Management

Autodesk VP Explains Software Licensing Policy Changes

9 Sep, 2015 By: Robert Green

CAD Manager Column: To gain more insight into Autodesk's switch to rental-based licensing, we sat down with Vice-President Andrew Anagnost.


In the previous edition of the CAD Manager's Newsletter, I provided some planning advice for Autodesk customers who must deal with the company's new policy that will end the sale of perpetual software licenses in favor of rental-based licensing starting in January 2016.

Not long after that issue was published, I was contacted by Autodesk's public relations department and was granted an opportunity to interview the Senior Vice-President of Industry, Strategy, and Marketing, Andrew Anagnost. I was given some information about the new licensing policies and was promised I could ask all the questions I wanted, so I jumped at the chance. I found Mr. Anagnost to be forthright and realistic, and I hope you find the conversation as valuable for your software planning as I have.

New Policies on Suite Products

Autodesk announced earlier this year that it intended to suspend sales of single-product perpetual licenses (such as AutoCAD or AutoCAD LT) in January 2016, followed by the perpetual license sales of its design-based suites (which are essentially product bundles) in January 2017. The company released a new policy announcement on September 3, however, that brings the timeline forward and will end the sale of perpetual suite licenses on July 31, 2016 — a full six months sooner than previously scheduled.

My conversation with Mr. Anagnost started with a brief overview of the policy changes, including a timeline of key milestones and a graphic contrasting Autodesk's views of perpetual vs. rental licensing models (see below).

Robert Green: So the suite-based perpetual licenses will go away sooner than expected? Why is that?

Andrew Anagnost: This is a big change for how Autodesk does business, and we expect things to be bumpy as the change occurs. That is a big reason why we've elected to move up the cutoff date for perpetual suite licenses — to complete the transition and move forward.

RG: Can you clarify what "bumpy" means?

AA: We know this is a new way to license software for many of our customers, so we will have to explain it. We fully understand that it will take a while to prove the concept to our long-time customers.

RG: I've heard you refer to the perpetual vs. rental software question as "a tale of two customers." Why is that?

AA: Yes, that is how we see it. Our most loyal long-term customers are our maintenance customers, while our new customers are fine with using rental licenses to meet their needs. In fact, they actually prefer it because they can buy into the software at a lower upfront cost and then bill those costs to their customers as a project expense.

RG: There is some uncertainty about whether "perpetual" really means perpetual. On the Autodesk web site, it says perpetual licenses can be kept on maintenance "for the foreseeable future," yet the press release says "in perpetuity." Can you clarify?

AA: We have no plans to discontinue maintenance subscription plans for existing perpetual license owners.

RG: But you can see how there could be confusion given the difference in wording, right?

AA: I assure you we have no plan to discontinue maintenance subscription plans for existing perpetual license owners.

Customer Experience

Another major topic of conversation had to do with customer acceptance and what Autodesk terms the "customer experience" of a rental software mode of operation. This part of the discussion touched on many themes that are summarized in the comparative graphic below. I asked a few clarifying questions generated by the graphic as a follow-up.

Perpetual vs. subscription (rental) comparison matrix. Image courtesy of Autodesk.
Perpetual vs. subscription (rental) comparison matrix. Image courtesy of Autodesk.

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About the Author: Robert Green

Robert Green

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Comments

Re: Autodesk VP Explains Software Licensing Policy Cha...
by: clarkrj
on:
September 30, 2015 - 11:49am
This is very frustrating to me as a CAD Manager with over 100 seats in he US and Canada. We do not use network licensing because of the cost of transition. I do not look forward to explaining the tripling of the cost for new seats of AutoCAD when the time comes. For me, this just opens the door to looking outside the Autodesk world to supply the company needs.
 
Re: Autodesk VP Explains Software Licensing Policy Cha...
by: DG1
on:
September 30, 2015 - 6:10pm
Mr. Anagnost, how can you say that "Our most loyal long-term customers are our maintenance customers" and then say that is why we are eliminating the perpetual+maintenance option...??? Are you suggesting that somehow your most loyal customers will never need to add seats? This change in cost structure is nothing more than a huge money grab. Autodesk cannot seriously continue to compare a 3 year term for the justification. None of us buys the software for 3 years then rebuys it...we are on maintenance and will lose huge amounts of money from year 4 onward (or whenever our current maintenance gets renewed). If we need to add 5 seats of Revit next year at the published rates, after 7 years, we will have had to pay Autodesk almost $20k more for rental than we would have for Perpetual + Maintenance. That is just GROSS, considering the costs were massive to begin with at $62k for P+M and $81k for Rental. Also, I don't know what industries can charge the rental fees back to the client, but it certainly isn't the Architects. That is 100% not possible. In fact, we regularly see Autodesk reps tout BIM to building owners and the benefits as "money saving" and that it "should not cost them anything extra to produce since the tools are already being used." Surprise! And finally, as one other commenter said, Autodesk has plenty of time throughout the year to provide updates to the products for those on maintenance. In our opinion, too many updates that can be very difficult to maintain across our company machines. Revit 2016 is already at Service Pack 2 and Revit 2015 got up to Update Release 8...! Here is the truth of it (hint - stock price): http://www.barrons.com/articles/autodesks-bet-on-the-cloud-will-generate... As I said, a huge money grab.
 
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