Editor's Window1 May, 2006 By: Sara Ferris
Seductive subscriptions: Autodesk makes choice between upgrading and subscribing simple.
Autodesk's software subscription program is on track and thriving, with subscription revenue in 2005 surpassing upgrade revenue for the first time. Judging from your e-mails, however, a sizeable contingent of users isn't ready to sign on to subscriptions. "Where is the user value and return on investment under the current subscription model?" asks one Mechanical Desktop user. "I just can't see the cost-effectiveness."
With the launch of AutoCAD 2007, now is a good time for those not on subscription to evaluate whether they should be. To promote subscriptions, Autodesk has been focusing on both the stick (product retirements) and the carrot (annual upgrades). When you pencil out the costs, the subscription option makes the most sense. According to list prices from Autodesk's e-store, the AutoCAD 2007 subscription fee is $420 per year. Upgrades from previous versions are about $600 per version (from 2006 to 2007 is $595; from 2005 to 2007 is $1,195). The hitch is that you can upgrade only from 2004 onward—if you're using an older version, you must buy a new license for $3,995. The cost of a new AutoCAD license amounts to 9.5 years of subscription payments.
With AutoCAD LT, the subscription is $254 and the list price is $899, for a 3.5-year payback. Inventor Series 11 costs $1,095 per year for subscription and $5,295 for a full license, or almost five years to payback. Because actual prices can vary, you should ask your dealer to figure the costs of subscribing vs. upgrading.
The other option, of course, is to do neither, and become a proud member of the Release 12 Club. This works for those who are happy with their software as is and don't anticipate any compelling need to upgrade. Take a look at the new features that appeared in the past few new releases of your Autodesk products. Also consider how important it is that you be current with the DWG format. Autodesk seems to tinker with it every four or five years. The risk to this strategy is that if you do need to upgrade, you'll likely end up paying for a whole new license—much more than you would have otherwise.
Clearly, the subscription plan is good for Autodesk, and indeed, for just about any software developer. The developer starts each year with a portion of revenue already booked and collected, and the pressure to push upgrades is removed. Compared with other CAD developers, Autodesk was fairly late to adopt a subscription model, which has made it more difficult to convert long-time customers accustomed to upgrading as they see fit.
Are there benefits for end users apart from the cost savings if you intend to upgrade regularly? The subscription cost is predictable and can be budgeted for each year. There's no more need to convince management to spring for an upgrade every few years. You also get extras such as online help and training materials.
Keep in mind that just because you buy into the subscription program doesn't mean you have to buy into Autodesk's annual upgrade schedule. Our latest Web Quick Poll indicates little interest in upgrading yearly. The clear preference is to upgrade CAD software every 2–4 years. Bug Watcher Steve Johnson this month points out another good reason not to rush to upgrade: he believes the annual cycle encourages the release of unfinished (read buggy) features (www.cadalyst.com/bugwatch/). As always, do your homework before deciding if and when to upgrade.