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Software Businesses The Almighty Buck

Autodesk To Follow Adobe's 'Rent Our Software' Business Model? 89

Posted by Soulskill
from the apparently-the-market-has-decided dept.
dryriver writes "Autodesk will detail in October an 'evolution' of its business model that includes more options to rent its software, rather than buying it, CEO Carl Bass said in an earnings conference call yesterday. Bass promised an array of new rental options by the end of the year that he said will give customers more subscription options and increase the predictability of the company's revenue over time. Bass stressed that Autodesk wasn't upending its existing model, but augmenting it. 'Recall that, just 10 years ago, we added subscription maintenance to our revenue stream,' he said. 'That was a big change at the time, and there was no shortage of skeptics. Today, that's a billion-dollar business and represents over 40% of our revenue. Suffice it to say that transition was a huge success.' Analysts on the call immediately started drawing comparisons with Adobe's move earlier this year to a subscription-only pricing model for its Creative Cloud software. Bass said that Adobe's success made Autodesk more confident about the feasibility of rental pricing, but suggested that Autodesk's move wouldn't be quite as aggressive."
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Autodesk To Follow Adobe's 'Rent Our Software' Business Model?

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  • Companies using AutoCad are used to having reoccurring annual license fees, unlike those using Photoshop. However, I wonder how/if this will effect their customers who need to use multiple versions of AutoCad. The engineering company I did IT work for years ago used the latest version for some projects but most required the previous version (generally government projects).
    • Adobe gets around this by promising that you can 'keep' your old versions around and just 'move forward' for new stuff. I would imagine that Autodesk would do the same. After some reasonable amount of time, the only version standing will be the current one and all you have to do is to make sure the old formats still load. Which is what software companies should do anyway.

      However, one gets the impression from TFA that Autodesk is planning (at least in the short term) to do a hybrid model. Sell both the p

      • by Silvrmane (773720)

        for me, it's a bit cheaper and quite a bit more flexible

        Is it really? Because I ran the numbers and it gets quite a bit MORE expensive, especially in a shop like ours, once you consider past the 1st year "buy it" costs vs. rental. The CC model is a gigantic screw job. Don't believe me though, just run the numbers. You're paying quite handsomely for a product you used to be able to just buy and own, and the moment you stop paying the monthy fee, you can no longer open your old files. Something to think ab

  • by goruka (1721094) on Friday August 23, 2013 @05:15PM (#44659577)
    First of all, before many here start mentioning Blender, Autodesk already has this kind of pay-per use business model with medium to large companies, where they provide software per seat, render farms and support.
    Blender has been ready for mainstream usage for a long time now, and plenty of small studios around the world already use it for short films, game development, commercials and special effects. It's actually the lack of this kind of support and corporate presence what is avoiding it to get more adoption in larger companies.
    So, this is not a chance for Blender, quite the contrary, Blender needs to do more like Autodesk.
    • Or www.bricsys.com/bricscad/

      try it. They have a 30 day demo

    • Has Blender stopped making major UI changes every six months? Because that was what was happening a few years ago. I enjoyed doing 3D as a hobby. Got started with Lightwave in College, but at $3k at the time it was a little pricy for me. Blender was free and while it took more tweaking to get similar results it could be done and it was fun. For me the hobbyist Blender 2.25 ~ 2.41 was great.

      Well then Blender began making huge UI changes every few months. By the time I'd relearn it, update files, it wou

    • Ummm if you haven't noticed blender is opensource, it came from being closed source where it sat languishing until the community ( me included ) bought the source and its development/use exploded.

      Openness is NOT the problem here. Marketing however, is.

  • by Anonymous Coward

    I will be sticking with Photoshop CS6, and I won't be 'renting' any software... Adobe has managed to get away with this, as PS is/was the only game in town.. And no, GIMP is not competition (and I have been using that, since the late-90s).. I wonder how many realize that GTK actually stands for Gimp ToolKit?

    • by dgatwood (11270) on Friday August 23, 2013 @05:38PM (#44659799) Journal

      Photoshop was the only game in town. They're losing the low end rather rapidly to other companies like Corel and Pixelmator. It's only a matter of time before that erosion eliminates their market.

      Worse, Adobe's decision is having serious fallout for other communities like the photographer community that historically always used Photoshop for their touch-up work because it integrated well with Lightroom. Even though they haven't been stupid enough to make LR cloud-only, there are a lot of folks who are very unhappy with the current state of affairs.

