that maybe they should get better than they were, for now, let's assume that they get back to where they were. Brad's business is a whole different story. Right now, that's a land grab.
We're growing that business, huge numbers with 30% a year bookings growth. That requires a significant investment in sales and marketing, and that's the right answer right now. Very, very different margin profiles. I'm not going to guide beyond 2016 right now, but the margin does start to come back into the model this year, next year, and 2016. You see that in the guidance that we provided.
Maybe Walter, directionally, I'll talk about digital marketing. Then you can talk about M&A, Brad. Directionally, the way you should think about digital marketing is that, as you all know, assuming high retention rates, and we have really high retention rates with our digital marketing, the upfront cost, while it's a little less about the M&A and it's a little bit more about the customer acquisition that's happening upfront. Correct? I think most people will say traditional SaaS-based models, you can hope to get 25, 30% margin once you get to steady state, if you're not growing. We're in the growth phase, I think, as Mark said. The margins in digital marketing have more to do with the investment we're making in-
Right
sales and marketing and the growth rather than the acquisitions-
Right
per se. I'll let Brad talk about sort of how he looks at M&A landscape.
I think back to the kind of the marketecture that I showed you, we feel really good about our offering right now. The broadest, most integrated, all those things. From an M&A standpoint, we see a lot of interesting adjacencies, probably more tuck-in type acquisitions. You guys know this as well as we do, there's probably very few standalone large transactions that make sense in marketing. We continue to be super active in the buy, build partner funnel. One interesting thing that I didn't mention, one core service that's
That's highlighted there is our Adobe Exchange Marketplace. This is our open APIs where other marketing applications can tie into the underlying data infrastructure, which is a big benefit for them. The interesting thing that it provides us is a bird's eye view in terms of how different marketing applications are being used and the impact on the end client. It gives us a nice kind of way to think about M&A pipeline.
Should just give the second one in the meantime.
Yeah.
Thanks. Ross MacMillan from RBC. David, just so I'm clear about the ARPU evolution, you've got two things going on. One is segmentation, which maybe drives more users to individual or teams, so the higher SKUs. Then you've got other things like Talent, which is actually a sort of new pricing model for parts of the base. When we think about the evolution, what's going to be the biggest driver of ARPU in your mind? Is it going to be the SKU mix or is it going to be some more of these separate services? Then I had a follow-up for Mark.
I think the most important thing that we have to look at as we look at ARPU is, we've talked about this on previous earnings calls also, is that we have to look at it by segment. I think trying to mix it into a single ARPU number also may be a little bit of the wrong way of looking at it. I look at it and I say, for the Creative Cloud Photography plan, it's a land grab to get to that point. There's a really broad, rich opportunity for us to go after more customers in that segment, leveraging everything we're doing with mobile, but it's also one of these segments that I think just has a lot of runway ahead of it. The more successful we are with that, the more drag there is on the overall ARPU number.
I think I would just urge everyone, as they're thinking about ARPU, to not think about it as one number, but really recognize that we're looking at it at these different segment levels. As we've talked about in the past, if you start looking at it at those segment levels, the ARPUs remain healthy. Now, as you point out, there are a number of ways that we're going to drive increasing value and revenue per user or per customer. That is going to be a mix of things within the individual segment to drive people up into the higher ranges. The second one is to, as we add these more collaborative capabilities, make sure that the small, medium businesses are buying up to team.
As we add more capabilities for private cloud and public cloud for the direct sales, start to drive higher ARPU even in the enterprise segments. All of those are going to play out in addition to what we're doing with Talent Search, which as you just pointed out, is also a much higher level. We have not given any guidance in terms of how that's going to break out into a single ARPU number.
Just for Mark, just on the margin question. This year has been pretty amazing because your OpEx growth is, I think 4% or something. It's pretty low in a period when you're investing aggressively into the digital marketing business. I guess I'm trying to understand what would be the dynamics that would create a big acceleration in that OpEx growth, because we're already through the model transition on creative. You're investing aggressively in marketing. Why would it grow much more faster?
