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The big Bricsys interview 4 – thank you, Autodesk

This is one of a series of posts covering an extensive interview with Bricsys CEO Erik De Keyser and COO Mark Van Den Bergh. In this post, we learn that Autodesk’s move to all-rental has helped drive BricsCAD sales higher and continues to do so.

Cyrena: Backing up just a step to sales, were you able to track any impact on your sales numbers with the chronology of Autodesk’s announcements of ending perpetual? Did you see an effect that you could map to that?

Erik/Mark (together): Yes.

Erik: We see that especially with large companies. I hear it from Mark always!

Mark: That’s what I wanted to explain this morning too, although we have an indirect sales channel, we have our resellers at work out there, especially with the large deals, we are involved always. So there’s always one of our guys, a business development manager together with the local sales person in touch with those larger corporations.

In the last few weeks, we have received tons of emails from large corporations; of course it’s hard to disclose them, but… [names a corporation]. It doesn’t mean they will switch right away, but we have meetings where they say that, “Our contract with Autodesk ends in July, August, whatever, that’s the time we will not extend it. We will not renew it, we will not go to subscription, and we are looking for alternatives.” These are really big, big, corporations. So yes, yes, we see an impact.

Erik: When it comes to alternatives, and with all respect to our colleagues [competitors], we are not the only alternative, but I think we are in a good position. If you see what we have to give people a perspective beyond AutoCAD, well…

If we would only be an AutoCAD clone, and AutoCAD stops further development, it would mean the clones stop further development more or less as well. And all of a sudden the market is going to 3D mechanical, 3D BIM, etc., then it’s a problem. I think that’s where we can play an important role.

The DWG market, the DWG community, if they really want to move on slowly, slowly (and everyone makes his own choices about staying on 2D AutoCAD-based, fine as well), but at least there is a growth path. And I see that BricsCAD is the only product that goes in that direction. All the other alternatives more or less stay around what Autodesk is presenting, with a few differences here and there.

But it’s not really mainstream that there is investment in R&D or really a big jump of other stuff than just being compatible with AutoCAD. It makes a difference.

This is the complete set of links to this interview series:

The big Bricsys interview 3 – looking after people

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This is one of a series of posts covering an extensive interview with Bricsys CEO Erik De Keyser and COO Mark Van Den Bergh. In this post, I learn about Bricsys’ astonishingly good staff retention record and the reasons behind it.

Autodesk likes to periodically pat itself on the back for being a great employer, but history shows it’s a company that discards about 10% of its workforce every few years to keep the share market happy. I suspect another round is coming up soon, unfortunately. There’s a stark contrast between a company that disposes of its chattels in that way and one with a CEO that says, “…every time somebody leaves the company that’s really, really bad.”

You as a customer may not think that matters to you, but it does. I believe there is a direct correlation between Autodesk losing knowledgeable staff and Autodesk repeating old mistakes and breaking things. If today’s developers don’t know why some things in the software are the way they are, or why most changes should automatically come with an off switch, or why some things shouldn’t be done at all, or even how a feature can be maintained (e.g. Visual LISP), then the product suffers. AutoCAD users have to deal with the consequences of those knowledge holes with every release.

As in so many other areas, Bricsys proves to Autodesk that it doesn’t have to be like that; there is a better way.

Steve: Speaking to your people, they appear to like working here and they stick around. What’s your staff turnover like?

Mark: It’s very low, very low.

Erik: Job-hoppers, you mean? People who leave? I think in the last fifteen years… maybe five, six, something like that?

Steve: Wow.

Mark: I remember the reasons, maybe two or three times here, maybe having to leave to move to another city or another country. There as well, we try to find solutions.

We really have a good team atmosphere and if those people can work, if they’re a developer for example, people can work from remote areas. We have a guy who has been working for us for years who is now working from Turkey. That was the discussion we had, “I have to leave because I’m moving to Turkey now.” No, you don’t have to leave, just work from there.

Erik: I will add that in Novosibirsk (Bricsys Russia) it’s more difficult to keep the people. We are growing very fast there. We started when we took over the LEDAS team with 3D modelling, we started there with six or seven people. We now have thirty. Along the road for the last four or five years, maybe five or six left. In percentage, that’s way more than we have here. We are stopping the bleeding now!

Steve: That’s still fairly low!

Erik: That’s still fairly low but every time somebody leaves the company that’s really, really bad. We are investing a lot in making it comfortable for our people. To give you an idea we have a culture here of every Friday, we go to the pizzeria for lunch here. We have our own floor there in the restaurant every Friday. Sometimes we talk about software but sometimes we talk about politics and sometimes just rubbish and nonsense and a lot of fun.

Mark: Mostly!

Erik: But we give a budget to all our teams. In Novosibirsk they do that as well. So they have a budget and we force, well, encourage them very strongly to do that.

Mark: Same in Singapore, [inaudible], all our teams.

Erik: Every year, with all the families, we go to a chateau near Paris for three to four days. In Novosibirsk they have a budget to go for a trip with their families once a year, if there is a special occasion. That’s investing in your people.

If anyone has a problem, everyone knows that all doors are open, that we will try to find a solution to make you comfortable. We always say to our people here that the last thing we want is if they are stressed. It doesn’t work for developers and for a company like ours. No stress.

I was really sorry with Dieter yesterday [one of the presenters at the press event]. They only told him the day before to give a presentation! He’s not used to doing that. He was really good about it as you all saw, but he was really stressed. We will avoid putting him in that situation ever, ever again. It doesn’t work.

But for the rest, even with deadlines, we change priorities then, but we don’t want people stressed. And that has a very good result. If you see where we are coming from, what we have, in fifteen years, millions and millions of lines of code, of testing code as well, it’s a ton of development that is done, quality that we have developed. So far, so good, without stressing our guys. Why would we change that?

Mark: Also, the transparency we show to the outside world with the bug reports and so on, that’s also done internally. Everything here is open. On a quarterly basis we get everyone together, we show the numbers, it’s no secret at all internally. So everyone knows how the company is going, how things are moving, new projects that we are doing, and that feels nice with people.

This is the complete set of links to this interview series:

The big Bricsys interview 2 – making money

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This is one of a series of posts covering an extensive interview with Bricsys CEO Erik De Keyser and COO Mark Van Den Bergh. In this post, I ask about Bricsys’ profitability and growth.

Steve: Do you publish your numbers?

Erik: No we don’t. We are a private company.

Steve: Can you give us an indication of what’s happening with your sales at the moment?

Erik: Last year we grew in revenue 25%. First quarter this year was up 27% over the same quarter last year. If you compare the sales in total of 2016 compared with 2015, it was 25% in growth. It means that the growth is going faster and faster and faster. That’s what we expect normally as well.

This is without any sales to Intergraph. We expect that the Intergraph deal will have an impact on our growth for sure. Mark as COO is responsible for sales and managing of that network. [To Mark] And I see you’re very occupied!

Mark: That whole Intergraph network is coming to us. It’s huge.

Erik: It’s more than doubling what we have, on sales partners.

Mark: Just to add to the numbers, we are very profitable: 24, 25%. We have very good profitability which is also significant. We’re not burning money.

Erik: Year after year.

Steve: So you’re making money every year and that’s increasing every year?

Erik: Yeah, yeah, absolutely. The percentage is always around 24-25% but as we’re increasing revenue it becomes exponential.

Mark: We started in 2002 and I think we have always been profitable.

Erik: I think the first two years are what we call a black zero. We have started with an investor, but we have always kept a majority within the company. I won’t give the total shareholders but you must know that most of the people here, if somebody works here two years they get stock options and becomes a shareholder. The goal is we always keep the majority with the employees and the management.

We have a good partner investor. He’s satisfied with the growth, of course. There’s no big deal.

This is the complete set of links to this interview series:

The big Bricsys interview 1 – why invite the press?

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This is the first in a series of posts covering an extensive interview with Bricsys CEO Erik De Keyser and COO Mark Van Den Bergh.

