Bentley Systems Pursues Autodesk Customers with License Trade-In Offer

To entice CAD users who prefer perpetual licenses, the infrastructure solutions provider touts promotion that lowers the costs of conversion — and draws ire from Autodesk in the process.

As software delivery models evolve, they bring new benefits and downsides for both customers and vendors. Bentley Systems, which is Autodesk’s biggest competitor on the AEC side of the CAD market, is currently making the most of what it sees as a prime opportunity to lure away customers dissatisfied with Autodesk’s licensing changes.

This year, Autodesk stopped selling perpetual licenses of its software; it has replaced that option with subscription plans, likened to renting a product rather than purchasing it. Customers who already own perpetual licenses can continue to use them, and may stay on their existing maintenance subscription plan if they choose, but new perpetual licenses cannot be purchased.

Bentley is not the only one of Autodesk’s competitors seeking to scoop up those users who are resistant to the move to the subscription model: Graebert, for example, has used its perpetual offerings as a selling point, and SOLIDWORKS has been very vocal about retaining the perpetual option, even as it develops cloud-based solutions and rolls out term licenses. Bentley has, however, been aggressive enough in its attacks on the new business model that it has spurred direct rebuttals from Autodesk.

Point

Bentley threw down the gauntlet on July 12, 2016, with a press release announcing its Autodesk License Upgrade Program (complete with italic emphasis). The new program offered to credit the net value of customers’ existing Autodesk licenses toward perpetual licenses of Bentley applications (if the license is current on maintenance, that value is 100% of the latest MSRP; if not, Bentley depreciates the credit for each year that maintenance has lapsed).

The release made clear Bentley’s stance on the impact of Autodesk’s movement away from perpetual licensing, framing the issue in language such as: “For consideration by owners of Autodesk perpetual licenses facing Autodesk’s imminent deadline for the write-off of the future value of their investment.”

Counterpoint

Autodesk “found the offer to be disingenuous and mischaracterizes what Autodesk offers our customers,” according to a July 15 blog post by Carl White, senior director of business models at Autodesk. His post made the following points in response to Bentley’s message:

Evergreen value. Autodesk objected to the suggestion that Bentley licenses are useful in perpetuity and that its own no longer are: “No Autodesk customer ever loses the right to use the perpetual software license you’ve purchased, it is ‘evergreen.’ And if you’re on a software maintenance plan, you can continue to receive all of the benefits of software updates and technical support for as long as you’d like,” said White.

Flexibility. “When you subscribe to Autodesk software, you have flexible terms (monthly, quarterly, annually), and multiple access points (single user, multi-user and shared). … Customers can buy and use it for as long as they want and can match their subscription type with the demands of their workforce,” said White. “When it comes to value, lower upfront costs make our software more accessible and allow you to try more tools without the risk of a large upfront expenditure. Plus, you only pay when you need it.”

The march of progress. “Software as a service is essential for technological evolution,” said White. “It’s not just Autodesk saying this; the entire software industry is moving in this direction. Frankly, design and engineering software has been a bit slow to make this change. But the benefits for end-users are clear, and it’s just a matter of time before all vendors have similar ways of buying.”

Audience acceptance. “Our recent earnings results validate our move to an all subscription-based model and readiness of the market and our customer base,” said White. “In Q1 of this year, they were up 132,000 to 2.71 million. … It means that millions of you are already seeing the benefits of shifting to subscription and are making that choice voluntarily.”

And Back Again

Bentley then returned fire with its own rebuttal, and held a press briefing this week on the subject. The company stands firm in its position that:

• Products that cannot be upgraded lose value. Although users still on maintenance can get software updates and technical support, the limitations are significant (licenses not currently on maintenance can’t get on a maintenance plan, users cannot exchange/crossgrade software titles, and standalone perpetual licenses cannot be converted to shared network licenses).
• Autodesk has removed the purchase choice, and therefore its claims about how many customers have voluntarily switched over are not verifiable.
• Software innovation, and efficient software delivery, are not dependent on a subscription model.

Regarding the last point, Bentley argues that it has “much longer and deeper experience with [offering] subscriptions” than Autodesk does. “Bentley has offered our products via flexible subscription offerings for over a decade now,” said Bob Hewitt, vice-president of business intelligence and sales operations.

“We have observed that users prefer having a choice of both options, and we’ve seen users move in both directions over this time. We’ve been able to extend our software at your service benefits across all licensing models, including perpetual licenses. Therefore, I think the argument that technological innovation and efficient software delivery is directly dependent on a commercial licensing model is disproven by our own ongoing experience,” Hewitt continued.

Bentley Chief Product Officer Bhupinder Singh explained that there are many factors affecting which users prefer perpetual licenses. “It’s quite often a cultural preference in different parts of the world; in certain parts of our industry, in some countries, certain organizations have told us that they are only permitted to purchase licenses.” In addition, accounting requirements may push an organization to choose different licensing models based on whether they need to expense the software through depreciation or operational expenses.

“There are circumstances where the subscription is more financially attractive, there are times when the perpetual license is more attractive,” said Singh. “It’s about the total cost of ownership over time, however the [customer] chooses to define it … the math on that issue is not that complicated, and the good news about our user community is that they’re pretty good at math.”

Switching and Staying

Regardless of how much back-and-forth takes place between vendors, customers should be guided by careful evaluation of their own situation when it comes to licensing choices. Although upfront costs are lower, subscription plans may cost companies more over time than perpetual licenses, depending on their update frequency and staffing needs. And the costs of software don’t end with the product itself; training incurs expenses as well, and that’s a factor that may persuade many users to stay with a product that they already know rather than implementing something new.

Some AEC companies already use a combination of Bentley and Autodesk products, and will continue to do so. “We’re seeing a mix; it is true that most project delivery organizations do have experience with both [software] companies,” confirmed White.