I have talked before about Microsoft‘s much-discussed Software-plus-Services strategy before (here, for example), and it strikes me that there is an interesting corporate parallel in Microsoft’s approach to the rise of Software-as-a-Service (SaaS) in the attitude of Autodesk, albeit on a different scale.

Like Microsoft, Autodesk has made its name by selling conventional, locally-hosted CAD software applications and has built up an enormous user base across its portfolio of products in the architecture, engineering and construction (AEC) sector, plus other markets. By comparison (and like Microsoft), its SaaS activities have been pretty low key….

At the beginning of this decade, Autodesk invested in and subsequently took over Buzzsaw, and in 2006 it acquired Constructware (see post), but otherwise its SaaS-related work has been mainly experimental – through Autodesk Labs (see CADaaS again, 5 August 2008), products such as Project Freewheel and Project Draw (see post), and even new icons. Autodesk doesn’t tend to publicise statistics regarding adoption of its SaaS solutions – and what few figures I have seen (see Autodesk Buzzsaw adoption, 11 July 2007, for example) have to be treated cautiously – nor does it detail its SaaS revenues in its annual accounts, but it is probably safe to say that they make up only a tiny fraction of Autodesk’s FY2008 $2.1 billion revenues. Even dramatic growth in its Buzzsaw/Constructware user base is not going to have a huge impact on Autodesk’s business.

However, with SaaS increasingly attractive to investors, Autodesk, like Microsoft, cannot afford to stand still. So, last week, it announced the introduction of a flexible software delivery model for its current ‘cash cow’: AutoCAD, providing customers with earlier access to new features, delivered on demand, and providing flexibility to choose which software features to install and use. About 75% of licensed AutoCAD users are subscription customers and will be able to choose ‘Subscription Bonus Packs’ containing the new software features. Product updates will also be automatically delivered to all licensed AutoCAD customers, providing faster and more regular access to patches and fixes.

Beyond desktop BIM

Of course, the foundation for most AutoCAD customers will still be conventional client/server software, so it’s not that revolutionary, and – for now – it doesn’t need to be. As I have discussed in previous CADaaS posts, we aren’t likely to see either Autodesk or Bentley Systems seriously challenged by a SaaS pure-play offering a competitive CAD or, better still, a collaborative BIM-type product, at least not in the short term. However, combine Autodesk’s flexible software delivery model with more developed versions of its Labs’ efforts and you have the foundation of a potentially world-beating BIM platform that could be delivered on demand. Stress-free’s David Harrison looks deeper into this possibility in a long, detailed and fascinating post, Autodesk Beyond Desktop CAD & BIM (subtitled: “or: How they Stopped Worrying and Learned to Love the Internet”).

Echoing Alibre’s J Paul Grayson (see Chewing the CAD), David argues that there are “vast, untapped reserves of potential customers for 3D tools in unconventional sectors, developing economies and the casual market”:

“Unfortunately trying to sell $1000-$5000 software to people who do not recognise the value, cannot afford the license fees or do not want to pay is an impossible mission. Cloud-based computing can potentially overcome these barriers through its ability to scale and be delivered to users at low cost.”

David then goes on to suggest a “shavers and razors” business strategy that includes online services, whereby Autodesk could lower the up-front cost of its software on the assumption that lost income will be recouped over the life cycle of the product. But he is also clear that such a strategy will require wholesale attitudinal changes within the “software behemoth”: “a significant portion of Autodesk’s 7,000+ staff will need to comprehend and fully support the idea,” even if the consequences include cannibalisation of existing products’ markets. I would add that it’s not just staff that need to be supportive – investors will also need to convinced about the strategy, as will customers, who will want to be reassured that there is a roadmap that will enable them to make an efficient and cost-effective transition from conventional software to SaaS-based applications.