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.