      I suspect that within two or three years, one of two things will happen: Adobe will back-pedal on the whole rental-only model or Pixelmator and Corel Paint will get significantly improved, fully native DNG support and photographers will dump Photoshop en masse, and along with it, quite possibly Lightroom. The current situation is simply unsustainable.

      For Autodesk, I doubt anyone will care. From what I've seen, outside the corporate world, nobody in their right minds uses Autodesk's products unless they have no alternative, so you can safely assume that they're going to milk this for every penny it is worth until they eventually go belly up. Their goose is cooked; it's just a question of who is going to carve.

      • by Rinikusu (28164)

        From a student standpoint, I'm okay with Creative Cloud. $19/month and I get the latest version of whatever software I'm using, even if they do a number jump. Granted, I'm not using Photoshop, but Premiere, After Effects, Audition, and SpeedGrade, primarily. Buying the academic pack would be around $250-300. I'll be using this software for the next year or so, and I get free upgrades that would normally cost another $250-300 for the Academic versions (at least, that's how I remember: Academic licensing

        • by MatthiasF (1853064) on Friday August 23, 2013 @05:55PM (#44659945)
          For the amount of money you pay for some college classes and the simple fact that you usually use the same software across several classes, I do not understand why the universities and colleges just don't comp the software to the students using a similar rental model from the software vendors for the duration of the classes.

          Even in an academic setting, the rental model is more expensive than the academic versions previously. If Adobe upgraded their software every two years, as they had for a long time, then you'd be paying about $150 a year.

          Renting at $20 a month is $240 a year, so students are actually getting screwed too.

          Corporations are incredibly pissed from what I have seen personally and have the same sentiment as OP.
          • Renting at $20 a month is $240 a year, so students are actually getting screwed too.

            Sort of. $20 / month gives you the entire Creative Suite (at least this year). Not bad if you're using more than two or three applications. For a student, it could open up a lot of possibilites.

            Until next year when they double the price, of course.

            • by Rinikusu (28164) on Friday August 23, 2013 @06:43PM (#44660339)

              Exactly. $20/month, I'm in. $40/month? No thanks, unless I magically get a job doing this for a living.

              Honestly, if I could give aspiring filmmakers some advice:

              It doesn't matter what you cut on, it's the film that matters. No one watches your movie and says "Man, I bet this was cut on an AVID system!" Workflow is a trivia question at best, and based on the quality of films I had in class, the Editor used was the last thing that mattered. Some of our best films were cut on iMovie and MovieMaker. I used both Vegas and Premiere. Same thing with the camera: the guy that shot on a borrowed $7k camera? It looked pretty good, but I wish he learned how to write a better story. The best film of the semester was shot on an iPad (imo, of course. it actually placed 2nd behind a film shot on a t3i). You can learn to shoot a film using your web cam if you're smart about it. Sound, on the other hand...

          • by Rinikusu (28164)

            My school is cheap ($125 per class), but I understand where you're coming from. I thought "hey, cheap class!' and got into film school, but I've spent well over that in camera, lenses, tripods, memory cards, batteries, software, laptop, etc etc. Now, like I mentioned in another response, my school actually has cameras and a lab where I could have done all my editing and filming on for "free", but then I'd have to schedule equipment check out, take time off from work to go edit in their labs that are only

        • by dgatwood (11270)

          $19/month and I get the latest version of whatever software I'm using, even if they do a number jump

          But why do you care if you have the latest version? Unless you're working in the industry or using the apps on a daily basis, a three-year-old version is likely just as good as the current one.

          • by Rinikusu (28164)

            Because I care. And that's all that really matters, right?

            • by Rinikusu (28164)

              More seriously, you're actually right, but for a "poor college student", I can scrape up $20/month vs paying the $250-300 (just looked at ebay, more like $500?) for the academic retail package up front. Truth be told, I could do all of what I did this semester with Sony Vegas HD, or probably through Cinelerra if I went the Linux route (I don't have a mac at the moment). The school uses iMovie HD and frankly, they don't really care what we edit on: they just want the students to learn how to shoot and cut

              • by Y-Crate (540566)

                If your intent is to move into professional production, learn Avid, FCP and Premiere - in that order. Though, truth be told, Premiere comes in a distant third. It's been gaining ground since the FCP X disaster, but doesn't quite have the same market penetration.

                Honestly, almost no one is going to care about the content of your student projects. But they will care that you used them to learn how to work with different editing platforms.