On April 26 and 27, I attended Bricsys Insights, a press event in Ghent, Belgium. Other attendees included Cyrena Respini-Irwin (Cadalyst editor in chief), R.K. McSwain (CAD Panacea), Ralph Grabowski (upFront.eZine), Randall Newton (GraphicSpeak), Roopinder Tara (Engineering.com), Martyn Day (DEVELOP3D), Jeff Rowe (AEC Café), Anthony Frausto-Robledo (Architosh) and Paul Wilkinson (pwcom).

Although Bricsys has invited some of these people (including myself) to previous events, this was the first gathering of such a significant number of illustrious industry press, bloggers and observers. So when myself, Cyrena Respini-Irwin and R.K. McSwain had the opportunity to interview Bricsys CEO Erik De Keyser and COO Mark Van Den Bergh, the first thing that we asked was this:

Cyrena (clarifying earlier question): What was the change that led you to bring in more people for the press event?

Steve: Why are we here?

Erik/Mark: (Laughs)

Cyrena: That’s a big question!

Erik: If you look to the history of what we have done and it goes together with what we said in the beginning, that we chose to grow by organic growth, and for a long time we didn’t do any marketing, and especially for the American market, because if you do it too early… And really, if we had done that massively, five years ago we would have been categorized as just another clone of AutoCAD. Once you have that, it’s very difficult to leave that, and that’s exactly what we wanted to avoid.

And so we waited until we had really substantially different product technologies that add a lot of stuff to… if you compare it to AutoCAD, I think that’s the moment where we are now. And we decided from that moment on, probably it made sense that we tell it a little bit more to the world. And of course what do you do then? You invite influencers in the market, which is the journalists. That’s the reason we invited you all.

We’re going to repeat this more and more.

Mark: Just to add to that, just sitting here for just two days with you guys also helps us to really talk about everything. If you go to a conference (you [Steve] were also in Munich), the time is limited and so we don’t show the systems behind, the testing system, we cannot show everything.

The idea here was, OK, these are the things we’re doing, what you see of course but also what is behind, the people behind the DNA of the company. We thought that’s a good idea to do that in depth with an audience like you guys.

Erik: That’s an important element as well that we wanted to show: the DNA of the company. It’s a bit different from others. That’s who we are and it’s important to know.

Steve: You’re about 90% developers, programmers. Do you think that’s going to change as you put more effort into marketing?

Erik: I think that the awesome part of the company that has to be improved, and on the marketing side we’re going to need to improve… to give you a rough idea we think that over the next two, four years we’re probably going to grow to maybe 200-250 people.

Steve: So where are you now?

Erik: We’re at 130-140. We just hired six new developers here in the office last week so we have to recount where we are in total. Dmitri is hiring in Novosibirsk (Bricsys Russia) as well.

So for sure we are starting what I would call a second life now. There’s been a lot of development, but still the majority of people in our company will be developers. I think we’re always going to stay around 80% developers. But there’s a part of the business, and especially in the marketing, that we will have to improve.

What we have encountered now, with the new modelling techniques we have introduced for BIM, we have to teach all the resellers. We have to produce material to teach the people how to work with it. These are not developers we’re going to need. We’re going to need seasoned architects that have experience for the last six to ten years with BIM already, maybe with competitive products. But that understand the concept, have experience with it, those guys we are now attracting and we’re going to need. Those are not developers, but in that sphere we have to extend and we have to grow. And that’s what we’re doing. We are hiring.

The focus will always be… what we’re good at, is basic research and development. That’s really what we’re doing, that’s the focus, and the results are the products we make.

We have a good partnership network I think, we’re going to continue to feed that, so I expect that balance between developers and non-developers to remain always above or about 80%.

If you have a look at the system, how we sell and support our products, we are scalable, to maintain that balance of a high level of developers. There’s no need for us to change that model. But in certain aspects we’re going to have to extend.

BOA (Bricsys Online Administration) is helping us tremendously to be scalable. If we were to double our revenue we wouldn’t need that many more people to manage that. We are constantly investing in automating all the systems we have, and it pays off big-time.

Cyrena: So that very heavy R&D investment you’ve sustained thus far will be scaled back a little in order to invest in other areas such as marketing?

Erik: Yeah, but it doesn’t mean we will scale back from development. We will grow in development as well, but the balance will be a little bit different; the proportion is different. We will grow tremendously, even more still in R&D when it comes to number of developers than in any other area over any other field or kind of employee that we have.

This is the complete set of links to this interview series:

Disclosure: Bricsys covered travel and accommodation expenses and provided some meals. Oh, and beer. Mustn’t forget the Belgian beer.

Carl cashing in his chips

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Here’s an interesting Carl Bass exit interview with Roopinder Tara at engineering.com. If you’re wondering just how much stock Carl offloaded in those planned sales, here are his reported sales of Autodesk stock in the weeks leading up to the resignation:

11 Jan 2017 $7,894,150
9 Jan 2017 $7,888,768
5 Jan 2017 $7,694,038
23 Dec 2016 $1,971,715
22 Dec 2016 $1,968,935

That’s $27m, give or take. Carl’s reported as having sold over $49m of Autodesk stock over the last three years.

While Carl still has tens of millions of Autodesk stock, dumping that much of it before leaving doesn’t strike me as the actions of someone as supremely confident in the future of Autodesk’s ailing cloud push and rent-or-go-away business model as his words would suggest.

Autodesk Cloud interview May 2010 – Part 3

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Steve: Another issue I have with Cloud-based environments is the lack of customisation. One of the things that makes AutoCAD so efficient for people is that they can get it exactly the way they want it. With a browser-based environment, we’re pretty much stuck with what you guys decide to give us. Can you see any solution to that in the longer term?

Tal: From a pure technical point of view, there’s not a lot of difference in terms of the way you can customise an application on the desktop versus customising it on the web. I think AutoCAD, having a very mature application has a lot of functionality which has built up over the years to provide customisation capabilities to the nth degree. So I think it has less to do with the platform of your choice and more to do with the maturity of the solution and how much customisation the people who designed the product wanted to put in there.

Steve: I guess you have the issue of where does that customisation live? Does it live on the PC or on the Cloud?

Tal: A good thing about moving it to the Cloud would be that if you moved to another computer, the app would still be customised to your needs.

Guri: I was going to say the same. It’s actually an advantage to store it in the Cloud because regardless of where you are accessing it from, you can still have your customisation go with you wherever you go.

To address your previous question about customisation, I think it’s a pretty relevant request to be able customise this application. But at the same time, remember who is the target audience for that. If you are an AutoCAD user, we assume you have AutoCAD with all the advantages that come along, but if you are not an AutoCAD user, you are somebody downstream that just wants to look at a document and collaborate on it, then you’re probably less sophisticated from that perspective and you will probably require have less customisation needs. Nevertheless, I do believe that the request to add customisation to this product is completely relevant.

Steve: As well as user customisation, there are third party developers wanting to be able to add their own value to the product. Do you see that being available in the longer term, that you will provide an API for third party developers, whether they are commercial developers or in-house developers for large organisations to do their thing with it?

Guri: We are considering it.

Steve: That’s tricky, isn’t it? It’s more difficult than if you have a desktop environment. How do people provide their add-ons to customers, or to their internal users?

Tal: I’m not sure. If you look at the major web platforms of today, look at the social ones such as Facebook, third party integration, customisation of that, that can be taken to the nth degree. I think a lot of the time, for organisations to deploy customisation on the web where you don’t even have to go to the PC and configure a customisation for a user, for that to be available centrally on-line, and to know that when you move to a different computer for example, all those extensions and all that configuration, all that good stuff, goes along with you, it’s actually an advantage. You can do a lot of the things around customisation and configuration of the product on line, that would be harder to do sometimes on a desktop.

Steve: There are a limited number of DWG object types that are currently supported. I assume you’ll be adding to them over time. What about 3D objects?

Tal: Butterfly supports all AutoCAD 2D objects that are supported by horizontal or vanilla AutoCAD at this time, so you can view that, and you can have drawings from vertical versions with proxy graphics that will be displayed. So for 2D I think you have probably full and complete support for 2D data types. Before we move on to 3D, we want to make sure we nail the experience just right. You say you have a list of things you’d like to see us improve in 2D, and we’d like to be able to go and work on as many of our users’ lists for 2D before we head on over to 3D, because at the end of the day it’s all about nailing the experience just right rather than just adding a lot of the functionality to the product which is not fully mature and fully complete, and as a result of that, not add value to our customers.

