Autodesk’s “Clumsy” Upgrade Policy

Today I returned from a much needed vacation in Malaysia and am busy catching up on my reading. This post by Ralph Grabowski alerted me to an article on The Motley Fool by Anders Bylund titled “Why Autodesk Upgrades Failed to Spark a Frenzy“. Anders writes:

Maybe Autodesk is simply shooting itself in the foot with a clumsy approach to upgrade options.

Anders compares the upgrade policy of Autodesk with the more customer friendly one of Adobe and writes:

With a tiered upgrade model like this, Adobe is sure to catch more flies at the sweet end of the spectrum while also giving more recent customers at least some incentive to upgrade.

This reminded me of something I wrote more than five months ago in a post titled “Autodesk’s New Upgrade Pricing Policy“:

Personally, I think this new upgrade pricing policy has the potential to add to Autodesk’s existing financial troubles. Here is why. Basically, most customers who are not on subscription are quite content with the version of AutoCAD that they already have. If they wanted the new features that get added to AutoCAD every year, they would be on subscription already. The current upgrade pricing policy ensures that. Moreover we are at the start of the three year DWG compatibility cycle that Autodesk has imposed on itself. So if an AutoCAD user does not upgrade for the next two years, he will still be able to exchange data with users of AutoCAD 2011 and 2012. My point is that an AutoCAD user who is not on subscription and who is quite happy with the version he has would probably sit tight for two more years and upgrade directly when AutoCAD 2013 comes out if he feels the need to do so. If history is anything to go by, AutoCAD 2013 is probably when Autodesk will change the DWG file format.

Take a look at these statistics that I pulled out from our CRM system. At SYCODE we develop AutoCAD plug-ins which work with AutoCAD 2000 through to AutoCAD 2011. Here is a breakup of the versions of AutoCAD our customers and prospects have been using for the last three months.

  1. AutoCAD 2010 => 30.95 %
  2. AutoCAD 2008 => 16.47 %
  3. AutoCAD 2009 => 13.88 %
  4. AutoCAD 2007 => 12.34 %
  5. AutoCAD 2004 => 7.02 %
  6. AutoCAD 2006 => 6.72 %
  7. AutoCAD 2005 => 3.89 %
  8. AutoCAD 2011 => 3.48 %
  9. AutoCAD 2002 => 2.48 %
  10. AutoCAD 2000 => 2.0 %
  11. AutoCAD 2000i => 0.76 %

As you can see, AutoCAD 2011 comes at a dismal 8th. Of course, I understand that AutoCAD 2011 has just been released and users take time install the latest version. But if we are to believe Autodesk’s claims that most of their customers are on subscription then AutoCAD 2010 coupled with AutoCAD 2011 should have been close to 100%, right? Clearly that does not appear to be the case. In a recent interview with Steve Johnson, Callan Carpenter of Autodesk said:

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.

Going by my numbers about 66% of Autodesk customers do not appear to be on subscription. At least 66% of my customers and prospects are not. Either that or they are stupid enough to be on subscription but are not using the latest version of AutoCAD. And then of course, I could be terribly off the mark because AutoCAD users on subscription somehow do not feel the need for software from SYCODE. 😉

I agree completely with Anders Bylund from The Motley Fool. Especially at a time like this Autodesk should be making it easier for customers with a version of AutoCAD one of two years old to upgrade and not make it more expensive for them. At least a whopping 43% of my customers and prospects are still on AutoCAD 2007, 2008 and 2009. And I simply have to assume that these people are not on subscription.

To me this new upgrade policy looks more like a well thought out and heavy handed approach aimed at solving the problem of customers who are refusing to join the subscription bandwagon. And like I said in my earlier post, this is absolutely the wrong time in the three year release cycle for Autodesk to do this. It hurts their interests the most. People who have upgraded to or purchased new licenses of AutoCAD 2010 can sit tight for two more years without giving Autodesk any money.

Maybe a clumsy move after all.

  • kellings

    I do agree with Autodesk needing to figure out how to get companies to upgrade easier and more quickly. However, most companies move at a crawl when it comes to upgrading.

    Companies don't want to upgrade in the middle of a project. The problem is that companies are always in the middle of a project. Or they don't want to upgrade until a service pack has been released. Or they always stay 1 version behind even though they are on subscription. Or the people making the decision on when to upgrade don't actually use the product.

    I can remember pleading with IT to install the version of Autocad that added otracking. They installed it and couldn't tell the difference between that version and the previous version so we didn't get it until I showed them with a real example how some of those little features add up to productivity.

  • There are many valid reasons for not yet running the latest release, despite being on Subscription. Saying that people who do this are stupid is, well, stupid. 🙂

  • I can understand being on subscription and using a version one year older. People wait for service packs and bug fixes anyways before they upgrade. My numbers show that as well. But being on subscription and staying on a version 2 or 3 years old, is indeed stupid. As stupid as purchasing a new car and letting it sit in your garage for a few years.

    I doubt anyone running AutoCAD 2007 is on subscription.

  • You're wrong. I personally know of companies on Subscription running 2007 on at least some seats (2005, even).

    With Subscription you're paying first and seeing what you paid for later, and there are penalties associated with dropping out and coming back in again. So there will be companies that stay on Subscription in the hope that a release comes along that they feel the need to upgrade to, but they don't feel that has happened yet. They may have a need to run one release for one group of users and another for another group. They may be unhappy with new releases for reasons of performance, stability, UI design, compatibility with add-ons, heavier system requirements, etc., and waiting until they are effectively forced to change by external circumstances. By staying on Subscription, they are in a position to upgrade when they feel like it, with a smaller financial impact than hopping off the upgrade train and then paying a huge lump of cash when they need to get back on.

