Surf the Software Licensing Tsunami

17 Jan, 2017 By: Robert Green

CAD Manager Column: The move from perpetual to rental licensing is well under way — evaluate your needs and strategies now so you don’t get swamped.

It’s a new year, and that means making resolutions so we can all become better CAD managers than we were last year — right? Ordinarily, I’d say “Yes,” but this year there’s something more urgent at hand: the software licensing tsunami that’s bearing down on all of us. This change could affect CAD so profoundly that all CAD managers should make reviewing their software environment a top priority.

In this edition of the CAD Manager’s Newsletter, I’ll start the discussion of how imminent changes in the CAD software world might impact us, and suggest some coping strategies. Here goes.

Licensing Changes

Every tsunami needs a seismic event to set it in motion, and for CAD managers in 2017 that event is a tremendous shift in the way many of us obtain and license software. Some CAD software vendors have been moving toward a cloud-based/rental licensing model for years, but the trend has reached a tipping point as industry leader Autodesk has joined in. Autodesk, which already ceased selling new perpetual licenses, is now aggressively moving to eliminate perpetual software by offering special incentives and changing software package configurations. Autodesk’s move portends great change for the industry at large, given the commanding market share the company's flagship software tools, AutoCAD and Revit, enjoy in 2D and 3D CAD and building information modeling (BIM) market spaces.

What does this big push to rental software mean for CAD managers? For starters, be on the lookout for the following:

Costs will go up. If you don’t own your software, you can’t just keep running it forever after an initial purchase; you’ll have make rental payments year after year. As an analogy, it’s like renting a house with no option for purchase. While rental makes sense for those who don’t want to own a house or can’t afford the upfront costs, over time the rental option costs more than ownership for many. Software works the same way. And just like your landlord will throw you out if you stop paying the rent, your CAD licenses will stop working if you don’t renew your rental agreement.

Complexity will increase. If you must keep up with rental agreements for various software packages — and deal with the different licensing anniversary dates and terms — bookkeeping becomes more of a hassle. Factor in the increasingly likely scenario that you’ll need a unique license for each individual user (the “named user” mode of software licensing) or a more expensive per-seat network license, and now you’ve got a real administrative mess on your hands.

Upgrades may become problematic. If software companies choose not to offer upgrades for perpetual software, and new software packages are only made available via rental, even companies that currently own perpetual licenses will be forced to go the rental route eventually. Only you can decide if that will be a problem for your company.

As cost and complexity rise, cost analysis becomes critical. So, if costs for software — and the administrative time needed to manage it — are going up, it stands to reason that your company will want to understand exactly what those costs are. This means CAD managers will need to become part-time accountants who perform return-on-investment analyses for all the software they intend to rent.

Experience has taught me that when software costs go up, management will search for cost-reducing alternatives. So how might cost reduction work in a rental software environment? Let’s explore that next.

Cost Containment

As perpetual licensing changes to software rental with its increasing costs, expect your management to ask you how this will impact their budgets and how money could be saved. The answers to these questions will depend on your company’s circumstances, but a few of the popular options I’m seeing include the following:

Downscaling software. Rather than renting a full-blown suite of products at a higher cost per month, companies can switch to a more limited alternative that rents for less. Perhaps AutoCAD could be downscaled to AutoCAD LT, for example, or product suites that include all manner of software tools could be dropped in favor of simple AutoCAD.

Curtailing the number of users. When renewing annual support agreements for software was comparatively cheap, many companies blindly renewed all their seats. Now, with costs going up, it may be time to revisit that philosophy. Rather than continuing to put full software applications within reach of all possible users, companies can reduce usage by adopting free viewing apps and mobile-based software tools, such as Autodesk A360.

Freezing version usage. Rather than updating perpetual software licenses to rental versions, companies may decide to forgo updating entirely and run existing software until it no longer operates. For companies that aren't compelled to deliver/exchange files using the latest software versions and/or have little to no growth in user seats, this approach can be very economical.

Changing software products. Although switching to a different software application can be a very disruptive process, a large cost differential may make the disruption worthwhile. Given that there are many low-cost DWG-compatible software products available — and more are emerging — changing software products is an option that must be analyzed.

Considering the amount of time most CAD managers have spent getting their current software environment running, it is painful to think about a radical overhaul of software usage — but given the cost constraints, we may have no choice.

Your Next Steps

How can you prepare to face the challenges of changing the way your company uses CAD software over the next three-year budgetary time span? To get ready, you’ll need to determine the following:

  • How many software licenses you have currently.
  • How many software licenses will move to rental in the next year, two years, etc.
  • How many new software licenses will be needed in the next year, two years, etc.
  • How much will your software costs increase in the next year, two years, etc.
  • Do you really need all the software applications and seats that you currently have, or have you been blindly renewing?
  • What are your strategies for reducing software costs?

If you don’t know the answers to these questions, now is the time to find out so you can plan your budget accordingly, and be prepared when management starts asking for guidance.

Summing Up

My goal with this “tsunami warning” isn’t to startle you, but to give you resolve to surf the coming wave — and those that will inevitably follow. As this change in software licensing takes hold, we’ll start to see several other changes in our CAD environments, ranging from interaction with IT, to security, to remote application access that will require updated planning and management techniques.

Rest assured, we’ll be examining these trends in more detail in upcoming issues of the CAD Manager’s Newsletter. Until next time.

About the Author: Robert Green

Robert Green

Add comment


Re: Surf the Software Licensing Tsunami
by: jmaeding
January 18, 2017 - 7:51pm
The funniest thing is all we used to have to decide was if we kept a product on sub. The penalty for dropping a seat was huge so I did not have much of an argument with the business owners. Now adesk raises the prices so sub and rental will soon be the same, and removes the penalty for dropping sub (now rental) on seats, what do you think we're gonna do? I'm going to tighten things down for sure. BTW, that thing of adesk saying we will always be able to stay on maintenance sub has turned out to be a complete bait and switch. They are punishing us good for believing them that maintenance sub would stay cheaper for a long time. Adesk serving the stock market, or so they say, has made them sell their customer relationship souls. Not much shame left on their end so let the floodgates open.
Re: Surf the Software Licensing Tsunami
by: jmaeding
January 18, 2017 - 8:24pm
Also, welcome back!
Re: Surf the Software Licensing Tsunami
by: rkmcswain
January 19, 2017 - 7:29am
Welcome back Robert. I hope in one of your upcoming columns, you touch on the specific challenges of dealing with the Bentley licensing system, where management has little to no control of end-user software usage, and therefore costs.
Re: Surf the Software Licensing Tsunami
by: ehoogerhuis
January 30, 2017 - 12:32pm
Industry surveys show the typical organization is over-licensed by 30% - the difficulty is identifying which licenses are unused, could be replaced with a more cost effective solution, or could be more cost-effectively licensed. (Vendor plug) We're an application use monitoring start-up implementing a desktop-centric use model we believe can provide the information CAD, IT and Technology Managers need that isn't available through other monitoring or reporting tools. We believe a desktop agent is the only way to get granular, license independent use information on the applications in use today, and to gathering use info as applications (design, collaborate and render/simulation) move to the cloud. Send a note to and we'll share our vision.
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