Steve: I guess people may be concerned with losing data because you’re not supporting the full set of object types. Is round-tripping fully supported?

Tal: I can rest your mind at ease on that point. When you upload an AutoCAD drawing to Butterfly, that file is not converted, and resides in fully original form on the server. And when you make changes, for example on line, those changes are then injected into the drawing using authentic genuine DWG technology, so when you download that file back to your computer, you maintain full integrity of it. There’s no conversion process, no data loss, and you get a very strong experience on that front. So users should not have any concerns at all concerning that.

Steve: So round-tripping works with everything; is that true? For example, you may have a Civil 3D DWG that you modify using Butterfly. Does the drawing return fully intact, including the Civil 3D objects with all their intelligence?

Tal: That Civil 3D object is intact in the same way that if you take that Civil 3D drawing, and open it in AutoCAD LT and manipulate geometry. All your Civil 3D objects remain intact. It’s the exact same experience. That data is not modified, it’s not converted, it’s not lost. While Butterfly may not be able to edit the contents of those Civil 3D objects in the same way that AutoCAD LT or AutoCAD vanilla does not enable you to, it still maintains full data integrity and there is no data loss.

This post concludes this interview series. Links to part 1 and part 2.

Autodesk Cloud interview May 2010 – Part 2

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Steve: Autodesk is currently giving away these Cloud-based services, Butterfly for example. Presumably you’re not going to keep doing that for ever. Are you going to start charging for these services eventually?

Guri: Again, you’re pushing us to talk about future. Currently, for as long as this is in a Labs environment, we’re encouraging users to use it and we’re giving it free in the Labs environment and we’re not putting any limits on it during the Labs experiment. Once we make it a commercial product we may change that.

Steve: I put a poll on my blog asking readers what they thought about CAD on the Cloud, and most of them are either concerned or frightened. Solidworks users are in revolt about what they see as being forced onto the Cloud. Why do you think there is this fear or apprehension of CAD on the Cloud?

Guri: I’m not sure. I’m curious myself about this type of reaction. Maybe it’s fear of the unknown, it’s a new environment, maybe there is some fear about security of documents while they are in the Cloud, it’s just “it’s a new thing”. We believe the approaches we are taking in providing a complementary product to the desktop environment which takes advantage of the latest and greatest web technology and enables those advantages to the user actually will make them feel more at ease. We’re not changing their normal CAD tools, we’re adding to them by enhancing them to take advantage of the capability of infinite storage and infinite CPU that the Cloud brings to them. So in a way, it’s a mixed environment. It’s probably easier to think about moving from desktop only to a mix of desktop and Cloud rather than a step-function where you move entirely to the Cloud.

Tal: Yeah, and when moving to a new platform, you probably know, even when moving to PCs say 10 or 15 years ago, there was a lot of apprehension and whenever you move to a new platform (and rightly so), you’re going to see a lot of concerns being raised by users and it’s our responsibility to provide our users with a very gradual and easy migration path which enables them to pick which components, which things, which processes they would like to do on the desktop and which make more sense to be able to do on the web.

Guri: Steve, you’ve been around CAD for many, many years. You know that CAD users usually worry about a few things. They worry about their documents and drawings. They have a lot of investment in archives of documents and drawings, they want to know that whatever changes happen in the future in the world, will enable them to keep using those drawings as usual. The other thing they worry about is their own training and experience, the way they work every day. They have a lot of habits and practices that they develop over the years and they want to know that they don’t have to retrain themselves or any other new users into new ways of doing things. And what we’re proposing is addressing both. You can use your drawings, this is still DWG, these are still AutoCAD documents, you don’t have to change, every drawing that you have that is created now or 10 years ago is still going to be useful.

So that’s one comment and the other is you can still use AutoCAD; that’s your tool of choice and whatever you do in the Cloud we purposely keep very simple so learning it and training it is really a very, very simple task.

Steve: I think you raised a valid point there about people being afraid of “what’s going to happen to my drawings”; people are concerned that if they move completely to the Cloud then they’re handing over control; they no longer have control of their documents. Do you think that’s a valid concern?

Guri: Well, I think that’s a concern, and people who have it will probably have it for a long time. What we want to do is let them choose how to deal with that. So we are not forcing anything here; we’re letting them keep their drawings on the desktop if they want, we’re letting them upload to the Cloud if they want to take advantage of it, so it’s entirely up to the user what to do. What we’re trying to do is show them that if they want to move to the Cloud, the advantages are the same advantages as photography sites such as Picasa. If you upload your family photos to the Cloud, somebody has done the backup for you; somebody has put security on it that is probably even better than you can do yourself, you can share it easily with others, provide access to your family without sending attachments and stuff like that. So there is a lot of advantages. We’re telling users it’s completely up to you; there are advantages that come along with moving stuff to the Cloud, if you’re not confident with that, that’s perfectly fine, stay on the desktop. So we’re letting the user do it at their own pace.

Steve: Can I share some of my experiences with using Butterfly? Perhaps I was using it wrong; I was trying to draw with it! As you’ve indicated, that’s maybe not what it’s really there for. I found that it wouldn’t open some drawings that I tried to upload. The display was a bit fuzzy, particularly on text, particularly when it was selected. A big issue I have with it is that I have two great big screens here in front of me and because Butterfly is confined to a browser window, it’s only using one rectangle. With AutoCAD, I can grab various bits and pieces of the interface and drag them over to the second screen, so I find Butterfly rather limiting. There also seems to be a lot of wasted space in the Butterfly environment. I can get AutoCAD to use about 91% of the screen space for drawing area; with Butterfly it was about 53%. So you’re working in a tiny little window. People pay lots of money for these big screens, and because you’re working within a browser, and because within that there’s a lot of wasted space, a lot of that investment is wasted. I’ll stop there before I confuse you all, but I have a great big list here of stuff that I found difficult to live with.

Tal: I’d love to have that list. We get a lot of requests from users, and a lot of different things bother different people. You know, we get a lot of requests that are the complete opposite, like I have a laptop with a small screen so I want to be able to optimise, I use Butterfly on the go, I need to have Butterfly optimised for that kind of resolution. But if you have a list of things we’d actually love to see it, and a lot of the times when you’re connected to a product designer on our team and have you talk to him and really go through the things that bother you, because at the end of the day it’s really our job to be able to do a good job and provide the tools which a user loves and delights users, and be able to focus on the things that are important to the majority of users and really do a good job of nailing those experiences. So if you have a list we’d love to have it and engage with you on it and see what makes sense for us to put in there and what we feel is not the highest priority for us feature-wise right now.

Steve: I’m sure you’re working on printing/plotting, because it’s pretty terrible at the moment. I’m sure I don’t need to tell you that’s a priority.

Tal: Basically it does not plot right now. It enables you to print your screen, but not plot. I wouldn’t say it’s bad plotting, it does not plot right now. If you want a quick printout of whatever you have on screen, it will do the job. Plotting is one feature that is definitely very interesting to us, it’s important to a lot of users, and we’re definitely looking into it, and providing hopefully in the future a better experience revolving around that.

Steve: And the limitation of selecting more than 30 objects; is that going to go away at some stage?

Tal: I believe you’re going to be seeing a lot of improvements in that area relatively shortly.

Links to part 1 and part 3.

Autodesk Cloud interview May 2010 – Part 1

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On 26 May 2010, I had the opportunity to ask Autodesk some questions about the Cloud in general and what was then Project Butterfly (now AutoCAD WS) in particular. The Autodesk people were:

Guri Stark,Vice President, AutoCAD & Platform Products
Tal Weiss, R&D Center Manager (Israel)
Noah Cole, Corporate Media Relations

The interview was conducted by phone conference with no prior notice of the questions. Here is the first part of the interview, which I will be posting in three sections.

Steve: Guri, are you responsible for all of Autodesk’s Cloud-based offerings?

Guri: Tal and I are responsible for Butterfly, that’s the only Cloud-based offering that we are responsible for.

