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How Will You Buy CAD Software in 2016?

9 Feb, 2015 By: Robert Green

Autodesk and other software developers are moving toward subscription-only access to software. The time to plan for the transition is now!


What About New Users?

Will your company be growing? Do you already need more licenses? If so, you need to consider whether to obtain more perpetual licenses within the next year before this option disappears.

Looking at the amortized costs above, you can see that if your company continually buys new software licenses, it is most likely smart to acquire the needed licenses before February 1, 2016, to lock in the downstream maintenance program's lower annual fees. If, however, company growth is not certain or any new software needs would be temporary, then a Desktop Subscription — perhaps even the monthly plan — makes more sense.

How should you proceed, then? Only you can decide this based on your best business forecasts. Basing decisions on business forecasts is not a new thing, but what has changed with respect to Autodesk software is that now you only have a year to make decisions that will affect your company for a long time.

Timing Your Move

Currently, letting an Autodesk maintenance agreement expire means facing stiff upgrade costs to reinstate the license at a later date. But under the new licensing plans, you'll be able to sign up for Desktop Subscription any time without any such "penalty." This presents new money-saving options for some companies.

For example, consider what would happen if you simply let your perpetual license plus Maintenance Subscription agreement expire. The annual cost for this software will revert to zero until you need to upgrade, and you'll pay nothing extra when it's time to make that move (and sign on to Desktop Subscription).

Another scenario to consider would be if you own a perpetual license (without maintenance) of a standalone desktop product — say, AutoCAD — but plan to upgrade to an Autodesk software suite later. This practice, often called a cross-grade, has been advantageous in the past because Autodesk has offered financial incentives to their perpetual license/maintenance holders to do so. But because perpetual licenses for many standalone products are going away, there's no guarantee that cross-grading will be available in the future. So, in this scenario you could let the perpetual license expire, and then run the software for two more years before moving to a Desktop Subscription for the product suite.

Yet another option to consider would be letting a license lapse and replacing it with a Desktop Subscription to a lower-end product. For example, if you have casual AutoCAD users that could get by with AutoCAD LT, you could allow the AutoCAD perpetual licenses to lapse and replace them — eventually — with AutoCAD LT Desktop Subscriptions. In this case, the annual maintenance cost for AutoCAD ($545) would be eliminated in the short term then replaced with the annual rental cost ($360) when it comes time to upgrade the expired AutoCAD tool.

These are just a few of the what-if scenarios that could surface as licensing policies change and you consider all the possible ways you could proceed.

Summing Up

I hope this advice will help you plan for new software licensing policies — whether you use Autodesk software or others — and help you get started forecasting your company's future software costs. As licensing policies change, one thing stays the same: It always pays to examine your options closely to get the most for your money. Until next time.

Readers: What do you think of Autodesk's recent announcement, and how do you view the general move toward eliminating perpetual software licenses? Please e-mail me your thoughts at rgreen@cad-manager.com if you'd like to share.

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About the Author: Robert Green

Robert Green

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Comments

Re: How Will You Buy CAD Software in 2016?
by: jmaeding
on:
February 11, 2015 - 5:47pm
seems like the big question is if and when they will do this for suites and other products. I do not think the market will bear too much of a price hike in general before switching to things like Bricscad for 1/5 the cost. I have a few places asking for help doing the conversion, and its actualy quite easy as long as you have the code to any add-on tools or the author of them supports bcad.
 
Re: How Will You Buy CAD Software in 2016?
by: R.Paul Waddington
on:
February 12, 2015 - 10:43pm
Robert, it might be a good idea to say/define a perpetual licence as being a licence which allows continual (no time limit) use, for no additional cost. You do not own Autodesk software you licence its use.
 
Re: How Will You Buy CAD Software in 2016?
by: cadcoke5
on:
June 3, 2015 - 4:33pm
I first learned of this policy when I spoke to a dealer today. The company I work for had been using BricsCAD, and I was looking to purchase one of AutoDesk's products. My immediate response was, "There is no way will I be purchasing an Autodesk product now!" This policy would, in essence, mean I need to "rent" access to my own drawings in the future. I have known Autodesk to try to prevent me from using my own work in anything other than Autodesk products. They work hard to keep people from reverse engineering the DWG format. Those who use the upscale products are in even worse situation. This is even for products that are in DWG format. Of course, the whole subscription monster conquered the CAD software world with great success. It meant that software vendors no longer needed to make upgrades that earned their upgrade fees. I hope this newest idea dies on the lab table of Dr. Marketing Frankenstein.
 