                • by Rinikusu (28164)

                  Your student projects = your reel. We've got quite a few industry pros in the classes for shits and giggles (and I've got got plenty in my circle of peers.. this is hollywood...) and they've all said basically the same thing: an editing suite is an editing suite. Similar to programming languages, once you've learned one the concepts are the same across the board. Implementation may be slightly different or the feature set might be more robust between them, but unless you're a freelancer who is required

      • Photoshop was the only game in town. They're losing the low end rather rapidly to other companies like Corel and Pixelmator. It's only a matter of time before that erosion eliminates their market.

        Worse, Adobe's decision is having serious fallout for other communities like the photographer community that historically always used Photoshop for their touch-up work because it integrated well with Lightroom. Even though they haven't been stupid enough to make LR cloud-only, there are a lot of folks who are very unhappy with the current state of affairs.

        And I suspect that Adobe doesn't really care. If you buy a copy of Photoshop once every 4 - 5 years, you're not sending Adobe much love. So they don't send much back. If this works for the bigger shops / better customers than it's a win. Remember, if you don't sell to the hoi polli, you don't have to support the hoi polli.

        I suspect that within two or three years, one of two things will happen: Adobe will back-pedal on the whole rental-only model or Pixelmator and Corel Paint will get significantly improved, fully native DNG support and photographers will dump Photoshop en masse, and along with it, quite possibly Lightroom.

        Which will be fine, if they do it. I'm afraid that Corel and Pixelmator just don't have the ability to lift their products to near PS status. For a lot of people, what they have may

        • by dgatwood (11270)

          And I suspect that Adobe doesn't really care. If you buy a copy of Photoshop once every 4 - 5 years, you're not sending Adobe much love. So they don't send much back. If this works for the bigger shops / better customers than it's a win. Remember, if you don't sell to the hoi polli, you don't have to support the hoi polli.

          The problem is, those bigger shops hire contractors who are suddenly not running an old copy of Photoshop, but instead running some competitor's products. The more this happens, the more

      • by BLToday (1777712)

        I've been using Pixelmator a lot more, I also have CS5 installed. Can't argue with Pixelmator's $15 cost. Does about 90% of everything I use on Photoshop. As for a LR replacement, you can try using Raw Photo Processor. It's more difficult to use, but lots of controls.

      • by mr_null (16516)

        Worse, Adobe's decision is having serious fallout for other communities like the photographer community that historically always used Photoshop for their touch-up work because it integrated well with Lightroom. Even though they haven't been stupid enough to make LR cloud-only, there are a lot of folks who are very unhappy with the current state of affairs.

        Yep. I'll be sticking with LR4 and CS6 until they no longer meet my needs, then I'll be re-evaluating other offerings. They can say they won't switch LR to a subscription based model, but after having CS pulled out from under me like that, I'm not going to take the chance.

        • by dgatwood (11270)

          I tend to agree. I think the best thing that could happen to Adobe would be getting bought by somebody. Anybody. Except Autodesk. That would suck slightly worse than the current situation... but not much.

    • And no, GIMP is not competition (and I have been using that, since the late-90s).

      The fact that I use it instead of Photoshop shows it is. I suspect that as Photoshop start moving more and more to the cloud and users have to pay a subscription, more people will suddenly find Gimp very competitive.

      • by asm2750 (1124425)

        And no, GIMP is not competition (and I have been using that, since the late-90s).

        The fact that I use it instead of Photoshop shows it is. I suspect that as Photoshop start moving more and more to the cloud and users have to pay a subscription, more people will suddenly find Gimp very competitive.

        I would rather rent Photoshop than ever use GIMP again.

        • by JackAxe (689361)
          I'd go back to using Photoshop CS2 full time -- which is free -- than rent Photoshop or use GIMP again. I use CS2 on my PC since my newer license of Photoshop is only for my Mac. There really is nothing I can't do in CS2 that I can do in CS6 on my Mac -- I've been using Photoshop since version 2, so the memory limitation of CS2 doesn't hinder me.
      • by Y-Crate (540566)

        And no, GIMP is not competition (and I have been using that, since the late-90s).

        The fact that I use it instead of Photoshop shows it is. I suspect that as Photoshop start moving more and more to the cloud and users have to pay a subscription, more people will suddenly find Gimp very competitive.

        I've never seen GIMP used in a production environment. It's just not really there yet.

        (Disclaimer: I've worked for a fair number of TV networks and on several features you've probably seen.)

