Is ADSK the canary in our coal mine?

The head of marketing for a CAD vendor writes me:

Everyone here is watching Autodesk pretty closely: Is it recession or bad management causing these issues at Autodesk? Soft demand in Europe is a huge worry for everyone, but Autodesk also reports a lack of demand in South America. Now, that's getting scary.

 

 

Comments

[Jon Banquer]

It's bad management.

All one has to do is look at how Autodesk Inventor has been marketed vs. SolidWorks to see how bad management at Autodesk is.

Autodesk's continued inability to purchase a CAM company is yet another sign of how poorly Autodesk is run and how much they have stayed from supporting the basics.

Jon Banquer
San Diego, CA
CADCAM Technology Leaders group on LinkedIn

[Daniel Santos]

Lack of demand in south America?

Well, I can't speak on behalf of other countries of SA, but I can say that it's not what I see in Brazil right now.

Software houses never had a so good moment like now...

[Ralph Grabowski]

Autodesk mentioned India and Brazil as specific concerns:

...results from
BRIC countries were mixed as growth from China and Russia was partially
offset by weakness in Brazil and India.

[Dave Ault]

Hi Ralph,

Gee do you think it might have anything to do with the announcement that Autodesk is going to force customers to the cloud with all their data?

Bad management choices primarily followed by the economy.

[Ralph Grabowski]

Er, no, it was these other reasons:

1. threat of increased prices in August didn't get customers to buy in July
2. world economy sliding back into a second recession
3. sales teams were reorganized, and so weren't clicking

[R. Paul Waddington]

CAM software aside (too specialized in reality to be a Saviour) Autodesk’s issues MUST be sheeted home as poor management.
The deterioration started at the top (some time ago) with Autodesk’s leaders developing attitude problems in relation to their customer base: propagating their attitude downward and in the process carefully re-crafting a valuable tool supplier into a self interested software factory with the main goal being to bleed customers.
The same management also turned Autodesk into a market follower. Whilst leading the pack management spent too much time looking over their shoulders at their competitors; they could see their extent of their lead but failed to understand their strengths, preferring to see the differences in competitors’ products as threats when in reality they were simply differences easily out run from the front and faced down with effective marketing, using dealers who understood the importance of the products versus sales volumes and, better support for existing users. Happy customers are hard to convert.
Inventor is one standout here – a goof ball side-shoot product Autodesk rushed to market which quickly became, and remains, a hobble to Autodesk and many customers who jumped that way.
Additionally, Autodesk’s management choose to segment their market and shatter their dealerships to the degree customers simply lost confidence in Autodesk, the company, and their dealerships in general. Service is non-existent and, Autodesk’s demonstrated inability and failures applying computing technologies effectively has further eroded customer confidence.

[Dave Ault]

Hi Paul,
Kind of an eye opening read there and I had no idea things were that bad. They have had a long run so in light of what you are saying do you think they are going to lose significant market share? And if so where will people go?

Ralph,
Answer a question for me. It seems as though every company has wonderfull sales numbers in their releases to the press. I never did see how everyone could be prospering in this kind of economic environment. Matt West for instance was saying how well SW sales were doing and I could not disprove his comments for lack of knowledge. It just made no sense to me though as I know SW is making a lot of unhappy customers and so how could things be "wonderfull" at the same time? What do you really think is happening with CAD sales in general in reality with the various major players?

[Giovanni Margherisi]

Hi

I would say my personal opinion:

I'm a italian designer and here the crisis(as in other countries) is really heavy and every decision or purchase must be well thought out...
well....I was considering buying an Autodesk software for the short future (Showcase)but after hearing that in a few years each program will be in the cloud,
I decided to go elsewhere.
For my job I want a good product, I don't want this kind of service with all the risks and problems which can cause
(and think so also all my colleagues and act like me).....I don't want be constrained to a forced renewal of license and I don't want my work on the cloud!

Clouding is a technology that should support the current technology and don't replace it, otherwise it is only business(for ADSK and similar) and not evolution ....and the risk is to create more difficulties to small industries, artisans and small studios already in deep crisis.

Maybe this is not the current problem for autodesk but it could be for the future....(especially for their users but these are only my humble opinions).

[Kevin E.]

If only they would have stuck it out with Mechanical Desktop, things would be different. (giant eye roll)

Dave, I don't get where you keep thinking that you will be forced to the cloud. As far as I can see, you took one comment from an interview and base everything off of that. We are no where close to being able to run programs in the cloud. It would work in some areas, but the internet has a long way to go before everyone has access to the speed needed to do this.

As far as the cloud goes, you guys keep thinking it has to be one or the other. It doesn't. The cloud can act as this thing that is a supplement to the way we work now.

[Dave Ault]

Kevin,
I agree with all the technical problem things you state. I don't think the people in charge of some of these companies do though and it is Dassaults and Autodesks intent to force many things to the cloud.

Look, I know the cloud has a place but it is most definitly not for CAD creation which has always been my concern. I do base my concerns on far more than just a conversation as indeed do many of my peers as you well know.

[R. Paul Waddington]

Hi Dave,
“And if so where will people go?” This is a very good question; one having many threads difficult to quantify. But just to take one component of the future: if we look at customers of ours, many of whom have been so for over twenty years and headed toward retirement.

Looming with the retirement group is a fact many of these guys are not being (or not going to be) replaced. Evidenced with statements from their employers as to the future of these positions and the management belief more cost effective solutions will be used – (temps/contract staff).

Contracting staff as a solution? It is already difficult to find good temps and when you do 45 year old or older is likely to be the age – few/no young guys (of value) to be found nor being trained. Now this situation does not bode well for those companies who believe there is a pool to be drawn on to replace their full timers when they bug off or retire.

In both these groups, and I would include myself in this category, there are some who will wish to maintain an ability to continue using CAD software. Partly for personal use in continuing existing hobby type work combined with an occasional excursion back into the commercial world. These guys are going to keep there “last versions” and will not upgrade. We already have a number of guys, as customers, in this category. Others will simply retire, be lost to industry, and their software left un-used and disposed of.

Now for the CAD vendors the early users form an integral and considerable part of yearly figures and that will change – still users in reality but not ones prepared to continue paying subscription nor upgrading as there will be NO financial benefits to be had from a later version (as has been experienced for a long time).

Now couple these facts: very poor service from a depleted ineffective dealer network, no cost effective or useful service and no new cost effective software from vendors (Autodesk in my sphere) and an aging user base could be the recipe for a decline in revenue Autodesk may well find very challenging and irreversible. The “cloud” will exacerbate the problem because the hold over the customer is less and as “loyal” customers become consumers their selection about where to “shop” to do a quick CAD job may become as fleeting a selecting as which shop to buy an ice cream or soft drink.

Business succession is never easy and if CAD vendors are not very careful their attitude too and their past, and current, treatment of customers will be their greatest hurdle – not their products. Autodesk is a Canary in our mine, without doubt!

[Steve Johnson]

CAD vendors are not going to the Cloud in order to free people up and allow them to easily move to other vendors. That won't happen. Instead, you will see tie-in on an unprecedented scale; that's the whole idea. Every possible technical, legal, commercial and strategic trick will be employed to give you no choice but to stay in and keep paying ever-increasing prices.

[gurjeet]

Business succession is never easy and if CAD vendors are not very careful their attitude too and their past, and current, treatment of customers will be their greatest hurdle – not their products. Autodesk is a Canary in our mine, without doubt!