Autodesk, a prominent leader in the software for the architecture, engineering, construction, manufacturing, media, and entertainment industries has been trending among the software resellers on their recent accouchement on the business model. The company has dropped their perpetual licensing following the footsteps of all the major software OEMs. In an exclusive chat with B Swaminathan, Associate Editor, Pankaj Gauba, Country Manager Channels, Autodesk, India and SAARC, explains the reasons for new business models. Excerpts:
Swaminathan (Swami): Please explain why Autodesk has dropped the perpetual licensee.
Pankaj Gauba (Pankaj): We have announced to move to a Desktop Subscription based model in which most standalone products will be available only as Desktop Subscription beginning February 1, 2016. The major reasons why we are moving onto Desktop Subscription are given below:
- To offer our customers a simplified product management and deployment experience
- Making it easier to introduce new tools and technology into the workflow – Access to the latest software and product enhancements
- Lower upfront cost and the ability to pay as you go
- Gives the users the right to use the software for a specified period of time
- Option to renew their contract for using the software
Also, Desktop Subscription are term based licenses (always current) and are available for following terms in India & SAARC:
- 3 year
- 2 year
Swami: Why can’t Autodesk have both perpetual and subscription model?
Pankaj: Desktop Subscription grants license holders the right to use the software for a specified period of time with the option to renew their contract for additional payments. Customers who purchase a Desktop Subscription receive benefits such as Basic Support, options for more advanced support, access to the latest software and product enhancements, and in some cases, access to select cloud services. Active maintenance subscription agreements on previously purchased perpetual licenses will continue to be renewable.
Another advantage of having subscription over perpetual licenses is that instead of getting a huge chunk of revenue on an annual release cycle, it comes in much smaller increments over the course of the year as per the user requires.
However, customers with perpetual licenses purchased prior to the cutoff date can continue to use their products with support from Autodesk. If these customers are on maintenance contract, they can continue to renew the same before expiry.
Swami: What are the advantages for any channel partner of Autodesk with the new model?
Pankaj: Autodesk is ensuring that the transition to Desktop Subscription is as smooth as possible and will have significant benefits for our channel partners as well as our customers. Firstly, we are providing them the time needed to assess their options by providing a full year of advance notice of changes to come. Secondly, we are allowing Maintenance Subscribers to continue to renew their Maintenance Subscriptions and receive the benefits of their Maintenance Subscription. We are also making Autodesk Account the one place to manage all Autodesk products, Desktop Subscriptions and services and providing the ability to our users to lock in their Desktop Subscription rate by introducing the option of a multi-year Desktop Subscription offering. Throughout this transition, we will work with our partners to ensure that these changes are smooth and continue to encourage use of Autodesk software
Swami: Explain your channel strength in India. (Explain your distribution model also)
Pankaj: We have a strong and focused channel in India. Most of our business in India is through partners. We have coverage in all states of the country. As on date, we have 3 National Distributors – Ark Infosolutions, Ingram Micro and Redington India who support our partners across the country. The biggest strength of our channel is their good domain understanding and their long-standing experience with our customers, products & technology.
Swami: In what ways the new business models will impact the training institutions of Autodesk?
Pankaj: Autodesk is committed to finding solutions that will ease the transition to Desktop Subscription-based models. Throughout this transition, we will work with our partner training institutions across India to ensure that these changes are smooth and continue to encourage use of Autodesk software. For example in education, the discontinuation of new perpetual licenses does not impact education customers. Qualified academic institutions, students and educators will continue to have free access to Educational Licenses.
Swami: What ways this subscription model will impact the smaller contractors and architects?
Pankaj: Autodesk products are only transitioning from perpetual licenses to Desktop subscription. The software would continue to be on premise for the customers, majority of whom are SMBs. Desktop Subscription model reduces upfront costs and hence will resonate with customers in SMB segment. The ability to scale up and scale down helps SMB customers to plan their investments over time.
Swami: Software giants are constantly innovating in the upgrading versions. For example, Office 365 has included storage space. In what ways you have innovated?
Pankaj: Every year, Autodesk upgrades its entire program suite to provide customers with expanded toolsets, unique interoperability and a consistent user experience. In May 2015, Autodesk announced the release of the Autodesk 2016 Design Suites that offer more control over all aspects of the design-to-make process through a connected desktop and cloud user experience. We are pushing the boundaries on how products are designed and made, how buildings are built, and how entertainment is created. Through regular updates, we address the entire workflow: from capturing reality and iterating on a design, to physically making that design through 3D printing or other forms of fabrication. These updates to the entire suite allows deeper integration with cloud services, usability enhancements, flexible subscription options and enhanced collaborative processes that will considerably accelerate the future of how things are built or made. The tighter integration with Autodesk 360 will provide our customers faster rendering, visualization, simulation, and collaboration capabilities through design in the cloud.
Swami: In what ways you are ensuring the margins of your partners?
Pankaj: Partner profitability is at the core of our channel framework. We have enhanced our channel framework to align with the changes in business model and are rewarding our partners accordingly. Moving forward we will continue to monitor this and make amends to ensure our business remains profitable for our partners.
Swami: Explain if you have any training sessions on the new migration?
Pankaj: Since the beginning of this year we have had multiple sessions with our partners explaining to them about the business model changes and key focus areas for them moving forward. At each of our quarterly meetings with partners we are reviewing their progress and alignment to the new business model. We have also ensured that best practices that are developed for the new business models are shared with the larger community in order to ease the transition for them.