The single investment's still going to be in Brad's business. The single biggest investment's still going to be in Brad's business. You can't grow bookings 30% a year after year, and not add something close to 30% sales capacity every year, right? You'll get some productivity improvement, but he's beaten me over the head every year to add more and more salespeople, which makes sense because it's got to support 30% bookings growth. It may not be as much this year because you don't have to invest maybe as much every single year, but it does catch up with you. As you look out, we just can't keep growing at 30% and not add the sales and marketing capacity. That's where you'll see most of it.
Ross, don't underestimate the work that we're doing beneath the covers on improving things like our COGS or the server costs.
Yeah
infrastructure that's happening. While you look at it at the top line OpEx, the amount of scrutiny and work that we're doing as these businesses become larger scale to make sure that we can squeeze cost out of it, that continues to be an ongoing focus for us as a company because that's important, whether that's through the channel or whether that's direct on adobe.com.
Yeah. Thank you. Said another way, this year, we've been able to save money in other areas to help fund what we need to do to drive sales and marketing capacity. At some point, you just can't do it that way every year. You have to incrementally add.
Charlie Galvin at Owl Capital. I have two questions. One on the Creative Cloud side. You mentioned that 20% of your subs are new users. Can you talk a little bit about what % of those new users are on point solutions versus the full suite, how that's kind of trended, call it, the last four quarters? The second question is on the Marketing Cloud side. Can you elaborate a little bit about your sales strategy in terms of attracting new customers? Do you have separate sales teams for different industry verticals, whether it's airlines, retailers? Elaborate on your strategy there. Thanks.
Maybe I'll touch on-
Yeah
I'll touch on those. You guys can add. On the Marketing Cloud side. For the most part, we have a fairly traditional go-to-market with respect to we have the strategic accounts, the accounts on the top of the pyramid. We have named accounts, which is a little bit below that, which is the accounts where they're buying multiple solutions. We have territory accounts as well as what we're getting through partners. Fairly traditional route to market from the direct sales force. In terms of the verticalization, if there's such a word, of those sales forces, we focus more on financial services, we focused on retail, and we focused on government as sort of the first key verticals. We're seeing so much success in that, being able to talk the language of the customer, you will expect to see further vertical of our direct sales force.
Again, that depends on whether you do it in the strategic or the named, more so than where you do it in the territory account, because they are calling on specific targets. With respect to the Creative Cloud, we haven't broken it out. I think the question that we had said in 2011 was to reflect that we believe that the Creative Cloud offering would enable us to attract new customers, and we had given you a number at that. I think this just shows that the continued momentum of it's not just migrating the existing install base, but it's attracting customers. That's why we give you the 20%, but we haven't broken that up by individual and full product.
Maybe just one thing from a go-to-market standpoint. Same organization selling both new customers and existing customers. A couple unique things that I would tell you that I feel like we've really cracked the code on from a SaaS selling standpoint is to actually drive the book of business number into the sales team themselves. You have the account managers who not only are interested in signing new business, but also care about the book of business as well. That's an innovation that I think we should actually package up and go sell somehow, because I think it's innovation that Matt and his team have driven in terms of how we go to market.
The other thing that we hear from partners like SAP and from the SIs is that Adobe's go-to-market team is now being recognized as the best and the biggest go-to-market team who actually know how to speak to marketers. You think about all the enterprise selling teams that are out there, most of those are kind of targeted in a different way. The fact that we're now being called out in the industry as the best and most focused team that can talk about marketing and advertising is one that we're very proud of.
Zane Green with Sanford Bernstein. First, congratulations on your continued success. I was really impressed with the speed of innovation and pace of development that the Creative Cloud has enabled. I was just wondering if you could talk about how that may impact or reduce, if any, R&D costs going forward. Thank you.
I'll start. From my point of view, as long as we're continuing to grow the business, we want to distance ourselves from the competition. We just think it's such a large opportunity that's available for us. We have a global R&D force, but at this point, I think our high-order bits, honestly, are driving further growth. What's happening with touch, what's happening with mobile, what's happening with social and the community, now's not the time to really put more of a focus on that just because of the tremendous success that we're having right now. That's how we think about it.