        • I suspect Gimp is used much more today, but even 10 years ago Gimp Forks was used in the Media Industry (Diclaimer I have heard of these :)

          Elf (2003)
          Looney Tunes: Back in Action (2003)
          League of Extraordinary Gentlemen (2003)
          Duplex (2003)
          The Last Samurai (2003)
          Showtime (2002)
          Blue Crush (2002)
          2 Fast 2 Furious (2003)
          The Harry Potter series
          Cats & Dogs (2001)
          Dr. Dolittle 2 (2001)
          Little Nicky (2000)
          The Grinch (2000)
          The 6th Day (2000)
          Stuart Little (1999)
          Planet of the Apes (2001)
          Stuart Little 2 (2002)
          Spider-Man

          • by ulricr (2486278)
            None of these has used cinepaint exclusivly. these productions used a hundred time more photoshop and roto tools than cinepaint. they also used Notepad, it doesn't mean that notepad is an awesome production tool. any crap gets used on production where there are hundreds of people and a dozen vfx companies involved. it's meaningless but the cinepaint people do love to hang on to the illusion. All of this only occured because of one programmer at Rhythm & Hues. Cinepaint was dump HARD quickly after.
    • by jmw123 (2866773)
      I use five Adobe CS apps daily - Audition, Premiere Pro, Photoshop, Illustrator and Acrobat Pro. The Creative Cloud model is actually considerably less expensive than keeping those up to date. I'd fallen into updating them every 2nd or 3rd release owing to the expense. Now they're updated frequently -and- I have sampled some other apps that I'd never have purchased because of infrequent need. It remains to be seen if Adobe can resist increasing the price for a subscription every year the way my ISP and cell
    • Re: (Score:1, Interesting)

      by Anonymous Coward

      Sorry, but GIMP is the sole task performed for my 6-figure salary.

      Protip: A rock-star artist(I am not one, but I do well) does not need a $5000 paintbrush to create a masterpiece. The software is like the brush, without the skills to use it what is the point? I prefer GIMP to PS because it's so extensible. Writing plug-ins is 110% easier when you can view and understand the source code that will be utilizing your plug-ins. I realize not all artists care to learn GTK or C - that's great - it creates contrast

  • Waddya gonna do when the company goes belly up? You'd better take screen shots while you can...

  • by Anonymous Coward on Friday August 23, 2013 @05:25PM (#44659697)

    The small civil engineering company I work for has a subscription for two network seats of AutoCAD. Major gripes include:

    1) The network license software looks like it was made in the 1990s (FlexIM, not sure if anyone is familiar with it)

    2) There is literally no discerable difference between versions of AutoCAD, except for
    - The name (eg AutoCAD 2014 vs 2013)
    - The icons (which IMHO have been getting uglier since ACAD 2012)
    - The default file save format (even though all recent versions prompt to save-as 'AutoCAD v 2010 or later' by default, if you try to open something save in 2014 in 2013, you're SOL)

    Although sages tell me there are new features each year, no one I know has ever used them let alone needed them. So, for our purposes, new versions of Acad are basically a problem, because the file-format versioning nonsense forces everyone to upgrade if one person upgrades (upgrading, btw, takes probably an hour out of your day, and forces petty BOFHs like myself to dick around with the FlexIM network licensing).

    All this is a long way of saying: you're better off getting a new version of autocad every five years, at most. It's a product that was completed years ago and is firmly into the Acrobat-like 'milking the customer for flashy useless features' phase.

    • by sjames (1099) on Friday August 23, 2013 @05:36PM (#44659779) Homepage

      You'll be thrilled to know that the licensing software WAS made in the '90s and hasn't really changed much. I'm all too familiar with it.

      • by dbIII (701233) on Friday August 23, 2013 @08:58PM (#44661203)
        Flexlm works perfectly in this role and works this way:

        If the rep rings up the company running the software, asks if they have any problems, and gets minutes of hate about licence software fucking up then the client is sticking to the licence and using the software honestly.
        If the client answers "fine, no problems" then the client has worked around flexlm and could be ignoring whatever licence restrictions have been imposed on them.

        Flexlm is there to punish the honest. I still have a machine running redhat7.2 to keep an old piece of shit version of flexlm running so that I still have a licence server for an old application that gets used every now and again. The actual application will run on the latest and greatest linux, but not flexlm. It's the same reason the serious stuff is still all on RHEL5 instead of 6 - the application is happy on the new platform but not flexlm. It's a time waster to punish the honest.
    • Firstly, if you don't see any use to updating each year, why bother? Then you can avoid the licensing hassles, while you're at it. The main benefit for being on subscription is the technical support from Autodesk. Though, I wonder how many people realize they get that benefit. For most people, there aren't many really useful updates to AutoCAD each release. I will agree that there aren't many new updates to AutoCAD worth mentioning in the past few releases of the program. They've focused on areas that
    • FlexLM is used for Cadence OrCAD and the Xilinx dev environment as well.
  • There are situations where you only want the software for a couple months. And that might make the software price more reasonable to some buyers. But I suspect the big institutional buyers don't care either way so long as the net cost is about the same.