Noah: Steve, you can put the cloud-based offerings into three categories, those that are related to current products and therefore come out of the same organisations and divisions that those products come out of. So Butterfly which is related to AutoCAD so it’s coming out of the AutoCAD group. Similarly what you’d see happening with manufacturing and those projects. You also have the more emerging Cloud solutions like Dragonfly was (that’s now Homestyler) that’s coming out of Labs. So you see projects coming out of either the divisions if it’s related to product or the Labs group if it’s more forward-looking.

Steve: Can you give me a one-sentence summary of each of the Cloud-based offerings and what market it’s intended to fill?

Guri: Butterfly is one we’ll talk about in more detail in a minute. One we just launched as a product is Autodesk Homestyler (previously Project Dragonfly). It’s a SaaS-based offering done completely in a browser, targeting the home improvement market. It’s free to the end user so users who want to redecorate or remodel their kitchen or their living room can access this product, do a layout, place in it different types of furniture from libraries, and see how physical spaces fit together in this 2D and 3D type of product which is a completely SaaS-based offering.

The end user for this is not traditionally an engineer or CAD user at all, it’s more like the person at home; a typical user would be a 35-year-old lady who is interested in home decoration. The libraries in the product are either generic libraries or branded vendor-provided libraries from a variety of vendors in this space. That’s another type of product using SaaS technology that enabled us to get into a market that we’re currently not in.

There are other projects going on under the umbrella of taking existing products and trying to run them in a Cloud environment, and measuring the performance that they give us. All of them are experimental; some of them are on Labs already with some limitations of distance. So if you are in the California area you can try and use, mostly for trial and evaluation, some of our products such as AutoCAD or Inventor even, in this type of environment. You don’t need to install anything because the application runs in the Cloud; you have full access to the full application for a trial perspective.So there are different approaches to the Cloud. One approach is starting from scratch, developing something like Butterfly or Homestyler from scratch in the cloud to try and target a new market possibly. Another attempt is to take an existing application and try and run them centrally in the Cloud and see whatever performance it gets. Currently our intent is to use it for product evaluation.

Steve: The existing products running in the Cloud in the geographically restricted trial, is it just AutoCAD and Inventor?

Noah: AutoCAD, Inventor and Maya are the only ones currently running. There are also two recent technology previews happening in Manufacturing for Centaur and Cumulus which are different, but that involves Inventor and Moldflow.

Steve: With my experience with Project Butterfly, I agree that as a collaboration and review and viewing/markup tool it’s excellent, but it seems to me that it’s also being promoted as a drafting tool; that people will actually draw with it. It doesn’t seem so strong to me, for that. What is Project Butterfly now, and what is it going to end up being?

Guri: Steve, we’re not promoting this as a drafting tool, we say that the real authoring tool to create drawings is AutoCAD on the desktop. This enables you to upload a drawing that was created using AutoCAD to the Cloud, and in addition to review it and annotate it and share it; you can also make changes to it, to edit it. So what we’re providing in Butterfly is editing tools, not really drawing creation tools. I can tell you we have a free product called Autodesk Design Review, this product has only viewing and annotation capabilities. What a lot of users there are asking for is some basic editing tools where they want to make some local changes, and that’s what we are providing. The editing tools are intended for users that are not necessarily AutoCAD users, we keep them simple for that purpose.

Steve: So it’s not intended to be a drafting tool and you never intend it to actually become one in the end; is that correct?

Guri: I’d rather not comment on future direction. I can tell you right now that the positioning of the product is as a web accompaniment to AutoCAD, in a way similar to Microsoft’s Office Online in the most recent Office application is doing, in which an author on the desktop using Microsoft Word can upload it to the Cloud, view it, share it, edit it. So we are enabling editing of documents in the Cloud.

Tal: Just to add to that, we have different platforms, the desktop and the web. Each platform does certain things very well. So authoring, for example, on the desktop is something that is great, it’s mature and you can do a lot of amazing stuff there. What we want to focus on in building a tool for the web is leverage what the web can do for our users. Stuff like being able to access from anywhere, design timeline, collaboration, sharing; really hitting all those sweet spots instead of trying to imitate what’s already up there on the desktop and is working well. That’s why you see the different focus on the different platforms trying to do that thing it can do best.

Links to part 2 and part 3.

Cloud benefits – collaboration, with Autodesk’s Tal Weiss

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In May 2010 I took part in a phone conference with several Autodesk people about the Cloud. Part of that discussion was in the form of an interview, which I will publish in later posts. Another part was in the form of a verbal presentation from Autodesk’s Tal Weiss, concentrating on what was then Project Butterfly, Autodesk’s then Labs-based Cloudy CAD offering. This product had been called Visual Tao and was later renamed again to AutoCAD WS. As this presentation was largely based on the benefits of the Cloud for CAD collaboration, I think it is worthwhile reproducing it here. Obviously, it represents Tal’s view rather than my own.

First, a little background. Project Butterfly started with an Autodesk acquisition in November 2009 of a company called Visual Tao, based in Tel Aviv, Israel. This is now an Autodesk development office led by Tal Weiss, former CEO and co-founder of Visual Tao. Here is what Tal had to say:

Butterfly is a web application to enable users to edit, share and collaborate on AutoCAD drawings, on line using any web browser. One way to describe it in just a single sentence is, “Google Docs to AutoCAD”, meaning a web application to which you can upload your desktop content to then be immediately able to view and to edit that content using just your web browser with no desktop software necessary, and to share that content very easily with other users without them having to have any kind of software to download and install on the local machine.

The way that we look at it is that Butterfly extends AutoCAD to the web, meaning turning AutoCAD from a best-in-breed software experience for drawing, drafting and modelling on the desktop and extending that over to the web; putting the power of the web at the hands of our AutoCAD and even non-AutoCAD users. That kind of signature was the reasoning behind doing that acquisition [of Visual Tao]; really creating a strong web component from AutoCAD, really enjoying the synergy that both companies could have by incorporating that hopefully in the future to one coherent offering.

The main capability of Butterfly: to allow users to be able to upload content and to be able to edit it on-line. Butterfly today offers a fairly rich set of functionality in terms of what you can do, and we’re constantly adding more tools and capabilities. When we designed this interface, we wanted to make it on the one hand familiar to our existing AutoCAD users, but on the other hand familiar to people who are not AutoCAD users. We’ve seen really good success with that; people are very easily able to upload content and immediately be able to interact with it and manipulate it, edit and comment on content using just a web browser. So that’s probably first of all the one key feature.

Another thing Butterfly needs to do is to allow you to very easily manage and browse through your on-line content. You upload drawings and Butterfly allows you to manage folders in a structure, and to move files around and navigate through your content very easily and to search for your content. We’re making it dead simple for you to manage your AutoCAD drawings on line.

Once the content is on line, it becomes very easy to share that content with other users. With one click, you can take a drawing, or a group of drawings, or an entire folder, and share it with another user. You give them access in a way that is very familiar with Google Docs. You’re not sending them emails with file attachments that they then have to download to the local computers and they need to have the right software for them to be able to open it. What you’re giving them is a link which you can send via email or even post on the Internet, and once they click it those users are able to open that drawing in a web browser and to be able to view and edit it with very good fidelity without having to have any sort of software or files stored on their machines.

There are also a couple of cool things you can do here when you share content, we give you a lot of control over the way you share it. You might want to share your content with someone but without allowing them to edit it. If you’re sending content out to a client you might want them to be able to review the drawings and just do simple markups over them. Or you might not want the user you’re sharing the content with to be able to download it to their machine.

You can do all of that very, very easily. Because you’re sharing the same content with multiple people, you’re not duplicating it in the way you would if you were to send drawings via email, where every time you send out an attachment you’re creating a duplicate where it’s very hard for you to manage which version of the content your consumers are using, especially down the line. This method of sharing on line using just one centralised copy on the web provides you with the ability to have one single point of view for all your design consumers to be able to view, edit and interact with that content. So that’s another exciting feature that you get by using Butterfly for managing and sharing your drawings on line.

