Comments from Autodesk’s manufacturing analyst day

November 23, 2009

Posted by: Roy Wildeman

Autodesk recently conducted its annual Manufacturing Analyst Day event in Lake Oswego, Oregon, and I had the opportunity to catch up with executive leaders across the company’s spectrum of product brands.

These includeAlias for conceptual design, AutoCAD and Inventor for engineering design, and, more recent acquisition additions, MoldFlow and Algor for simulation.

Contrary to my original perception that Autodesk offers affordable, no-frills product design tools to lots of smaller, mom-and-pop companies, I learned that their business is significantly shifting to include more direct sales to large, enterprise-level manufacturers like Intel, Nestle, and Parker Hannifin.

In fact, approximately a quarter of Autodesk’s manufacturing business now comes from customers with over $2 billion in annual revenues, and it’s their fastest growing segment within this vertical.

While some of this shift is undoubtedly a result of Autodesk’s relentless pursuit of acquisitions, I was keen to understand if there was a more systemic reason behind this unexpected find. So, while at the event, I got the chance to interview two Autodesk customers at polar ends of the spectrum – a 50+ employee design shop of food processing equipment, and a $100B+ food and consumer products conglomerate.

Despite some expected differences in software needs (e.g. different scalability levels, different interoperability requirements with legacy tools, etc.) both customers impressed me with a common view on Autodesk’s value, specifically citing:

Lower cost of ownership. Autodesk’s explicit philosophy is to offer software which addresses 80% of total capabilities at 20% of the price -- a mindset which reinforces its low-price, high-volume sales strategy, simplifies pricing structure for its army of channel resellers, and prioritizes pervasive user requirements over relatively-rare, “corner case” functionality. The result? Software that is more affordable and “fit-to-purpose”.

Ease of deployment. Both customers I spoke with insisted that, compared with other software installations, Autodesk tools are quite reliable, always ready-to-use OOTB (per Autodesk’s Assurance policy), and simpler in a way that makes it easier for users to pick up new functionality. The net result? Software that has faster “time-to-value”.

If you’re familiar with Forrester recent Application Development research, you’ll recognize that these are the very same characteristics that typify Lean Software -- applications and architecture that, by design, cut through suffocating complexity and are slimmed down in a way that allows developers to deliver faster, "just in time" capabilities to the business. Autodesk’s approach also stands in stark contrast to competitive offerings from mainstay PLM leaders like Dassault, PTC, and Siemens, whose applications have taken on more-and-more weight, complexity, and corresponding deployment challenges as companies pursue a more ambitious, broader agenda for PLM.

Though these market leaders largely don’t view Autodesk as a viable competitor, Autodesk CEO Carl Bass is explicit in his view that the PLM market is positioned for low-end disruption where technologies with less product performance (at least in the near term) win over incumbent solutions because they are generally, to quote Prof. Christensen, "cheaper, simpler, smaller, and, frequently, more convenient to use". Sounds an awful lot like lean software again, doesn’t it?

Certainly there are still barriers to address before Autodesk’s lean product development tools become pervasive for large product development organizations, (e.g. evolving their sales strategy to include more direct sales, taming the growing complexity arising from serial acquisitions, resolving thorny data interoperability challenges in multi-CAD environments, etc.)

But if you accept the idea that a trend toward lean software has been building for years -- and is, in fact, accelerating in today’s current down economic conditions – then enterprise organizations are only going to view Autodesk as a more viable and competitive provider of product development technologies over time

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