The only thing I'd add to that is, I focus more right now, obviously, within the margin constraints that we set internally, I focus more on the mix of what those engineers are working on.
That's right.
You can expect to see continued innovation on desktop, but you can definitely expect to see more services and mobile work coming down the path.
Gloria, Amanda, feel free to give the mic to the next person who's raised their hand so we can also speed this up.
We got one here, Shantanu.
I doubt if they're going to retract their question.
Derrick Wood at Susquehanna. In digital media, or I guess in the creative business, the VAR channel's been an important channel historically. Maybe a little less important now with adobe.com, but clearly, as we saw last quarter, an important channel. As we shift from kind of box distribution to digital distribution, I think that business becomes a little less transactional, a little more solutions-oriented. What are you doing to help some of those VAR channel partners get more solutions-oriented? Maybe on the heels of last quarter, which was a little weaker out of that channel, any update to-
Sure
What developments have happened since?
actually, in conjunction with MAX, Matt actually has a complete partner track where educating the partners about what the offering is, educating them on what's happening so that they can differentiate between the individual team and other offers is also happening in parallel. I think, again, going back to Q3 and what happened in Q3, I think it's really important to remember that CS6, there was such a big push with our channel partners on CS6 that while Q3 continued to do well, that was just as they transitioned from selling solely perpetual to selling solely cloud. That was just, we think, a temporary blip. If anything, actually, all existing CS customers continue to be a huge part of the migration that we will do moving forward. I think they're all here this week. I met with them yesterday.
I know Matt's been meeting with them to continue to make sure. I think they add value in a couple of different areas. First is there are a lot of customers who at the time of the purchase of new hardware or when they're buying other software, they want to aggregate all of this stuff. Make sure that they package it up in a single PO. That's a tremendous value that they fulfill. The other thing that we find they are capable of doing a lot, which doesn't happen as much on adobe.com, is the upsell. Somebody calls one of these channel partners, and they are finding a very effective way to upsell from just a single product or an individual product to the entire offering and a complete small and medium business sell. These channel partners continue to be important.
I think you did see the amount of transactions that's happening on adobe.com. It's certainly becoming a larger part because it's the way customers want to transact business with us. We're really focused on that.
Hour, maybe two more questions, please.
It's Jen Lowe, Morgan Stanley. I wanted to ask a little bit more about the Creative SDK and in particular, two areas. One, given that consumers is also a big opportunity for you to monetize directly via upsell, how do you sort of balance what your opportunity is versus the opportunity that you're laying out there for your Creative SDK partners to build their own successful businesses around the Adobe product set? Related to that, is that something that you see as a potential M&A channel for you going forward to the extent that you do have SDK partners that succeed?
Yeah. Great question. I think in terms of the delineation in terms of Adobe opportunity versus third-party opportunity, the core elements here and the core approach we take is that with Creative Cloud, the ecosystem, we can see and we know the more that the ecosystem's driving content and assets into Creative Cloud, the higher the conversion, the higher the retention of our customer base. The top-level focus here is to drive the creation of Creative Profiles, for both the base we're trying to migrate and for the broader base of customers we're trying to attract. If you think about it, that's kind of the cornerstone of what we're doing. As we see apps being built in the ecosystem, it certainly also gives us a very good insight track as to which of those apps are having a disproportionate impact in conversion and retention.
As a result, we can determine whether those apps are better served by being third-party partners or coming in-house. We certainly will be looking at that. Keep in mind also, though, that some of the processing that happens as part of the Creative SDK is going to be on the server. As that processing is happening, and we saw a couple examples today of things that we can do on the server that's more efficient to do that way than necessarily run on the device, that opens up other kinds of more direct revenue opportunities as well. It's early in the process, so we haven't made any declarations there yet, but it's certainly, there are multiple levels of monetization.
One last question. Well? Well, I just want to say thank you again for coming, and I hope you found MAX worthwhile. We certainly appreciate your coming, attending so that you get insight into what's happening on the innovation front, as well as getting updates from us as to the business. I think we'll be talking with all of you on our Q4 earnings call, which is on, Mike?
December 12th, I think. Yeah.
Okay. December 12th.
Thanks, everybody.
Okay. Thank you.