What Kind of a Threat Does Autodesk Faces from China? (part 1)

by Roopinder Tara, Tenlinks.com

Autodesk, the heavyweight champion of the world, is about to take on a contender. This one’s from China. Gstarsoft invited me to their 3rd annual conference in Beijing where, with great fanfare, introduced their contender GstarCAD 8.

Being virtually unknown outside of China (80% of its sales) did not deter GstarCAD from laying out its plans for world domination, a confidence inspired by the success of Chinese manufacturers and a hope that this will somehow translate to the software. GstarCAD resellers were on hand to point to the inevitability of the business software market caving in to the just-as-good-for-a-lot-less philosophy China is adept at capitalizing on. Why would anyone in their right mind spend $4,000 for AutoCAD, when they can do everything with GstarCAD --for only hundreds of dollars?

It is a familiar refrain for CAD insiders. We’ve heard contenders, foreign and domestic, proclaiming that they will be the ones to knock out Autodesk out of the ring. Remember DataCAD, TurboCAD, VersaCAD, Ashlar Vellum...? IntelliCAD and all the AutoCAD clones it spawned? Even Draftsight, which is propped up by CAD heavyweight Dassault, is unlikely to do much damage. But none seemed to even have slowed Autodesk. Autodesk gets bigger and stronger every year. With annual revenue of billions, profits of hundreds of millions and a seeming endless number of 2D users only too willing to convert to its vertical applications, Autodesk is indeed in an enviable position. Bentley, a long way back in the #2 spot with MicroStation, has about a quarter of Autodesk’s revenue.

One might dismiss previous contenders as lightweights, but can you ignore China? China’s will and weight of numbers is sufficient to frighten established market leaders – in any market. The list of big American manufacturing industries that have suffered from Chinese competition is long. Can China’s success in manufacturing be duplicated with software? To aspiring Chinese contenders, Autodesk’s success represent a huge target, no different than a Chinese factory undercutting a domestic manufacturer of doorknobs, underwear, cameras, dog food, computers...and almost anything else you can think of. China has proven it can rule in making all sorts of physical and consumer goods. Almost the same, for a lot less. It works. We’ve all bought into it.

But here is CAD software selling for thousands of dollars. It makes no sense to the Chinese. It’s vexing that it has continued so long. Artificially priced, as opposed to value priced, like diamonds. Ready to cave in, they’re sure, like all the other industries.

It’s only going to take perseverance, some sustained pressure and patience.

[Reprinted with permission of CAD Insider.]

Comments

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