Autodesk Delays Implementation of Named-User Licensing Approach

CAD Manager Column: The move from perpetual or floating network licenses to named-user licenses has been pushed out to August 2020, but it is definitely still happening — so CAD managers need to prepare now.

In the previous edition of the CAD Manager’s Newsletter, we explored Autodesk’s announcement that it would retire network licensing by May 2021, in favor of a 100% named-user subscription licensing approach that would begin in May 2020. Right after publication, I was contacted by Autodesk's PR team. Autodesk asked me to share some additional information that may help clear up some of your questions, and to inform my readers that in response to the business turmoil created by COVID-19, the date for implementation of the plan has been moved to August 2020 (and the retirement date moved to August 2021).

This forthcoming change in licensing policy is somewhat intricate, and has generated a lot of questions from readers, so in this edition of the CAD Manager’s Newsletter I’ll provide some clarification on the changes that will have the most impact CAD managers. Here goes.

The Basics

If you’ve not had a chance to look at the announcement video Autodesk released on February 24, 2020, I suggest you take a moment to do so (remembering that the May dates included therein are now pushed back to August). It contains some of the details of this announcement that were clarified in my conversation with Carl White, vice president of business models and pricing at Autodesk (which we’ll delve into shortly).

Many questions about these policies can be answered by visiting the FAQ entry in the Autodesk Knowledge Network, which was published right after the announcement. I’ll not reprint all the FAQ responses here, but I do want to highlight a few of the new policies as they pertain to CAD managers with network licenses:

• Transition to named-user licensing. 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 manager to share licenses among multiple users.
   
• Existing network licenses may be renewed at the same price until August 2020, while new network licenses may be obtained at the 33% price increase that was announced in February 2020. This has the effect of allowing you to increase your network license pool now and postpone the trade-in date for a year (see Trade-ins further down in this list).
   
• Existing maintenance plans for remaining perpetual licenses will go up 20% in August 2020, and will not be renewable other than via the trade-in offer (see Trade-ins below).
   
• Trade-ins begin in August 2020. After August 2020, at your next renewal date, any network licenses may be traded for two named-user subscriptions. If this trade-in is not completed prior to the cutoff date of August 2021, then network licenses will either run in legacy mode with no ability to access the latest version or can be converted to single-user subscriptions.
   
• No more network licenses or perpetual maintenance after August 2021. As of August 2021, the FlexLM license manager (which resides on a company server, behind its firewall) will no longer be supported, as license tracking will be moved to Autodesk servers and perpetual maintenance renewal will no longer be available.

There are some cases — such as existing multiyear subscriptions that run past August 2021 — that fall into grey areas of the policy, and those cases should be resolved with your reseller. But the inescapable conclusion is that by August 2021, you must either convert fully to named-user licensing or lose your right to renew network or maintenance programs.

I asked Mr. White, “Why make the change to named-user licensing now?” and he replied, “By helping customers move to subscription over the last several years, we have been able to know and serve customers as individuals, and deliver the value they increasingly expect. Today, approximately 80% of Autodesk customers are accessing our software on a named-user plan. This effort is to help the remaining 20% so they can start benefiting from this improved experience.”

Questions I’ve Received

As you can imagine, this change in policy has raised questions among CAD managers. Here are the ones I have received most often from my readers:

• What does “named user” really mean?
   
• How are named users tracked?
   
• What is the “Premium Subscription” mentioned in the announcement video?

Understanding these terms is crucial, as they will all impact the decisions you make as you plan for your company’s actions between now and August 2021. Let’s tackle these issues and list some diagnostic questions that CAD managers should ask themselves to prepare for upcoming budgets.

Named-User Considerations

Named-user licensing means that each user — based on either an e-mail address or network login account validated via single sign-on (SSO) — must have a subscription account to use the software, regardless of how frequently (or infrequently) that person might use it. These accounts are maintained by Autodesk at their servers, which will track usage metrics data.

The move to named-user licensing means CAD managers must consider the following questions:

• How many named-user subscriptions will network license manager companies 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), either accidentally or maliciously?
   
• How will you know who is using which licenses — and where — so you can be assured of licensing compliance?
   
• Who will manage the creation of the new Autodesk subscription accounts: you or IT personnel?

Licensing and the Premium Subscription

A product offering introduced in the video announcement — Premium subscription — was a topic I wanted clarification on, so I asked Mr. White to walk me through it. I should point out that the Premium subscription product is not just for network license manager users; it could be for any larger company wishing to implement SSO or monitor usage. The best way to understand the offering is to view the screenshot below.


A comparison of Standard and Premium subscription options.

Mr. White stated, “Our new Premium plan is recommended for any customer with 50 or more subscriptions that needs a higher level of administration, reporting, and support for the large number of users they manage.” He went on to highlight the top Premium features as follows:

• User-level reporting: View and export product usage to see which individuals are using each product and version, and their frequency of use.
  
  (Author’s note: Without Premium subscriptions, CAD/IT managers will find it harder to know which named users (identified by e-mail address) are accessing subscriptions, and it would be entirely possible for former employees to keep using a subscription, or for multiple users to utilize a single address (like joeuser@xyzcorp.com) at multiple locations. These gray areas could either cost the company money (via license consumption from former employees) or risk non-compliance (if multiple users at different offices utilized a single subscription).
   
