During this week's quarterly conference call with financial analysts, Autodesk ceo Carl Bass described how the company plans to change ("business model transition") the way in which it wants its customers to pay "recurring" revenue.
So now let me talk about our business model transition. The start of our business model transition is a milestone event that will take Autodesk to a more recurring, subscription-oriented business over the next four years.
In many respects, we started the transition 10 years ago with the introduction of maintenance subscription, which has grown to become about 45% of our revenue mix. [Autodesk currently has 1.9 million customers on subscription.] We're now taking the next step in transitioning even more of our upfront license revenue [permanent licenses and upgrades] to recurring [annual subscriptions, short-term rentals, and monthly payments like for AutoCAD 360] over the next four years and beyond, as we build upon the maintenance subscription base with cloud service subscription and desktop subscription, formerly referred to as rentals.
Q4 was the first full quarter of availability for desktop subscription. While it's obviously very early, we're pleased with what we're seeing so far. A meaningful portion of desktop subscribers are new to Autodesk, and the majority is choosing the annual term-length option. We experienced good uptake of our M&E [media and entertainment division] products, which makes a lot of sense, as those customers tend to be much more project-based.
Another element of the business model transition is offering our enterprise customers more flexible licensing options. In addition to being a great benefit for our customers, these contracts create a larger recurring revenue stream, which is recognized ratably. Our enterprise customers have expressed great interest in this type of contract...
We received very positive feedback from our customers around this new pricing option. Some of our largest customers, including AECOM, URS, Fluor, and GHD, moved to the new option. With AECOM, we entered into a global, multi-year, enterprise-wide agreement, which provides all of their users with complete access to Autodesk desktop and cloud services in a flexible model to support their business strategy. It is deals like this that make me confident that these flexible licensing offerings will be a meaningful portion of our large enterprise deals going forward.
Later, he mentioned that AutoCAD LT would be available on a rental basis.