What Do You Think of CAD Subscription Programs?

A year ago when Autodesk announced it was discontinuing perpetual software licenses for desktop standalone desktop products, many people were outraged and said they would continue to use their perpetual licenses but would not upgrade to the newly announced subscription-only model. Many users said that the cost of the subscription model would ultimately cost them more money than to have the license (licenses aren’t owned).

Some users said they would move over to another CAD software program at that time, a much cheaper program that also offered perpetual software licenses, or an option to purchase a subscription model, but not a requirement. Whether or not they did, remains to be seen.

Some users were concerned about their intellectual property becoming the property of the subscription program, perhaps meaning they would have to “rent” their very own documents. It would also lock their documents into the Autodesk format, which would be very difficult for some architects and engineers who work with numerous clients using a variety of competing CAD software products.

Autodesk’s release of AutoCAD 2017 was made “subscription-aware.” With Autodesk Desktop App, we began to see the growing emphasis on subscription as the app is subscription-aware, offering subscription-only updates and learning content for products under subscription.

With such a disturbance over this announcement, it was surprising to me that Autodesk’s recent financials suggested that the subscription program was largely responsible for the company’s favorable Second quarterly fiscal report.

Second Quarter Fiscal 2017

• Total subscriptions increased 109,000 from the first quarter of fiscal 2017 to 2.82 million at the end of the second quarter. New model subscriptions increased 125,000 from the first quarter of fiscal 2017 to 692,000.
• Total annualized recurring revenue (ARR) was $1.47 billion, an increase of 10 percent compared to the second quarter last year as reported, and 14 percent on a constant currency basis. New model ARR was $371 million and increased 82 percent compared to the second quarter last year as reported, and 86 percent on a constant currency basis.
• Deferred revenue increased 23 percent to $1.52 billion, compared to $1.24 billion in the second quarter last year.
• Revenue was $551 million, a decrease of 10 percent compared to the second quarter last year as reported, and 6 percent on a constant currency basis. During Autodesk’s business model transition, revenue is negatively impacted as more revenue is recognized ratably rather than up front and as new offerings generally have a lower initial purchase price.

Industry experts suggest that’s because the subscription program is a steady inflow of cash. For larger multi-license companies, the subscription sounds like a good deal, and those companies are most likely going to go with it. The figure of “new model subscriptions increased 125,000 from the first quarter of fiscal 2017 to 692,000” is puzzling to me.

Have a substantial number of CAD users transitioned to other software programs as a result of this new Autodesk policy? Is the subscription program as successful as it seems, and if so, why? You can respond to this blog or to susan.smith@ibsystems.com with your experiences or perspectives. Love to hear from you!

Autodesk Desktop Subscription Announced

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Tags: AEC, architects, architecture, Autodesk, BIM, building design, CAD, collaboration, construction, design

Categories: apps, architecture, AutoCAD, Autodesk, BIM, subscription programs

This entry was posted on Wednesday, September 14th, 2016 at 7:30 pm. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.