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AutoCAD

AutoCAD Subscription: Another View

5 Jul, 2006 By: Steve Johnson

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Cadalyst's Bug Watch columnist Steve Johnson discusses Autodesk's mandatory subscription program in Australia

Editor's note: In her editorial in the May 2005 edition of Cadalyst magazine, Editor-in-Chief Sara Ferris argued that the pricing structure of Autodesk's subscription program for AutoCAD leaves users little choice but to sign up. Cadalyst received a flood of mail following that piece, and we shared that feedback in the June 30 edition of Cadalyst Daily. The topic is a touchy one, indeed. Today we offer this article from Cadalyst's Bug Watch columnist Steve Johnson, who provides details about how the subscription program works in Australia, which may well be a harbinger of Autodesk's plans for the rest of the world.

I believe Autodesk will be moving to a compulsory subscription model for AutoCAD. Why do I think this? Because Autodesk has already started doing it. As it's done in the past with other potentially troublesome moves, Autodesk is unveiling this new program in Australia. The company did the same when it introduced hardware locks, then software locks. Autodesk makes the change in the relatively small Australian market to see if it causes a revolt. If the Australian experiment goes well, Autodesk then expands it to the rest of the world.

AutoCAD Subscription Program, Australian Style
This is how the AutoCAD subscription program currently works in Australia. If you buy a new AutoCAD seat, you don't need a subscription. However, if you upgrade an existing seat, you must sign on for a subscription. So if you're on AutoCAD 2006 and want 2007, you effectively have to pay two upgrade fees: one for the upgrade you're buying and one in advance for next year. You can buy a new copy of AutoCAD 2007 and not order subscription, but that's only a temporary reprieve, and there is a financial disincentive. Unless you want to be stuck on the same release forever, when you upgrade you are forced to sign up for subscription and pay a late fee. Here are the relevant figures in Australian dollars. (Prices are without Australia's 10% tax; multiply by 0.75 for US$.)

Cost of Upgrading AutoCAD 2006 to 2007

• Base upgrade cost: $725
• Subscription: $725
• True upgrade cost (including compulsory subscription): $1,450
• Buying AutoCAD 2007 without subscription: $6,400

Cost of Upgrading AutoCAD 2007 to 2008 (Assuming Prices Remain Constant)

• Base upgrade cost: $725
• Subscription: $725
• Late fee: $175
• True upgrade cost (including compulsory subscription and late fee): $1,625

Those who buy AutoCAD 2007 and pay for subscription will pay $7,125 total by the time they get AutoCAD 2008. Those who buy AutoCAD 2007 without subscription and then upgrade to 2008 will pay $8,025 total and are forced to join the subscription anyway. So, though it looks as if there's a choice when you are buying a new seat, that is illusory beyond the short term.

The pricing structure is slightly more complex than I've shown here. Upgrade prices rise incrementally throughout the product year to encourage people to pay up sooner. That's fair enough, but the message is clear: You'll eventually be on subscription regardless, and if you don't sign up now, you'll pay more later.

Good and Bad
Personally, I think the availability of subscription is a very good thing, and Autodesk is to be applauded for offering it. Many companies like the accounting certainty it provides. I don't have a problem with Autodesk making subscription cheaper than upgrading or providing other incentives to subscribers.

However, I do have a few issues with making subscription compulsory. My first concern is related to the cost implications outlined above. Autodesk is improving its cash flow at the expense of its users. Frankly, Autodesk doesn't need the cash, but you might.

Second, once every user has been forced to subscribe, there is nothing to stop Autodesk from hiking up the subscription price significantly.

You don't have to be an antimonopoly conspiracy theorist to think that this will happen -- Autodesk has already done it with its vertical variants of AutoCAD, such as Architectural Desktop, Mechanical Desktop and the like. Cheap upgrades have been offered to encourage people to move to the verticals. In one case, a subscription-inclusive offer made it cheaper to upgrade from AutoCAD 2002 to Map 3D 2006 than to plain AutoCAD 2006. The rub is that the ongoing annual subscription cost for Map 3D is 35% higher than it is for AutoCAD.

Finally, I don't think having everybody on subscription would be good for AutoCAD or its users. It would remove the major incentive that Autodesk needs to ensure that each new release is a significant improvement on its predecessor -- your upgrade cash. If everyone is locked into paying in advance for the next upgrade, why bother striving for excellence? Instead, why not save some costs and put AutoCAD development into cruise mode?

In all fairness, I should point out that Autodesk is not the bad guy in this market. I'm only raising this as an Autodesk issue because Autodesk is one of the few good guys that still offers users a choice between upgrade and subscription, at least for AutoCAD, and at least in most countries. I can't comment on Bentley Systems' subscription model because I don't use its products.

The continued availability of conventional upgrades is a competitive advantage that I think Autodesk would be unwise to throw away. I hope the Australian experiment fails and Autodesk reverts to using the carrot rather than the stick to encourage people to join its AutoCAD subscription program.

Correction and updates: Steve Johnson pointed out yet another drawback of an annual release cycle for AutoCAD: It makes it that much more difficult for writers to keep track of which release does what. The CUI was introduced in AutoCAD 2006, not AutoCAD 2005 as we indicated in the June 30 Cadalyst Daily article.

Charles Rogers of CADRE wrote in to note that Autodesk currently offers the Autodesk Legacy Program to users of retired software versions. Through July 31, such users can get 45% off the list price of the current version if they opt to joint the subscription, or 40% off without subscription. For AutoCAD, that works out to $1,798 plus $450 annual subscription fee, or $1,598 without subscription.

And Ralph Grabowski offers his own two cents on annual upgrades in the July 5 entry of his WorldCAD Access blog.