• Single sign-on (SSO): Users sign in via company network credentials to access products.
  
  (Author’s note: SSO management means that users who leave the company or are not normally permitted access to CAD applications can be excluded from license access. And for corporate users already logged into the company network, sign-in to Autodesk tools will be automatic under the user’s normal login credentials. In both cases, managing the named user accounts manually would require IT effort and constant vigilance to assure license compliance.)
   
• 24 x 7 real-time voice support: Admins can request to speak with an Autodesk specialist for help with technical issues.
  
  (Author’s note: This support is available for named administrators, not all users.)

The cost of the Premium subscription program is $300 per user subscription, and must be purchased for all named-user subscriptions. Based on the possible usage and compliance problem scenarios listed above, I believe most larger companies will want Premium subscription.

Cost Computation

Mr. White expressed some concerns about how I addressed the cost computation correctly in the last newsletter, and offered the following graphic as an illustration of how the process would work for a couple of small companies.



Let’s look at the first case year by year, but let’s also consider what happens if 15 total users are currently sharing the 5 multi-user seats of AutoCAD:

Last year:

• Renew 5 multi-user seats (at $2,820) to support 15 users

Total cost = $14,100
___________________

This year:

• Trade in 5 network seats for 10 named-user subscriptions (at $1,410 each) = $14,100
   
• Purchase 5 additional subscriptions for users 11 through 15 (at $1,600 SRP each) = $8,000
   
• Purchase 15 additional named-user Premium subscription upgrades (at $300 per user) = $4,500

Total cost for 15 named users = $26,600 ($22,100 without Premium)
___________________

Next year:

• Renew 15 named-user subscriptions at same prices as above
   
• Purchase new subscriptions for any new hires as company grows at prevailing price
   
• Renew Premium subscription at same prices as above

___________________

Mr. White confirmed my pricing scenarios on our call, but stated that the vast majority of Autodesk multi-user (network) licenses support two or fewer users per network seat. I can’t verify or refute that claim, but clearly, if your company supports more than two users per network license or if your company grows, you’ll need to purchase more subscriptions at the prevailing price point — not a discounted rate.

Larger Company Example

As a quick example, if a company has 125 users in two branch offices that share 50 multi-user network AutoCAD licenses at a 2.5-to-1 ratio (see graphic above): Network licenses are valued at $2,820 per seat and individual new subscriptions are valued at $1,600. Furthermore, moving to named-user licensing will almost certainly mean that the Premium subscription upgrade will be desired for SSO access and license metrics data, so the following scenario will apply:

Last year:

• Renew 50 network seats (at $2,820 each for 50 seats) to support 125 users

Total cost = $141,000

___________________

This year:

• Trade in 50 network seats for 100 named-user subscriptions (at $1,410 each for 100 seats) = $141,000
   
• Purchase 25 additional named-user subscriptions (at $1,600 per user) = $40,000
   
• Purchase 125 Premium subscription updates (at $300 each) = $37,500

Total cost for 125 named users = $218,500 ($181,000 without Premium)

Total cost for 100 named users with Premium = $171,000

___________________

Next year(s):

In upcoming years you’ll renew your existing subscriptions, which is a bit more complicated than it may seem if you consider the following:

• Autodesk has stated that any network licenses traded for named users (100 of them in our large company example above) will experience pricing increases of not more than 5% every other year for the next 8 years.
   
• Any additional subscriptions (there are 25 of them in our large company example above) will be renewed at the prevailing or contract renewal rate you negotiate.
   
• Any new subscriptions (due to company growth) will need to be purchased at the prevailing rate.
   
• If you elect to use the Premium subscription option, then all subscriptions will need to be covered by the Premium subscription offer.

Of course, not all companies will experience this type of scenario, and you must plug in your own cost numbers, but 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 Questions

As you can clearly see from the examples presented, moving from old perpetual or network licenses to named-user licenses requires study — and could have a large financial impact, depending on your particular company’s needs, so it pays to do some homework. Here’s the data you need to gather:

• How will the loss of network licensing and/or maintenance on legacy perpetual licenses impact your company?
   
• How many subscriptions will you need after you trade in your network licenses, and how might that increase costs?
   
• Will you need premium subscription upgrades to facilitate SSO and license reporting, and how will that increase costs?
  (Author’s note: In my opinion, most larger companies will want this option.)
   
• How will growth in users over time increase named user subscription requirements, since those users can’t simply share network licenses as they may have in the past?
   
• How much IT/admin time will be required to navigate the shift to named-user licensing in the year when implementation occurs?

As always, each company is different, and every CAD manager will have different data to consider, so it is up to you to do the math and understand what this change in policy will mean for your company.

Summing Up

I hope these articles about Autodesk’s policy change on network licensing have helped you better plan for the future. If you have any additional questions, please send them to me, and I may do a follow-up newsletter later this summer as the August date for trade-ins approaches. And feel free to interact with other CAD managers who are discussing the topic at my Facebook group, CAD Managers Unite!

In our next issue, I’ll continue my exploration of CAD Management 3.0 by starting a series on a topic near and dear to all of us: CAD standards. Until then.