Re: How Will You Buy CAD Software in 2016?
by: raj
on:
February 23, 2016 - 4:34pm
The issue with subscription/rental/pay-as-you-go licencing is that there is nothing to hold the software vendor to account. When introduced the price is reasonable, but as the number who now HAVE to be on such licencing increases, the vendor now has the upper hand. There are many examples of such software where the software just climbs and climbs in price. There is also now little incentive to really improve the product. These licencing schemes are introduced to increase the revenue stream, and to guarantee it. Shareholders will NOT be satisfied if their return merely keeps pace with inflation. This is risky, and they are much better off by just putting their money in the bank. Shareholders want to see a return that is ABOVE the rate of inflation otherwise they will take their money elsewhere. The result is that prices will have to rise at a rate higher than inflation and this is what those on such licencing will be hit with. Now, if they want to access the intelligence they have in THEIR data, they will have to pay whatever is demanded by the software vendor. There is a well known accounting software that did this a while back, and they suffered. They also tried something like authorising the data file. So, anyone could download and install the program, however to do anything, you had to purchase a licence for the data file. No problem when it was a perpetual licence for the data file. It became a major issue for users when everyone went on to annual subscription. Now, you HAD to have a valid licence for your data file to be able to even access it. In the case of CAD, it is not all about lines arcs and circles. Each of those objects can have a whole lot of data attached to them that gives the drawing intelligence, and a viewer does not give you access to that intelligence. Couple that with the price premium we have to pay, and you can see why there has been a surge in purchase of perpetual licences for AutoCAD to beat the deadline. This will show a healthy revenue stream and no doubt push the share price up, but is is a short lived blip, and when markets realise this, there will have to be something else happen to keep shareholders happy. The simplest way to achieve this is to increase prices of the now pay-as-you-go system. I have been trying to find the cost of AutoCAD in the US for quite a while. I just updated from 2006 to 2016. I say updated, because there was no consideration given at all, so I have two legitimate perpetual licences. The difference here is that while you pay USD 4,195, I had to pay AUD 5,950. Even the maintenance subscription was AUD 800/year and not USD 545/year. Even with the exchange rate, we pay a significant amount more, and even when the AUD was worth more than the USD, the numerical dollar difference was the same. So, was it worth it? Well, for me, going from 2006 to 2016 it was. For many who were keeping up on more regular schedule, I would say not really. For those previously on subscription, many are now nervous because subscription rates had downward pressure on them by the ability to take up perpetual licences. Now that that is no longer the case, many are bracing for big increases in their CAD costs. I am not talking about small operations. I am talking of multi-nationals who are running financial simulations with a whole lot of "what ifs" to see how it will affect their operations. As for looking elsewhere, in the early 1990's I was asked to present a paper at an ACADS seminar on CAD Data Exchange. It was a major problem switching applications then, and is only many times worse now.
 
Re: How Will You Buy CAD Software in 2016?
by: Robin Capper
on:
February 23, 2016 - 6:49pm
Good article, The Register also found another aspect of Desktop Subscription which benefits Autodesk. Their product sales cost 50 per cent more than subscription sales, so reduction in costs comes with the increase in revenue. See the table (and comparison with Adobe) in this article http://www.theregister.co.uk/2016/02/04/autodesk_announces_redundancies_...
 
Re: How Will You Buy CAD Software in 2016?
by: cadzookz
on:
February 23, 2016 - 7:19pm
I will be dropping the use of autocad. and will use another software I can purchase to "own." . I have already done this with the MS Office software and replaced it with an alternative, as they too have gone the way of "subscription" B.S.
 
Re: How Will You Buy CAD Software in 2016?
by: DaveW
on:
February 24, 2016 - 5:13pm
Looks like this will be the year of the 2016 software that have to be used for several years because most of us will buy the perpetual license. I did. I can't afford the subscription deal anyway, maybe big businesses will along with multiple license seats. To me, it's just a deal where Autodesk won't see anymore low income months because nobody is buying. The subscription is a steady inflow of cash. I'll use my current perpetual license(s) until they come back again.