As Software Subscriptions Lapse in Down Economy, Autodesk Clarifies Policies30 Jul, 2009 By: Nancy Spurling Johnson
The good news is, you have options — but now is the time to take stock of your software and plan for the transition back to a higher seat count.
The economy is down and so is the head count in your office — and as a result, you don't need all the CAD seats you needed a year ago. But your CAD software is on a subscription plan, and you know if you let subscriptions lapse, your company could pay a heavy price to reinstate those seats once you're in growth mode again. At the same time, when your budget is already tight, can you justify maintaining subscriptions for software you don't use?
If you find yourself facing this dilemma — either now or in the future — your first step is to be sure you fully understand the policies that affect subscription licensing, as they can vary by company. Next, take stock of what you have, consider all available alternatives for managing your software, and determine what you really need going forward. Talk directly to the software vendor or your reseller to be sure you know all your options and to find out about discounts or other special offers and any flexibility in policies that might help.
Bill Griffin, vice-president of the Americas Channel Sales at Autodesk, recently spoke with Cadalyst to clarify his company's subscription program and how customers can best manage their software licenses.
Autodesk won't reveal the number of customers or software seats that are on subscription, but it's a vast majority of customers. In fiscal year 2009 (FY09), 31% of Autodesk revenue came from subscription, according to the company. In the first quarter of FY10, it was 43%. To put these numbers in perspective, bear in mind that a software subscription renewal is a fraction of the price of a one-time purchase: $450 vs. $3,995 for AutoCAD 2010 (suggested retail prices), for example.
Explaining Subscription Categories
Following are the categories that describe most Autodesk customers and how they relate to the company's subscription program. For further details about Autodesk Subscription, including pricing and policies, visit the Autodesk web site.
Subscription. Customers of Autodesk who are on subscription have paid the base price for their initial purchase of the software plus an annual subscription fee. The annual fee entitles you to benefits such as regular software updates, technical support, online trainings and tutorials, and other exclusive resources. When the next version of your software is released, you receive it automatically and for no extra charge as long as your subscription is current.
Lapsed or no subscription. Any customer on the current release of an Autodesk product can add subscription at any time. If you're not on the current release and wish to order subscription, you must pay the price to upgrade to the current version as well as the subscription price. A late renewal fee also applies to customers who have let a subscription lapse, but in some cases the fee can be waived, especially if the elapsed time is minimal.
Legacy customers. Customers using software versions that are so old that Autodesk has retired the products and no longer supports them — for example, AutoCAD R14-2006 — are in what the company calls the Legacy Program. Autodesk offers discounts to legacy customers who wish to upgrade to the current software version. At that point customers may also add subscription.
In short, the more time that passes between a subscription's expiration date and when you reinstate it, the fewer options — and more expense — you'll have. Autodesk hopes that customers who let subscriptions lapse will be in a position to upgrade and resubscribe within the guidelines of the existing program when the time comes — that is, they have not fallen into "legacy" status.
But the company also acknowledges that some flexibility will be necessary in certain cases. "If there are extenuating circumstances, we will certainly work with that customer," Griffin said. The company tries to work with customers to help them find the least-expensive path back into the program.
Other Options to Consider
If you're looking at reinstating software seats down the road, you might be in luck if the timing is also right to move to a 3D solution. Autodesk is working aggressively to transition customers to 3D, and you might save money in the long run by moving to 3D rather than restarting lapsed 2D seats. "If someone comes to us in three years and wants to upgrade to Revit or Inventor, trading up to something more expensive, we are very willing to work with them," Griffin said. For firms that are considering the transition in the near term, "We are currently running some very aggressive [trade-in] programs," Griffin continued. "More progressive firms are using this as a time to upgrade, and we are encouraging that."
Under any circumstances, you want to optimize your software management — and this is particularly true during difficult times or in a transitional period. Work with Autodesk or your reseller to determine if you are managing your software licenses as cost-effectively as possible.
One option to examine is network licensing, in which a company owns a number of software licenses that can be checked out and in by staff as needed. Network licensing agreements are increasingly popular and make up almost half of Autodesk sales currently, according to Griffin. This option usually requires fewer licensed seats than does a traditional licensing arrangement. "You only need as many licenses as you have concurrent users," said Griffin. "Maybe you don't need ten seats of AutoCAD, you only need seven. Take inventory of your assets and look at your situation holistically."
Autodesk Assistance Program Benefits
The relatively new Autodesk Assistance Program offers free software and training and discounted certification to the unemployed. Companies that hire program participants can benefit too — by saving 25%-43% when purchasing the software that the new employee was using through the program. The discount doesn’t apply to cross-grades or subscriptions, but might offer some relief for companies that are scaling back now and will face the expense of scaling up again when the time is right.
New Subscription Q&A Series from Autodesk and Cadalyst
Have a question for Autodesk about Software Subscription? Send your questions directly to Autodesk, then watch Cadalyst.com for answers! We kick off the series with a question about license compliance:
How can subscription ensure I am compliant? Autodesk Subscription does not “ensure compliance” with the Autodesk End User License Agreement. To help you or your company achieve license compliance, Autodesk recommends you start by implementing a software asset management program. Autodesk provides a free software asset management toolkit to assist you. However, the advantage of Autodesk Subscription is that it does provide you with 1) the most recent version of any product automatically delivered, 2) full visibility into the software assets owned (via subscription center view) and 3) you can manage those assets proactively as needed. Also, because Autodesk Subscription terms offer licensing flexibility under certain conditions such as previous version usage, home use, and use outside of territory where purchased, staying compliant is made easier.
To learn more about Autodesk Subscription, visit www.autodesk.com/subscription.
Have a question or comment about Autodesk Subscription? Send your feedback to firstname.lastname@example.org.