Another nice thing about security is that you can actually unshared content. So if today you’re sending out files to users you’re never really able to reclaim that content back; once you’ve sent it out you’ve basically lost control of it. People can do whatever they want with your design and you’re not able to control it. What you can do here [with Butterfly], you have a lot of control over the content because you’re not actually giving them a copy of it, just giving them access to it. You can at any point in time remove access to that content or revoke permission to download and edit once a specific phase of the design process, just leaving up there the content for others for documentation. So there’s a lot of things you can do with the web which are very hard to do when using a file or email-based approach.

One of the things we set out to do when we built this product was provide very strong collaborative capabilities. We’ve seen these for asynchronous collaboration where it’s dead simple for me to just share a file with somebody, give them a link to that drawing and permit them to view and edit it. We also wanted to bake into the system a strong real-time component, especially with the web becoming more and more real-time, and we did it. So it’s very easy for users who are using Butterfly to go into meeting mode with another person, in which they can really laser [focus] in and work on specific components and work and exchange ideas and communicate over design very easily. We provide them with a lot of tools to do so, such as synchronised viewports, shared cursors, enabling users to really co-edit and view drawings together at the same time. So you can have changes propagated between two users as they happen.

For example, if I’m an architect and I want to walk a client through a design, I can just send him out a link to click, and he’s in the drawing with me, we can discuss the drawing together, I can show him various alternatives, things I’d like to do and I can actually control what that other user can do with the drawing. It might make sense for me to only provide that user with viewing and mark-up capabilities and just walk him through that design. Or if I’m working with an environment engineer working on the West coast and another engineer on the East coast and I want them to exchange ideas on the specifics of design we might want both of them to be able to move, edit and manipulate drawings together, and this enables our customers to not only collaborate asynchronously, but also in real time without having to set up any sort of dedicated web conferencing solution, which as we see a lot of the time is hard to set up and get it to work, and those tools which are not really design-dedicated.

So we really want to build a design-dedicated tool for enabling real-time collaboration between users over designs. That’s another key feature that the system today provides users with.

When we set out with Visual Tao and later on Butterfly, we really wanted to build a system that was open and mashable from the ground up. We architected the system and we built it that way, and we launched that on Autodesk Labs. We wanted to be able to test the feature aspect of the system with our users with something that’s meaningful and not just an exercise in technology.

One of the things that’s good about having a project out in Labs is that you get a lot of input and a lot of feedback from the community; a lot of engagement. We’ll be passing the 100,000 visitor mark this month* and we’ve received hundreds and hundreds of emails from users who talk about different things we’re doing with the app, features that are missing. We’ll actually be seeing probably over 27,000 AutoCAD files and drawings already uploaded to Butterfly* by our users. One of the prime requests we have is they wanted the ability to view and share, to collaborate on their drawings in a real-world context.

That’s something we really took to heart and that might mean overlaying your drawing over imagery, or aerial image, or it might mean positioning your content over a third-party service such as Google Maps. So we decided we were going to do that and build that feature out for our users and we provided support for over 30 popular image formats for people to overlay on their designs, and on the other hand we connected our system to Google maps, enabling users to position their drawing over a map and view and edit it in that real-world context in order to be able to share that with other users. We put it out on Labs and we immediately saw a lot of activity revolving around that feature. For probably the first 3 or 4 weeks after putting it out we have seen over 1,000 drawings overlaid over Google Maps and it’s very satisfying for us to be able to get requests from users regarding features that they like and being able to work on that very quickly and put it in their hands and see them using it and see them deriving value out of that.

I think probably over the course of the four months since the service has been up, we’ve actually updated it six times. Each time adding more features, more functionality, all based on user and community requests. That’s something that is very satisfying for us, to be able to get that feedback from the community and to be able to deliver on that.

A strong feature that the web provides is the ability to provide our users with infinite storage space. Whenever you upload a new file version to Butterfly, whenever you send out a drawing to review, whenever you meet on a drawing and co-edit it with a colleague or review it, Butterfly stores all that information and automatically places it on a design line, enabling you with just a couple of clicks to immediately go back to a previous versions, reviews, meetings, without having to archive or manage all that data yourself.

So if you’re working on a design and you need to incorporate some changes based on comments you got from a design review which happened 3 or 4 weeks ago, there’s no need for you to go back to an email or a file to look for those spots, you can with just one click go back to Butterfly and see all the changes and comments that were made during that meeting or review session automatically, and not only view it but download it to your machine, take it back to AutoCAD and work on the file some more, then re-upload it and have that design timeline automatically updated and all of the users sharing that file automatically getting access to the latest version. That’s another strong and interesting feature that Butterfly provides our users with today and which we’ve seen a lot of excitement about.

* Remember, this was back in May 2010, about 4 months after Autodesk Labs launched Project Butterfly.

Not answering the question

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Here in Australia, we’re in election mode, so I have even more reasons to avoid watching TV. On those occasions when I do watch it, I am often annoyed by what I see. This is not a novel observation, but one of the things that annoys me about many politicians is their habit of sidestepping questions when interviewed. It also annoys me when interviewers fail to follow up these non-answers and let them slide. Depending on the circumstances (e.g. limited timeframe, more important questions to ask, etc.), there may be valid reasons for journalists failing to chase after legitimate answers in a live interview situation. But I would much prefer to see a non-answering interviewee tied down and not allowed to wriggle free. Squirm, baby, squirm!

For on-line journalists and bloggers, there are few excuses for letting non-answers go unchallenged. There is virtually unlimited time, opportunity and column space in which things can be chased down. With that in mind, this post is an analysis of the response Callan Carpenter gave to the four specific questions I raised, and three points of dispute raised by others and passed on by me for a response. I have marked each response (or non-response) out of 10.

Questions

Please clarify in as much detail as possible exactly how you arrive at your figures.

Answer: none given. 0/10

A percentage is derived by dividing one number by another; what exactly are you dividing by what to come up with 1.5%?

Answer: none given. 0/10

Please explain why your statements appear to contradict Autodesk’s own published figures.

Answer: Callan explained that he did not intend to suggest what it seemed he was implying, but didn’t clearly explain exactly what it was that he actually was suggesting. 5/10

How large is Autodesk’s total installed base?

Answer: none given. 0/10

Points of dispute

Because Autodesk made Subscription cheaper than upgrading, it is no surprise that upgrading became less popular. This doesn’t indicate that customers prefer doing business in that way, merely that Autodesk made it the cheapest alternative.

Response: this statement was pretty much repeated back as if it were an answer: “the majority of customers buying over the past few years have opted to leverage the Subscription program…the most cost effective way possible”. 1/10

If the idea of Subscription is such an attractive proposition, why do you need to sweeten the deal with tools that you don’t allow upgraders to have?

Response: this statement was also pretty much repeated back as if it were an answer: “…there is much more to the program than cost savings…just some of the value-added aspects of the program”. 1/10

Your assertion that the 12-month cycle is driven by the product teams is incorrect. It was chosen for business reasons and the product cycle was forced to fit the Subscription model.

Response: none given. 0/10

Overall “answering the question” mark: 7/70 or 10%.

Callan, thanks for taking some time out of your busy schedule to provide some kind of a response. If you want to have another bite at the cherry and actually answer what you’ve been asked this time, you are welcome to do so. You know where to find me.

Readers, am I being too harsh here?

Autodesk’s Callan Carpenter responds to Subscription follow-up

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You may remember a month ago I raised the question What proportion of Autodesk customers really are on Subscription? Shortly after that, I sent Autodesk Subscription VP Callan Carpenter these questions following up on the interview:

I have a request for follow-up information arising from this interview. I hope you can find the time to provide some answers.

Preamble: Several people have called into doubt your assertion that the simplified upgrade policy affects only a tiny minority of your customers (you seemed to imply a figure of around 3% non-Subscription customers, with 1.5% who upgrade within a year or two). My own calculations based on Autodesk’s latest published financial results indicate that of upgrades represent 21% of the combined income from Subscription and upgrades, which is 7 times greater than the impression you gave in your answer. Please see this post for more discussion.

Questions:

Please clarify in as much detail as possible exactly how you arrive at your figures.

A percentage is derived by dividing one number by another; what exactly are you dividing by what to come up with 1.5%?

