Autodesk Begins Move to Named-User Licensing

CAD Manager's Newsletter: Transitioning from perpetual or floating network licenses to named-user licenses will have a substantial financial impact for your firm, so start analyzing your specific needs immediately.

Autodesk has announced that by May 2021, it will stop offering network licensing and maintenance, and there has been a lot of reader interest in the topic. Because so many CAD managers are responsible for supporting Autodesk products, when the company makes a big change to its licensing policies, it is big news for our profession.

In this edition of the CAD Manager’s Newsletter, I’ll shed some light on what’s happening and try to make some sense of the uncertain terrain many CAD managers will find themselves in as they attempt to explain the situation to their management teams. Here goes.

The Basics

Let’s start with the announcement itself, which came in the form of a video released on February 24, 2020: Autodesk announced that the company “is moving completely to plans that are based on people, to provide you with an improved experience.”

In plain language, this means that Autodesk is transitioning to a named-user licensing scheme, where each individual user must maintain an account (like individual Autodesk subscriptions work now) rather than using a network license or perpetual serial number. This change means that those companies which still have maintenance plans on perpetual licenses will no longer be supported (after the next renewal date or May 2021 at latest), and that those using network licensing (FlexLM) will no longer be supported either.

The news about the end of network licensing is given additional significance by the 33% price increase on multi-user subscription licenses that went into effect on February 7, 2020. The video states that network licensing users will be offered a two-for-one exchange (two named user subscriptions for each network user) at a “similar price” to what they pay now. We’ll explore the potential costs in the “Cost Computation” section below.

The Fine Print

If you’re like me, you have questions after viewing that video. It turns out a bunch of other people did as well, and Autodesk very rapidly created a FAQ entry in the Autodesk Knowledge Network to address the issue.

I’ll let you read the full FAQ on your own time, but the following sections touch on some highlights that should be of particular interest to CAD managers who are determining how the changes will impact them.

Existing Maintenance and Network Users

If your company has existing perpetual licenses on maintenance, or multi-user (network) licenses, things start to change at your next renewal date. The biggest changes will be as follows (these are direct quotes from the FAQ):

• Trade-in one standalone maintenance (perpetual) seat for one standard subscription for one named user at a price similar to what you’re paying in 2019 for maintenance.
   
• Trade-in one multi-user subscription or network maintenance seat for two standard subscriptions for one named user each at a similar SRP [suggested retail price] you’re paying today for your existing seat or subscription.
   
• At time of trade-in or later, choose to upgrade to a higher plan for more advanced features, such as single sign-on [SSO] and detailed user reporting.
   
• If you do not take the trade-in offer, maintenance prices will increase by 20% on May 7, 2020. Subscriptions with multi-user access and maintenance plans will retire on May 7, 2021 and cannot be further renewed.

I’ve translated these changes into “CAD manager language,” as follows:

• If you still have perpetual licenses, you can renew maintenance at a 20% higher rate for now, but before May 7, 2021, you must either convert to named-user subscription or lose the right to renew maintenance.
   
• If you have multi-user (network) perpetual or subscription licenses, you must trade them in for two named-user subscriptions prior to May 7, 2021.
   
• As of May 7, 2021, perpetual and network licensing will be retired and your company will be forced to use named-user subscriptions.

Defining ‘Named User’

Understanding this term is crucial for your budget planning as you move into mandatory named-user licensing in May 2021. I’ll strive to keep this simple: Named-user licensing means that each user (based on e-mail address) must have a subscription account to use the software, regardless of how frequently they might use the software. These accounts are maintained by Autodesk at their servers, which will track usage data via as-yet-unspecified methods.

This brings up a few immediate questions:

• How many named-user licenses will you need? (For example, if you have 50 users sharing 15 network licenses now, you’ll need 50 named-user subscriptions in the future).
   
• What happens if several employees utilize the same e-mail account (User1@company.com, as an example)?
   
• How will you know if you’re in compliance at any given time (especially in larger firms)?

The Premium Subscription

The answer to the last two questions above appears to be a premium subscription (see 1:40 in the video) that will be priced at an additional $300 per user, and will facilitate SSO and licensing compliance reporting for CAD/IT managers. If this reporting is required in your company, then you’ll need a named-user subscription plus a premium upgrade for each user account.

Cost Computation

As a quick example, if a company has 150 users in two branch offices that share 50 network licenses: Network licenses are valued at about $2,125 per seat (after this year’s 33% price increase; they were $1,600 last year, and I’m rounding slightly in these calculations) and individual new subscriptions are valued at $1,200. Further, moving to named-user licensing will most likely mean that the premium subscription upgrade will be required for SSO access and license compliance metrics data, so the following scenario will apply for our example company:

______________________

Last year:

• Renew 50 network seats (at $1,600 for 50 seats) to support 150 users

Total cost = $80,000
______________________

This year:

• Trade in 50 network seats for 100 named-user subscriptions (at $2,125 each for 50 seats) = $106,250
   
• Purchase 50 additional named-user subscriptions (at $1,200 per user) = $60,000
   
• Purchase 150 premium subscription updates at $300 each = $45,000

Total cost for 150 named users = $211,250 ($166,250 without Premium)
______________________

Next year (including a predicted cost increase not to exceed 5%):

• Renew 150 named-user subscriptions:
  
  • 50 former network seats (which were swapped for 100 named users) at $2,230 each = $111,500
     
  • Plus 50 at $1,260 = $63,000
     
• Renew 150 premium subscription updates at $315 each = $47,250

Total cost for 150 named users = $221,750 ($174,500 without Premium)
______________________

Of course, not all companies will experience this type of scenario, and you must plug in your own cost numbers to come up with a tailored estimate. However, for large companies with an unmanageably high number of users sharing network licenses at a 3:1 ratio, this scenario is very realistic. And even if the Premium subscription is not purchased, the cost still goes up.

Budget Disruption

Moving from old perpetual or floating network licenses to named-user licenses will have a substantial financial impact for your firm, so you should carefully analyze your specific needs and be sure you understand — at minimum — the following:

• How many subscriptions will you need this year, and how much extra will that cost if you need to compensate for lost network licenses?
   
• Will you need premium subscription upgrades to facilitate SSO and license monitoring to stay in licensing compliance?
   
• How will renewal costs for next year go up due to the increased number of subscriptions supporting all named users?
   
• What kind of discounts will you be able to negotiate for new subscriptions?
   
• How much IT/admin time will be required to keep track of named users and usage data to assure compliance, as compared to an annual one-hour upgrade to the FlexLM license server?

Of course, every company will have different answers to these questions, but the burden is on us — the CAD managers — to make sense of these policies and understand the cost impact. Do not let this be a surprise budget item later this year!

Summing Up

Clearly, this change in policy is going to cause additional work for CAD managers and IT departments at firms that use maintenance perpetual and/or network Autodesk licensing. Affected CAD managers should start planning right now to determine how best to deal with the situation.

I fully expect that this story will continue to evolve and that policies might change between now and May 7, so I will keep a close eye on this story and keep you updated.

Editor's Note: Click here to read Part 2 of this series.