Autodesk VP Explains Software Licensing Policy Changes8 Sep, 2015 By: Robert Green
CAD Manager Column: To gain more insight into Autodesk's switch to rental-based licensing, we sat down with Vice-President Andrew Anagnost.
In the previous edition of the CAD Manager's Newsletter, I provided some planning advice for Autodesk customers who must deal with the company's new policy that will end the sale of perpetual software licenses in favor of rental-based licensing starting in January 2016.
Not long after that issue was published, I was contacted by Autodesk's public relations department and was granted an opportunity to interview the Senior Vice-President of Industry, Strategy, and Marketing, Andrew Anagnost. I was given some information about the new licensing policies and was promised I could ask all the questions I wanted, so I jumped at the chance. I found Mr. Anagnost to be forthright and realistic, and I hope you find the conversation as valuable for your software planning as I have.
New Policies on Suite Products
Autodesk announced earlier this year that it intended to suspend sales of single-product perpetual licenses (such as AutoCAD or AutoCAD LT) in January 2016, followed by the perpetual license sales of its design-based suites (which are essentially product bundles) in January 2017. The company released a new policy announcement on September 3, however, that brings the timeline forward and will end the sale of perpetual suite licenses on July 31, 2016 — a full six months sooner than previously scheduled.
My conversation with Mr. Anagnost started with a brief overview of the policy changes, including a timeline of key milestones and a graphic contrasting Autodesk's views of perpetual vs. rental licensing models (see below).
Robert Green: So the suite-based perpetual licenses will go away sooner than expected? Why is that?
Andrew Anagnost: This is a big change for how Autodesk does business, and we expect things to be bumpy as the change occurs. That is a big reason why we've elected to move up the cutoff date for perpetual suite licenses — to complete the transition and move forward.
RG: Can you clarify what "bumpy" means?
AA: We know this is a new way to license software for many of our customers, so we will have to explain it. We fully understand that it will take a while to prove the concept to our long-time customers.
RG: I've heard you refer to the perpetual vs. rental software question as "a tale of two customers." Why is that?
AA: Yes, that is how we see it. Our most loyal long-term customers are our maintenance customers, while our new customers are fine with using rental licenses to meet their needs. In fact, they actually prefer it because they can buy into the software at a lower upfront cost and then bill those costs to their customers as a project expense.
RG: There is some uncertainty about whether "perpetual" really means perpetual. On the Autodesk web site, it says perpetual licenses can be kept on maintenance "for the foreseeable future," yet the press release says "in perpetuity." Can you clarify?
AA: We have no plans to discontinue maintenance subscription plans for existing perpetual license owners.
RG: But you can see how there could be confusion given the difference in wording, right?
AA: I assure you we have no plan to discontinue maintenance subscription plans for existing perpetual license owners.
Another major topic of conversation had to do with customer acceptance and what Autodesk terms the "customer experience" of a rental software mode of operation. This part of the discussion touched on many themes that are summarized in the comparative graphic below. I asked a few clarifying questions generated by the graphic as a follow-up.
Perpetual vs. subscription (rental) comparison matrix. Image courtesy of Autodesk.
About the Author: Robert Green
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Question/Comment: Cost of subscription is much higher than the cost of perpetual + maintenance. How do you justify that?
A 3-year subscription to most of our software is comparable to buying a perpetual license with three years of maintenance. Actually, in some instances the cost is less. I appreciate that in the past some licenses were used for extended periods. This often resulted in companies having many different versions of our software in use, which caused significant headaches for the user. We are hoping to address those headaches with our shift to subscription.
Question/Comment: The new licensing policy is a nightmare for large companies with thousands of users and hundreds of network licenses. Mixing the new subscription-licensing model into our existing process will create more confusion and additional work.
We are committed to making the experience better. That’s one of our motivations for shifting the way we deliver software. I get that the onus is on us to prove that. You may not be aware, but we already have offerings today designed to meet the needs of large organizations with large numbers and licenses. In addition, we will be introducing a term network option that can be deployed on the same license server as the current perpetual licenses. This should clean up some of the mess. Send a note via http://knowledge.autodesk.com/contactus and we’ll make sure someone gets to you with all the details.
Question/Comment: Is our content going to be held hostage if we stop paying for subscription? If I create a design, would I be able to access and print that design if I end my subscription?
The work and data you create using our software belongs to you. You can continue to access and view the designs that you have stored locally on your desktop. If you end subscription, and do not have a perpetual license, it is only editing those designs that will no longer be possible.
Question/Comment: Will you ever end maintenance subscriptions, yes or no?
Our lawyers frown on me using words like “never.” Do we have any plans to end maintenance? No we don’t, and our current intent is to keep the program running as long as our customers use it. Just like we don’t have plans to force customers to adopt subscription. If a customer wants to keep using their perpetual license, then they can continue to do so. If they want that perpetual software to be upgraded with the latest and greatest from Autodesk, then I encourage them to take advantage of maintenance. Keeping maintenance for our most loyal customers is the right thing to do.
--Andrew Anagnost, Autodesk
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