Please explain why your statements appear to contradict Autodesk’s own published figures.

How large is Autodesk’s total installed base?

Other points of dispute have been raised by various commenters, which I have paraphrased here. I invite your response.

Because Autodesk made Subscription cheaper than upgrading, it is no surprise that upgrading became less popular. This doesn’t indicate that customers prefer doing business in that way, merely that Autodesk made it the cheapest alternative.

If the idea of Subscription is such an attractive proposition, why do you need to sweeten the deal with tools that you don’t allow upgraders to have?

Your assertion that the 12-month cycle is driven by the product teams is incorrect. It was chosen for business reasons and the product cycle was forced to fit the Subscription model.

After a few follow-ups, I received a response yesterday. I reproduce that response here verbatim and without comment:

My sincere apologies for the delay. I have been travelling quite extensively, and this response has been sitting in my drafts email folder, and I just kept getting sidetracked with customer matters.

Nonetheless, I appreciate the opportunity to respond to some of the feedback you received after our discussion last month. During that first interview we discussed, among other things, the rationale behind the Simplified Upgrade Pricing program. I argued that SUP impacts only a small subset of our customers, and quoted figures to support the case. It appears those figures have been challenged by a few of your readers who feel their experience is different. Is it possible that both points of view are right? I believe it is.

By my prior statements I do not mean to suggest that the vast majority of all customers are on Subscription. Autodesk has a very large base of customers that has grown over the past 28 years. The subscription program as it exists today is only about 8 years old, so we had 20 years to develop a large base of customers, many of whom are not on Subscription. (Yes, there were forerunner programs like VIP, but they were structured quite differently and never generated an appreciable amount of business.) This is important because the SUP program only really impacts those customers upgrading from one and two versions back, which is a very small percentage of the already small upgrade revenue. Subscribers and customers upgrading from four or more versions back see no change to their pricing, and customers upgrading from 3 versions back see either no change or a very nominal one (up or down) depending on their specific product or country.

Most of the non-subscribing customer base does not purchase upgrades one or two versions back. In other words, most of these customers either haven’t bought anything from us in a long time, or when they do, they fall into the 98.5% of the revenue that includes upgrades from three or more versions back.

History is one thing, but the current trend line is another. For 8 years the Subscription program has coexisted with the Upgrade program. During that time our customers have been free to chose either strategy for keeping their technology current. Based on the results, their choice was clear: the majority of customers buying over the past few years have opted to leverage the Subscription program to stay on the latest technology in the most cost effective way possible. Only a few have elected to stay current through one and two version upgrades. The rest upgraded from older versions – three or more back. Of course Autodesk still offers all those choices going forward, albeit with a slimmed down price sheet.

There is one last point that I would like to make: While we believe Subscription is the most cost effective way to stay on the latest design technology, there is much more to the program than cost savings. Direct access to Autodesk product support specialists, Advantage Pack© bonus features, and free software for home use are just some of the value-added aspects of the program. In short, we are committed to an ongoing, continuous reevaluation of both the cost and benefit components of the Subscription value equation in order to make it an attractive option for as many customers as possible.

Thanks, again Steve for allowing me the time to speak with your readers.

Callan Carpenter interview 5 – the 12 month cycle

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This 5th post concludes the Callan Carpenter interview series. For the record, this interview was done in real time over the phone, with no prior notice of the questions.

SJ: The 12-month cycle that you have for most of your software has come under some criticism from all sorts of people, especially me. Once you have your customer base practically all on Subscription, what’s the incentive for the 12-month cycle to persist?

CC: In what way have you criticised the 12 month cycle?

SJ: In that it damages the product. In that there’s not enough time to release a properly developed product within that 12-month cycle. This is an observation that many people have made going back many years. That’s the basis of the criticism; not that, “Oh no, you’re giving me more software”. Well, there are people who complain about that but I don’t think that’s a valid criticism. I think the valid criticism is that it damages the product. A poll that I ran on my blog asked that question: is the 12-month cycle damaging the product? The answer was a very emphatic yes from the readers of my blog. I know that’s not a scientific survey but it fits in with other viewpoints I’ve seen expressed in various places.

CC: The question was, do we intend to continue to do that?

SJ: Yes. Once you have effectively have your customers on the Subscription model, so that you’re no longer internally competing with the upgrade model, do you really have to have a 12-month release cycle?

CC: Well, I think it’s a very interesting and valid question, do we need to have a 12-month upgrade cycle? I know there are customers who simply cannot absorb technology at that rate. But it’s a bit of a two-edged sword, in that if we go to a 24-month cycle, for example, do we get criticism for not providing enough value for the Subscription dollar or is it going to be viewed as a positive because it’s improved overall software quality? If we stay at the 12 months, we get the reverse argument. Maybe we’re providing the value that customers are paying for with Subscription, but what are we doing to software quality? I think that one of the things we have to look at over time is alternative delivery mechanisms. You’re going to start to see, for example, software delivered (as we have started to) with things available as Software as a Service. That obviates a lot of the issues associated with those release cycles you’re talking about. Your quality can go up, it’s a lot more controlled environment, and the customer doesn’t have to deal with an install, then another install and another install. So I would imagine you would see augmentation of our desktop products with products like that, that sort of move away from the complexities of the constant need to try and absorb new technology.

I think that it would be a very interesting thing to do on a scientific basis to understand whether customers prefer us to go a 24-month or an 18-month, or you-pick-the cycle. I think internally, your question about is it motivated by some kind of internal competition with upgrades, absolutely not. Upgrades, just look at the numbers, that battle’s over, so there’s no internal competition in that regard. The thing that we do have to deal with, which I think is endemic to any engineering creative group, is software engineers like to write software. They’re not motivated by issues of Subscription, or upgrade, or anything else. What they do is create product. We would literally have to rein those guys back if we wanted to go to a longer cycle. They’re the ones leading the charge on that, not the Subscription program.

SJ: So you’re saying that the development teams like the 12-month cycle?

CC: They do. It brings a certain discipline to them on the one hand; on the other hand, it’s kind of what software writers do, they write software.

SJ: Right, but they can write software that takes 12 months and isn’t finished or they can write software that takes 18 months and is finished. If I were a developer I know which I’d prefer.

CC: I hear your point. I think something we have to always look at is what’s the right balance between functionality and trying to build a bridge too far and to get it released. That’s something I know the product division managers are looking at constantly. Again, it’s absolutely not motivated by Subscription. Like you, I’ve heard customers say, “Would you go to 24 months?”, so I’d be happy to deliver that for them in some cases. But it’s really up to the product divisions.

Callan Carpenter interview 4 – enhancing the program

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Part 4 of 5 in this series.

SJ: There is always the fear that once you have all of your customer base on Subscription, you’re not going to need to offer those benefits any more. Can you assure people that that’s not going to be the case, that you are going to keep being “nice” to your customers?

CC: Absolutely. I think my team and I spend as much time and brain energy trying to figure out how to enhance the program as anything else. Our goal is to make Subscription a compelling value proposition; to make it not only cost-effective but valuable in other ways. An example would be the Advantage Pack program. We had a history of Subscription including extensions and other little technology bonuses for subscribers. But last year, we said we’re going to do something different with that. One of the problems with our historical technical Extensions program is that it was optional for product line managers to either participate or not. It was optional for product line managers to localise those Extensions in languages other than English. It was optional to make those Extensions incremental install as opposed to requiring a full reinstallation of a product.

So last year, we turned a lot of our product development upside down and produced the Advantage Pack with a whole new set of requirements. A product had to be localised, it had to be incremental install, and the top 26 or 27 product lines all had to participate in delivering that value. We saw the impact in the form of a 150% increase in the downloads of that Advantage Pack. That’s an example of trying to improve the value, and you’re going to see some additional fairly significant moves on our part on the Advantage Pack this year that are going to have a lasting impact on Subscription and how people look at it. Next year, we plan to improve it yet more, and so on. I don’t see any end in sight. It’s a competitive world out there and the only way you survive is by continuing to improve and grow and add value, otherwise you get replaced, and nobody’s immune to that. No company, no market.

SJ: You said that there was a 150% increase in Advantage Pack downloads. What was increasing over what?

