This post originally contained assertions about Autodesk’s financials that were based on flawed understanding, and has been removed. It’s not really possible to delete things from the Internet, so if you ever want to relive the joy of seeing me get things spectacularly wrong, feel free to use the Internet Archive to do so.
Hi Steve,
I’m not defending Rental, but I would like to point out that Rental products don’t have a high upfront cost like perpetual. So If Autodesk sell exactly the same number of seats, they will make less money in the short term.
Profit alone isn’t a good measure of the success (or failure) of Rental licences.
The past year or so has been people’s last chance to grab perpetual licenses, as Autodesk’s increasingly desperate emails keep reminding me. The only ones still available now are the expensive ones: suites. In the meantime, there is the ongoing (and increasing) cost of maintenance subscription and the introduction of higher-income-per-period desktop subscription (rentals). So if anything it would be reasonable to expect a large upwards blip in Autodesk’s income if the customer base was going along for the ride.
The fact that this blip hasn’t happened shows that the customer base has other ideas.
You’re right, Rentals don’t have a high upfront cost. However, my perpetual licenses (some of which I’ve had for 10-15 years) currently cost me just a yearly maintenance subscription. I don’t have a need to be so nimble with licensing as our staffing stays stable, if not growing slowly.
So, the measure for me comes down to “what does a perpetual rental cost me in the long term?” For the suite product that I use, the break even is just under 5 years at which the costs are roughly the same. At 10 years, the Rental has cost an extra 33% ($6800) above maintenance subscription; at 20 years it’s 73% ($22,800) above. That’s for a SINGLE license.
I currently have 40 seats and I am licensed at the pleasure of Autodesk. That license agreement gives Autodesk carte blanche to change their terms at any time. So, in couple of years, when Autodesk decides “meh…we’re still not making enough money” and forces my perpetuals to become rentals, how much money will I start losing?
The model is simple: Autodesk can’t really innovate any more so who would want to pay to upgrade to the newest version of whatever just because it’s got a shiny new GUI and dimensions can now do things they should have done 20 years ago? This is what happened with Adobe. Have you seen much innovation from Adobe recently? Nope, just a shiny new interface year after year for most of their products. I haven’t seen marked improvement in Civil3D for years. More importantly, the little things that matter, like say whole-hearted investment into to fully fleshing out components instead of half-arsing them, isn’t evident to me. For instance, how many releases did it take to get an almost complete pressure pipe catalog? Oh goody! PVC material on the 5th release!
Long ago I was picking a 3D CAD path. DOS or UNIX. $11K or $85K. What really made the decision was the annual running costs. Zero on DOS. UNIX software was going to allow me the privilege of paying “maintenance” fees with nearly every application. Maintenance might add new and improved functionality, maybe some terrific enhancements, possibly some bug fixes, and there might even be a real software update sometime – all that for just about $3.50 a day. Over a hundred US bucks a month for maybes. I asked about the credit that I’d receive for reporting bugs. Silly me.
So, it’s choice time again. Keep my existing perpetual licenses that will never see new service pack updates anyway, or pay until the end of days and never expect to see any real improvements – or until the [For Lease] sign goes up on McInnis Parkway. A coin toss has better odds. -Bill
Expected… Will take 3 years for rentals to show profit then out will grow
If Carl Bass was expecting to turn a profitable company into a loss-making one for 3 years I can’t remember him telling the market about that.
Out-growing could happen if Autodesk kept its customers and “persuaded” lots of them onto rental. If that happens, I’ll be very surprised.
Ahhh…. the marketing spin on all of this is simply ridiculous. The latest is “….greater value, more flexibility, and a simpler way to access the Autodesk software”.
It it proven to not be a greater value for many (the majority?) of customers (see Josh Crawford’s comment above).
Flexibility? Forcing rental only is the opposite of flexibility. Sure I may want to rent some licenses when I have a surge in work, but I may want to purchase perpetual licenses as my company grows. THAT is flexibility.
Simpler way to access? What IS that anyway? Simpler than what?
Having said all that, I still say we will be able to look back on this post in the year 2022 (my random date, 6 years from now) and not much will have changed. The vast majority of us will have adapted to the new rules of the game and will still be using the same Autodesk products we’ve been using for the past 10, 15, 20 years – regardless of how they are delivered, how the licensing works, or how much it costs.
I hope this blog post is still here then Steve, so that we can come back and see what happened.
Autodesk might benefit from watching what Allegorithmic did with Substance and Painter. That is, allow people to buy to own in installments and use the tools while paying for them each month. This move really accelerated the adoption rate of Substance tools by customers and has IMHO secured the future of Allegorithmic.
Good. I hope AD burns.
In 2005 I made the move to BricsCAD, never had to loose my sleep over Autodesk’s moods again since.
I have to say that I believe that was one of my best business decisions to date.
I pay a BricsCAD Platinum perpetual license for less than an annual AutoCAD rental, have the same functions and more, is like AutoCAD+BIM and maintenance runs $235 per year, my cost analysis says that I would have payed over 7 times per license to Autodesk for a similar product. No brainer