Low-Cost 2D CAD: Could it Happen?

When you crunch the numbers, the answer emerges

Note on my CAD Manager’s Survey: Thanks to everyone who participated in my 2005 CAD Manager’s Survey.  With 550 responses from all over the globe to an expanded base of questions, I believe this year’s survey will be the best ever.  In addition to hard data, such as salary numbers and management trends, the results have also generated more topics for coverage in next year’s newsletter, so thanks again for participating.

Keep your eyes peeled for the November issue of Cadalyst magazine as well as the mid-November issue of the CAD Manager’s Newsletter for some of the results. 

Low-Cost 2D CAD

I receive regular questions about low-cost alternatives to AutoCAD from current and aspiring users.  Almost all the questions come from smaller companies that are struggling to keep their software legal under increasingly competitive business pressure that renders every dollar valuable.   The questions break down along one of the following tracks:

· Can you recommend something cheaper than AutoCAD?

· I’m being forced to upgrade my current version of AutoCAD and want to know if there’s anything else we could use?

· I don’t want to pay for annual subscriptions when I typically upgrade only every other year. What can we do to save money?

· If I let my licenses lapse and use what I have for a few more years, will there be a promising lower-cost option available in the future?

When I reply to these messages, I encourage people to really think through their processes and figure out how integral AutoCAD is to their workflow.  Most will admit, when pressed, that they would be stopped dead in their tracks if they didn’t have AutoCAD or AutoCAD LT. 

The prevalence of AutoCAD has led me to examine what it would really take to replace AutoCAD with a low-cost alternative product.  I’ll be interested to see whether you agree with my conclusions.  Here goes.

Market Realities

Before we talk about replacing AutoCAD, we need to put on our business hats and acknowledge some realities that exist in the marketplace.  So stick with me while I present this information. We’ll need it later.

The current market specifies AutoCAD DWG most of the time. Just try going through a government contract bureau for architectural or civil engineering projects and find anything that deviates from DWG.  When the file format isn’t DWG, it is most often MicroStation’s DGN.  And when MicroStation boasts that it can work with DWG files as easily as its native DGN format, it speaks volumes about the lock AutoCAD’s DWG format has on the market!

The existing labor pool knows AutoCAD. In a 2D CAD world, AutoCAD is simply the gold standard software.  Any package other than AutoCAD will necessitate user training or hiring from a smaller, and therefore higher-cost, pool of applicants.  Other software publishers know this, and thus struggle to make their applications resemble AutoCAD as much as possible, which further confirms AutoCAD’s dominance.

Any software has to cost something. It’s difficult to envision a working CAD program that would cost less than $500.  The reference standard for a low-cost 2D DWG-compliant software package will always be AutoCAD LT, which currently costs roughly $800 new or $300 to upgrade from AutoCAD LT 2002 to LT 2006.  Either way, you can see that a low-cost package would have to compete with AutoCAD LT to gain any attention.

Most companies already have AutoCAD and purchase relatively few new licenses.  Therefore, the main cost factor to consider is not the new license cost, but the cost of keeping the software on subscription.  Using AutoCAD as an example, the savings you achieve by not renewing your $420 per year AutoCAD subscription cannot possibly be higher than $395, which really isn’t a lot of savings compared to an average annual salary.

The Fantasy Scenario

So if there were an alternative to AutoCAD, what would it cost to actually switch to it?  Let’s consider a fantasy scenario in which a competitive software package is available to you, for free, and that it functions so much like AutoCAD that you can install the software, configure it, learn it and overcome any lost productivity time in a matter of 20 hours per user.  (Note: We can already see that this scenario is pure fantasy, because we know software cannot be free, and I’ve never seen a software package that could be installed, configured, taught and learned in 20 hours.)

Let’s now say that the average cost for all the labor we need to switch to this new, free CAD software is $20/hour, or $400 total when you consider all 20 hours spent per user.  (Note:  The $20/hour number is also fantasy, because CAD management and IT time required to install and configure software, along with training, is typically much more expensive.)

Let’s now draw some conclusions:

The fantasy scenario doesn’t pay back.  Even if somebody gave you software that ran almost perfectly and you had an atypically inexpensive workforce, you would still spend just as much on the new software as on a one-year subscription for AutoCAD.

If the software costs $500, the case gets worse.  When the fantasy scenario is updated to include software that actually costs something, you would probably be able to purchase two annual software subscriptions for AutoCAD.

If the software costs $500, AutoCAD LT looks very inviting.  If you really wanted to let your AutoCAD licenses lapse, you could simply buy AutoCAD LT a few years from now and be just as well off as buying some sort of low-cost AutoCAD substitute that wouldn’t have the completely familiar AutoCAD interface and bulletproof DWG file support.

Checkmate Autodesk?

You can spend some more time running hypothetical analyses on AutoCAD replacement software if you’d like, but you’ll keep coming to the same conclusion: There’s almost no reason for an existing company with AutoCAD licenses to use anything other than AutoCAD or AutoCAD LT.  So is there a reason we don’t see any real competition for AutoCAD or AutoCAD LT in the 2D CAD market?  You bet.  Autodesk has locked up the market and priced its products to keep it that way.  Checkmate.

Of course, a brand-new design company could purchase a CAD package that costs less than AutoCAD, but workforce limitations -- that is, who that company could hire -- would probably lead it back to AutoCAD LT as the only viable low-cost option anyway.

But What About 3D?

Now that’s a totally different question with totally different metrics that we’ll dig into in the next edition of the CAD Manager’s Newsletter! 

Wrapping Up

I’m fully aware that I’ll receive a raft of e-mail from PR firms that represent low-cost 2D CAD companies telling me about all the features of their products and their low price points.  And while I’ll keep my eyes and ears open for promising technologies, I don’t expect to see any vendor circumvent the economic realities I’ve outlined here.

I welcome your responses, pro or con.  E-mail your thoughts to me at rgreen@greenconsulting.com.

Please join me in the next edition when we’ll examine the viability of low-cost 3D CAD.  Until then.