CC: Prior to Advantage Pack, we had the Extensions program. If you took all the Extensions for the various products for the prior year, the last year we had Extensions (2008), and you compare that to the number of downloads of the Advantage Pack, it’s a 150% increase of Advantage Pack downloads over Extensions.

SJ: But there had been no Extensions for AutoCAD since the very early years, right?

CC: No, there were Extensions for AutoCAD. For example, there was an AutoCAD Extension 2 years ago for PDF writing. This year, I don’t want to give the cat away, but you’re going to see some very interesting technology that is being made exclusively available to subscribers for no additional charge, that I think they will find quite interesting.

SJ: I was scratching my head to think of Extensions; after the initial burst when they first came out there was practically nothing. There was a trickle of them that came through for the various verticals, but I’m struggling to think of AutoCAD ones between, say, 2002 and 2007.

CC: I think you’re highlighting a potential example of a challenge that we had with the old Extensions program in that it was optional for product line managers to participate or not. Today, that’s not the case and that includes AutoCAD. They do participate in the Advantage Pack program and will continue to do so, along with Revit, Inventor and 20-odd other products that are our biggest sellers.

SJ: So that’s a permanent fixture as far as you’re concerned? The Advantage Packs aren’t going to disappear?

CC: Not unless we can come up with something better.

SJ: So there are no other nasties you have planned for customers? You’re not going to, for example, change the EULA so that Subscription is going to have to be paid otherwise your licenses don’t work any more?

CC: No, at this stage we don’t see any change to the perpetual license model if that’s what you’re referring to. We have a hybrid model, which is different from some industries. Some industries are all perpetual, some industries are all term-based licensing, we are still perpetual, plus Subscription or maintenance. I don’t see that changing. It’s hard to predict 50 years into the future, but we have no plans for that.

Callan Carpenter interview 3 – the cost of complexity

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Part 3 of 5 in this series.

SJ: In one of my blog posts, I was pretty cynical about one of the phrases used in the press release: “the streamlining of upgrade pricing based on feedback from customers and resellers”. Was I wrong to be cynical about that? Did your customers really ask for upgrade prices to be increased to some nice round number?

CC: What our customers have asked for is simplified purchasing. We have a very complex price book and it leads to thousands of prices items, maybe tens of thousands when you have all the permutations across all the different geographies in which we sell software. A lot of that complexity came from having multiple-step upgrades, multiple-step crossgrades. There is a cost to maintaining that kind of a system. So our resellers certainly were asking for simplification and streamlining explicitly. Our customers were asking to find ways to make it easier to do business with Autodesk; can it be less expensive? One of the costs of doing business is maintaining a very complex pricing scheme as we have in the past. So while we may not have a customer say, “Gosh, I wish you would simplify your upgrade pricing” explicitly, it is implicit in trying to offer an easier path to buying and less cost in the long run because we’re not maintaining a very complex system that only serves a very small percentage of our customer base.

SJ: So there’s a real cost associated with this. Can you put a number on that as a percentage of the cost of the upgrade? Is it 1%? 10%? Is a big amount that customers need to be worried about?

CC: You know, I’ve never tried to put it as a percentage of the cost of an upgrade and tried to figure it out. Some of these things are a little difficult to untangle, but you can look at the complexity of your back office software, the staff that it takes to maintain it, the cost of the releases; our customers are simply aware of our releases of our software products, but they’re not aware of the fact that of course we have numerous releases of our internal systems for tracking and matching assets, price books, things like this. All of those have a cost associated with them. People, software, systems and so on. I haven’t ever tried to calculate that as a percentage of the cost of an upgrade, but it’s certainly a real cost nonetheless.

SJ: So let’s say it was costing people 5%. Why didn’t you reduce the prices by 5% instead of trebling them?

CC: Well, we didn’t really treble the prices. What we did was we said, remember for 3 or more versions back, the price is essentially unchanged. It may be a couple of hundred dollars more expensive or less expensive depending on the product and the market for the third version back. The big change was really in 1 or 2 back, a very small percentage of our customer base, less than 2% of our customer base that was buying those upgrades. It didn’t really make sense to us to maintain the complexity for that small percentage of our customer base.

I think that it’s an interesting point that we’re in because if you go back far enough in time, and you don’t have to go back that far, about 8 or 9 years I guess, with Subscription we could have been arguing the other extreme. We could have been arguing that, “My goodness, why are you making me pay for upgrades?”, and this Subscription thing either didn’t exist or it was very, very expensive. And then we designed Subscription to actually be very cost-effective, to be the most cost-effective to get access to this technology. So it’s an interesting inversion. I think it would be an interesting mind-experiment to wonder what would happen if we took away our Subscription pricing tomorrow, which is typically somewhere between 10% and 18% of list price of the product, depending on the product and the market. If we took that option away tomorrow, I think we actually would create tremendous havoc in the marketplace, because that’s really where the majority of our customers are today in terms of buying our software.

SJ: There are people who do still want to buy upgrades, those who want to have that choice. Do you understand the mindset of people who say, “I want to see what the product is before I pay for it”?

CC: I can appreciate that sentiment. I’d like to believe that our 25+ years of history has generally shown that our pace of advancement is generally up and to the right. Certainly there have been hiccups along the way; some releases have more functionality than others, but generally it’s up and to the right. But the customers who wish to do that, I certainly can appreciate that and that’s as good a reason as any for why we’ve kept upgrade and Subscription pricing as opposed to one or the other, because it gives customers a choice. For those customers who tend to want to wait and see, again the vast majority of them are doing it 3 or more versions back. If they’re doing it less than that, they’re on Subscription, by and large. So they still have that option. Even with the simplified upgrade pricing, I think it’s important to point out that we announced it over a year ago, and even today, if a customer goes off Subscription, they have up to a year to retroactively attach it. So the hope is with that timeframe, questions of, “Is the economy going to turn back up?”, those sort of things will be answered. If it takes 2 years for those questions to be answered, well then you’re back to 3 versions back pricing or more, and that has hardly changed, if at all. So I think that those kind of customers that want to wait and see what the product is going to be before they buy it, they have that option.

You have to also realise that there are also other benefits that come from Subscription in addition to the upgrade. Access to our product support teams, access to prior version usage, home use licenses, the prerequisite to global floating network licenses and other types of benefits, those are a very significant proportion of the value.

Callan Carpenter interview 2 – upgrades a tiny minority

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Part 2 of 5 in this series.

SJ: Is there anything specific you want to say about what I have written in my blog?

CC: There are a number of things we can do to put Subscription questions and Simplified Upgrade Pricing into context. I think the first thing we need to recognise is that there is a very small fraction of our revenue that comes from upgrades at this point in time. For the last 8 years or so, our customers have fairly well self-selected to either prefer to be on Subscription and have the latest version and technology available to them, or to not do that, in which case they tend to upgrade 3 years or more after the current release. We’re down to very low single digits of customers who upgrade, and of those only half of those upgrade 1 or 2 years back. So we’re talking about approximately 1.5% of our revenue that comes from customers upgrading 1 and 2 versions back. And so I think there’s clearly been a natural selection, a natural fallout over time of customers choosing; do I prefer to be on Subscription or do I prefer to pay for an upgrade?

If you look at the real impact of upgrade pricing, the real impact is the customers who prefer to upgrade from 1 or 2 versions back, that’s a very very small percentage of our business. For those who are 3 versions back or more, there’s really no change at all. For subscribers, which is the majority of the customer base, there is no change at all either. I just wanted to start by kind of putting that in perspective.

I think the other thing we should look at is that the history of the Subscription program is one of actually creating more value over time. It started out as simply an upgrade path, a cheaper path to upgrade than buying upgrades. Over time we’ve added more value in terms of additional support options, additional licensing benefits that come with Subscription and later on this year you are going to see things like a very enhanced Advantage Pack program, which started last year.

So as I read through a lot of the blogs, I was struck by a kind of lack of perspective on how the program has grown over time and how very few of our customers were actually buying upgrades.

SJ: There are some of your customers that don’t have any option but to be on Subscription, aren’t there? There are some markets and some products where Subscription is compulsory, right?

