The Next Evolution of Autodesk : Product to Platform?
Autodesk : Time to capitalize on the design revolution it catalyzed?
Did you know that designers for the last 19 Academy Award winners for Best Visual Effects used Autodesk (ADSK) software? Autodesk software is an integral component in the world’s biggest engineering, architecture and entertainment projects.
Autodesk was founded in 1982 by John Walker, a coauthor of the first versions of AutoCAD, the company’s flagship computer aided design (CAD) software. Its AutoCAD and Revit software is primarily used by architects, engineers, and structural designers to design, draft, and model buildings and other struc
tures. Autodesk software has been used in many fields, from the New York Freedom Tower to Tesla electric cars.
Today Autodesk generates revenues of $ 2.5 Billion annually and is one of the most successful software companies in Silicon Valley. Autodesk has been able to maintain a consistent growth trajectory over the past 3 decades, in part because of its beautifully designed software products and in part because of its deep understanding of the importance of platforms.
The key platform centric decisions in Autodesk’s history are :
- In 1986, Release 2.1 of AutoCAD opened the door for 3rd party developers to extend AutoCAD’s functionality to address a wide range of markets. This move was critical to strengthening AutoCAD’s market penetration.
- In 1997, Autodesk realized the impending dominance of Microsoft and started developing exclusively for Windows and stopped development for Mac. This decision helped it to focus resources and ultimately develop a massive global userbase
- Autodesk charges less than half the amount as its nearest competitors for comparable products, these subsidies have helped it gain pole position in marketshare (85%)
- Autodesk successfully managed to makes its file formats as the industry formats which forced its competitors to provide compatibility and thus ensuring its market dominance
- Autodesk realized the role software piracy played in the propagation of its products – In comparison to Microsoft, Autodesk was benign towards the offenders, particularly in the developing world.
Arguably, Autodesk helped to facilitate the outsourcing revolution by providing the digital tools to designers. Today, outsourced design work (engineering/graphics/animation) has emerged one of the biggest categories of outsourcing. Companies such as upWork(oDesk) provide a platform for employers and contractors to meet and facilitate business. Autodesk can position itself to become such a platform. It has unparalleled trust from both the designers and the organizations. Companies such as Intuit have already tried this, but it is a much more natural fit for Autodesk.
The challenges to develop such a business model for a product based company are non-trivial. Again, the approach of Quicken can serve as a potential path to success for Autodesk. Starting small, leveraging on its strength in education/certification, and developing rating systems can help Autodesk bring this idea to life, which can then serve as a sustainable competitive advantage.