    This has no impact on pirates... Lets be honest here, the pirates will crack the software in about 2 hours and release it.

    The only way to really stop the piracy would be to offer the software as a cloud only service. But then the institutional buyers would se

    • This sort of software isn't typically used for just a couple of months. It takes that long to just get past 'Hello World'.

      • companies will either find the price acceptable or use a competing product. And yes... competing products exist. And they will multiply in proportion to demand.

  • Currently you can buy a version outright (say AutoCAD 2014 - you can use that version forever). Alternatively, you can get it on subscription (you pay 20% or 30% of the full cost, but pay it every year), which allows you to get the new version every year plus more support/features. Renting is simply the third option - the other two aren't going away. Their subscription model is a predictable cash cow at this point - there is no way they are giving that up.
  • To rent software. If it's installed on my computer it's mine to use when and where I see fit. But Autodesk as another problem - their software is too pricey to begin with. And a lot of their wares are pirated like crazy.
  • by Anonymous Coward

    I work at a moderate sized structural engineering firm. We use both AutoCAD and Revit. AutoCAD updates their file format every few versions. For example, the AutoCAD file format was updated in 2000, 2004, 2007, and 2010. A new version of AutoCAD can always save down to an older format though, so as a firm you can get by without always updated AutoCAD as long as whoever you're collaborating with on drawings knows to save their drawings in a format you can open. There's also some free DWG version convert

  • by BulletMagnet (600525) on Friday August 23, 2013 @07:15PM (#44660595)

    I work for a Medium sized GC and we have the pleasure of using their Building Information Modeling (BIM) suite.

    13K PER SEAT for the product (BDS Ultimate)
    Crappy compatibility with previous versions (which are released yearly) - Everyone on the design and build teams basically all need to be on the same version.
    Does not like running Side By Side older versions so it's not like you can plant them all together.
    Holy Megabloat - Last year's installers came on Autodesk-monogramed 32GB USB3 sticks ... and the installer damn near filled UP the stick. This year, they decided that all of us Subscription having clients wanted to download 32GB - all to save the cost of sending media, even if we've historically requested media (That's what I pay for your cheap @#(*^(@&*^)
    Frustrating at times - today I'm trying to install the 2014 version on a $6,000 Precision Workstation spec'd for Revit - I started at 10AM, it's still installing - very slowly, but moving along. Same on our M6700 workstations.

    Not the least bit surprised that Autodesk software gets pirated ... they gouge the legitimate license holders outrageous fees for this stuff....I can't imaging how Ma & Pa Construction Company could afford this.

  • It hasn't been 22 years since I was troubled by the fact that I didn't
    have the dough to please Autodesk (TM).
    So autodesk went out of my frame of thought. Note the small 'a'.

  • Isn't a seat with solidworks esprit and logopress expensive enough already.

  • Buy one thing from them now and expect threats of audits ten years later. They never managed to improve their software from the cheap CAD stuff that you only needed a PC for they just managed to squeeze out the competition for a while. Now there is plenty of competition so their stuff that has progressed little since the mid 1990s apart from GUI changes is no longer worth considering.
  • AutoCAD has been going downhill for years, we used to use it pretty heavily. But they have been actually degrading the product with each release. We've been sticking to AutoCAD Map3D 2006 as much as possible because it has more capabilities than any of the subsequent versions that we've come across.

  • From a business perspective, I don't see how this is a huge deal. Most software companies charge an up front fee plus a subscription if you want to keep current. I realize it isn't the exact same model, but companies are still paying out the ears for "support" and upgrades down the road. The only beneficiaries of this are the software company and the fact that the IT crowd doesn't have to go begging for a big check every 4-5 years for the latest and greatest version. (Accounting is much nicer about s
  • This old model will slowly come back. Since software these days does everything you want, why buy upgrades? Going to get worse as things move towards cloud hosting and not local installs.

    So often 'new features' are just rehash of old features or just marketing.

    They have to keep the cash cow going somehow.

  • They see the light at the end of the tunnel meaning not must more can be added with todays Technology and they have stretched out the so called "New Version" as much as the market will bare. We are under no obligation to keep them in business by renting software which will mean it will be run from some server somewhere on a computer running more copy's of the software then it should and also copy everything made for the NSA or whatever government department that needs free graphics or free graphic software.

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