CC: No, with a few exceptions, I don’t believe we have any compulsory Subscription left. There may be a few in some emerging countries where software piracy is a particular issue, but generally speaking, the vast majority of our customers have the option to either be on Subscription or not.

SJ: For some years here in Australia, if you wanted to upgrade to the latest release, Subscription has been compulsory. Is this unique to Australia or does this happen elsewhere?

In Australia we do have a unique experiment, but that is fairly unusual. No other country comes to the top of my mind.

SJ: Is this experiment going to continue or does the point become moot now that the price of upgrading has been increased?

CC: I don’t think we’re going to be changing the way we do business in Australia.

Callan Carpenter interview 1 – Autodesk and social media

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A couple of weeks ago, Angela Simoes from the Autodesk Corporate PR team invited me to interview Callan Carpenter, Autodesk’s Vice President of Global Subscription and Support. Callan is responsible for the sales, marketing operations and product support associated with Subscription. He is also Vice President in charge of Jim Quanci’s Autodesk Developer Network. This morning, we had a very extensive discussion about Subscription and other topics that I intend to publish in several parts over the next few days. Deelip has already published a Callan interview, but mine is quite different.

In this post, I will let Callan introduce himself and then move into some questions about social media that I asked at the end of the interview. In this post, both Callan Carpenter (CC) and Angela Simoes (AS) responded to my questions.

SJ: Callan, can you give me some background on yourself?

CC: I’ve been at Autodesk since November 2008. Prior to that, I spent 20-odd years in the semiconductor and semiconductor-CAD software business: technologies in many ways analogous to what we have for our manufacturing, civil and media/entertainment markets here. I was focused on semiconductor design, manufacturing, electrical properties and so forth. I’m an electrical engineer by training. I’ve spent about half of my time in startups and about half in big companies. Everything from designing silicon to sales and marketing to engineering to you-name-it.

SJ: It’s kind of unusual for me as a mere blogger to be approached by a Vice President, but I’ve had this happen twice in the past couple of weeks. Is there a move within Autodesk to engage more with bloggers and social media?

CC: We’re definitely more conscious of social media than we have been historically. We are becoming more cognisant of the power of social media, whether it’s tweets or blogs or other forms. Like any company we have to adapt to that, respond to that and participate in the conversation.

AS: There’s no doubt that the line between what you would call traditional media and social media or bloggers is really blurring, and has been blurring over the last 5 to 10 years. You can’t deny that there are some bloggers, like yourself, Steve, who are quite influential in their industries. So it’s a natural move for us to start engaging more closely with bloggers, especially the ones that are clearly using our product every day, have a very engaged audience, who are really discussing some meaty issues on their blogs. Because we want to ensure that you have just as much information and access to our executives as someone in the traditional media would. Yes, we’re absolutely engaging more closely with bloggers.

SJ: Is this a policy decision or has it just naturally happened?

AS: It just sort of naturally happened. I’ve been here for 4 years now and ever since I’ve been here we’ve always engaged with bloggers in some capacity. This has increased over the past 2 or 3 years, significantly.

CC: I think it’s fair to say that Carl, our CEO and Chris Bradshaw, our Chief Marketing Officer, are very cognisant, very sensitive to… we have to adapt to the way our customers, and our next generation and next generation of customers are using technology, using social networks. They challenge us to not stay stuck in the old paradigms. So there’s a lot of support from the top for engaging in social media.

AS: I think you’d be surprised how many people at the top actually read various blogs and follow what people are saying. They definitely pay attention.

SJ: I read an interesting article the other day about who should be running social media for a corporation; should they have a specific department for it or whatever? How is that happening in Autodesk? Is that a PR function or does everybody do it?

AS: We as a company across all departments have put a lot of effort into looking at what other companies are doing, what works for large companies, trying to find the model that fits best for us. We found that there were already a lot of people across departments participating in Twitter and Facebook, posting videos on YouTube, and so the coordinating functions will sit within marketing, but each department or industry division will have a representative on a social web council, where we are collectively making decisions together. But there isn’t one person doing all this.

CC: So for example, in my capacity with product support, there is an element of social media to our strategy there as well, starting with an improved set of forums and new methodology there that we will be unrolling there later this year as part of our new comprehensive remake of our self-help infrastructure. Then I don’t know where it’s going to evolve to, I think that’s one of the interesting things about social media is, who knows where this is going to end? But we’re definitely looking at it from a support perspective, a marketing perspective, a PR perspective, even from a sales perspective, so there’s so many different dimensions to it. It’s coordinated by marketing, but it’s starting to enthuse almost all aspects of the business and that’s a very interesting thing. Who could have predicted that 10 years ago?

AS: We want to make sure if someone is tweeting about a problem with a download, or somebody isn’t able to log in to the Subscription Center for some reason, or even can’t find information on a product they’re looking for, all of those are different problems to be solved by different groups, and so we are putting into place listening mechanisms so that we are listening to our customers and addressing their concerns and questions in a timely manner. And that does take a lot of coordination internally but we’re working hard at it.

CC: A good example was over a year ago, we did our first major software download for the upgrades in 3 trial countries. One of the feedback mechanisms we used to improve the design of the download experience was listening to tweets.

A gaggle of geeks

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Time to lighten things up a bit, I think. While attending the AutoCAD 2010 product launch in San Francisco on 5 February 2009, I conducted a series of micro-interviews with a collection of AutoCAD bloggers and Autodesk employees. One geek asks 14 other geeks if they are geeks; nothing too serious here. I hope Shaan enjoys my tabloid journalist editing job right at the end.

YouTube link.

Thanks to all the interviewees:

Heidi Hewett, Autodesk blogger
Lynn Allen, Autodesk blogger
Melanie Perry, blogger
Robin Capper, blogger
Brian Benton, blogger
Todd Shackelford, blogger
Jon Page, Autodesk person
Matt Stein, Autodesk person and personal blogger
Shaan Hurley, Autodesk blogger
Donnie Gladfelter, blogger
Ellen Finklestein, blogger
David Cohn, blogger
Mark Douglas, blogger
Guillermo Melantoni, Autodesk person (still waiting for that blog, Guillermo!)

What is the collective noun for geeks, anyway?

Autodesk not listening? The response, part 2

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In this second part of the interview, the Autodesk trio continues to respond to the question about listening to customers.

YouTube link.

Autodesk not listening? The response, part 1.

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While attending the AutoCAD 2010 launch today, I took the opportunity to interview three Autodesk people: Eric Stover, Jon Page and Shaan Hurley. I raised the issue of Autodesk being seen as not listening to its customers, and was given a very comprehensive response. Here is the first of two parts of that interview.

YouTube link.

Disclosure: Transport, accommodation and some meals were provided by Autodesk.

(Don’t) Ask Autodesk a question

If you had a real live Autodesk development person standing in front of you right now (an AutoCAD Product Manager, for example) and were allowed to ask one question, what would it be?

Please add a comment here with your question. I would ask that you keep your question civil and reasonably concise (one or two sentences), and bear in mind that the development person in front of you isn’t going to have a useful answer to policy questions about pricing, license agreements, customer service and so on. Other than that, anything goes, so let’s have ’em.

I can’t promise that your question will get answered, but I’ll see what I can do.

Note: comments are now closed, as this post keeps getting mistaken for an ongoing mechanism for asking Autodesk questions.

cad nauseam

Mostly AutoCAD, BricsCAD and related subjects

Tag Archives: Interview

The big Bricsys interview 4 – thank you, Autodesk

The big Bricsys interview 3 – looking after people

The big Bricsys interview 2 – making money

The big Bricsys interview 1 – why invite the press?

Carl cashing in his chips

Not answering the question

Autodesk’s Callan Carpenter responds to Subscription follow-up

Callan Carpenter interview 5 – the 12 month cycle

Callan Carpenter interview 4 – enhancing the program

Callan Carpenter interview 3 – the cost of complexity

Callan Carpenter interview 2 – upgrades a tiny minority

Callan Carpenter interview 1 – Autodesk and social media

A gaggle of geeks

Autodesk not listening? The response, part 2

Autodesk not listening? The response, part 1.

(Don’t) Ask Autodesk a question