    If it's reasonable to install a new release every 3 years or more (which seems to apply to about 1/3 of your customers), and Subscription is a cheaper way of doing that than upgrading, why is that stupid?

    Your numbers don't really tell us anything about Subscription v. upgrade proportions. All they tell us is that large numbers of people wait a while before installing a new release. We all knew that, surely.

    However, there is a fair point to be made about people on earlier releases who have hopped off the upgrade train altogether, or at least for a significant number of years. How would they be counted in Callan's figures? They wouldn't exist at all, as far as his income percentages are concerned.

  • Steve,

    I was not referring to companies using AutoCAD 2007 on *SOME* of their computers, but rather all of them. I guess you will agree that a company on subscription that has no seats of AutoCAD later than 2005 or 2006 are wasting their money.

  • I'm with Steve on this: it can be a surprise to some to see how many subscription Autodesk software releases are sitting on shelves un-installed and, finding out, those companies do not feel, and or know, they are not finacially disadvantaged. I guess Autodesk would have a feel for the number of these situations through authorizations?

  • rkent

    “…pleading with IT to install the version of Autocad…”

    Talk about the tail wagging the dog, I thought IT offered a service to its customers, sounds like many IT groups that have forgotten their mission to provide a service to those getting the work done.

  • Dairobi Paul

    Thanks for your well stated reply, Steve. I'm amazed that Deelip calls people on subscription that don't upgrade “stupid”. Apart from being outright rude it lacks any sense of analysis of why people don't upgrade. Your reply fits in with my own experience.

    A main factor in my productivity is being able to use AutoCAD instinctively. Part of this is knowing where the icons are for each command and then being able to identify the one you need in a split second. What annoys me is that Autodesk keeps changing the icons for the commands. To me this is more about marketing by Autodesk to make AutoCAD look new when in reality there have been a limited number of enhancements.

  • Dairobi,

    I think you have misunderstood me. I fully understand why people don't upgrade. I happen to be using Visual Studio 6.0 which is a decade old. So I know all about the usefulness of older products. I use it because I like it, but also because I have to for other external reasons. I also use the latest version of Visual Studio and all other versions in between. My point here is simply that if I was using old an age old version of a product and no other newer version and was still on subscription that would be a stupid thing to do because that product would be retired by the manufacturer and would probably not even qualify for an upgrade anymore, depending upon the upgrade policy of the manufacturer.

    I understand that staying on subscription is economical. But even that math goes negative after a few years. At that point it is better to get off subscription and purchase a brand new license when you need it, along with a subscription if you feel the need for it. I know of people who have done that and have got an even better deal because resellers/manufacturers will bend over for new licenses.

  • Mike

    ADSK has always been greedy in respect to its customers. Every
    upgrade is met with complaints over pricing. Not least the increase the
    EU has had to put up with, with no accountability.

    After reading around, it seems, that blatantly ADSK does not care if
    users get burned over the price upgrades or sub fees, in conjunction to
    their ever changing rules, and as ever they always try to ‘spin’ the
    numbers.

    I’d also suggest that they do have a new policy where unless you are a
    large company with many seats they just don’t care about individuals
    nor small seat installations.

    For years the policy has always punished independents and small seat
    installations. There is good reason for the many alternative products to
    ADSK’s offerings, and ADSK allowed, nay, made the environment for them
    all to thrive and succeed.

    Their stock prices somewhat reflect this if you look at the long
    term, their ratios are significantly lower, again over the long term,
    than many others in comparable software based industries.

    If sooner or later they don’t cotton on to the fact they are the
    creators of their own erosion, and had better serve customers,
    irrespective of size, the future is clear it’s Neutral or SELL.
     

    • doug

      Guys, I would like to correct one comment, as end users we are not Autodesks customers, the shareholders are. I am a CAD manager and IT manager for a civil engineering firm, and the cost per seat is $9,500.00 new or keep it on subscription each year for $950.00 per seat. Yes we are four years behind and for good reason, Autodesk completely changed its Civil design package to something that is significantly less productive. We keep the subscription to have the reciprocity of release 2009 which is our main platform. We are hoping that they get a clue about their new Civil 3D platform and make it more useful for the people who need to make a living with it rather than add a software engineers useless dream.

      • Ntellery

        Er,…. Doug, no they are shareholders. If you purchase a product you are a customer! An Autodesk customer in this case.   I’m thinking of sticking with ACA12 as Autodesk seems no longer interested in spending any money on development, just keeping it ticking on the current version of Autocad.  I only just upgraded from  09 myself because in 12 they introduced corner windows!  Apart from that I could have sat on 09. (oh they did refine rendering too which I use.

        • doug

          Er,…Ntelery, I was being sarcastic…Autodesks focus is not on its customers, it is on its Shareholders. If you were a business owner you might have caught the meaning of what I was saying.  

          Autodesk has the perfect scam in that it collects billions of dollars from its “customers” for second rate improvements that are certainly not worth what people pay for them. They are insulated from their “customers” in that they outsourced the responsibility of customer service to third party resellers. The third party reseller cannot make ends meet on sales alone, they must provide tech support, training and usually other services. Most third party resellers are not very good at providing quality tech support. I would not give a pint of warm piss for any support that I have ever received from a reseller.

           Please do not fly off the handle about that statement, I think that the resellers are good people, they are not equipped to deal with the poor product that Autodesk releases to please its shareholder.

          As for the reasons that anyone would upgrade is as unique as people. An enhanced rendering engine and cornering is not a capability that warrants change at my company.

  • the drawing mumpkin

    we only get one copy of the latest version in our company (25 licences) and use this to back save any incoming files to our various copies which range across 2004, 2007 and one copy of 2010………..suits us fine and avoids giving cash away to the greedy autodesk……if they made their products more reasonable maybe we might buy more updates!!