“There have been phases, from the one-off floppy install, through dongle licenses, to license servers, all the way to the Flex token services,” said White. “Now we find ourselves going full circle back to where we started — individual users again. Knowing what I can see about the changes in the business models from the time when we had individual single user licenses and networked licenses, there was about a 50-50 split.”
Larger customers tended to prefer network licenses, while small shops and solo practitioners preferred perpetual licenses and then individual licenses, with or without maintenance contracts. The single user did not have the burden of setting up license servers, as White pointed out that early ones were command line to get going.
Removing the challenges that the multi-user licenses and license servers presented, was a long-term goal. One-off purchased copies were the only viable option in the era before advances in the web, Cloud services, bandwidth, and ubiquitous connectivity fully matured. The move to named users is viewed by Autodesk as advantageous to their own business goals, but also ultimately for the end user.
“As we’ve moved forward, into the subscription world, single users have greatly outpaced multi-users,” said White. “The single user gets the value of the Cloud, processing, collaboration, and storage services. The license is named, and a lot of information comes with the naming part of it, for settings and preferences, so it makes a lot of sense.” Enterprises can still easily manage multiple named user accounts, and change names as needed, online and there are some enhanced reporting tools.
But how to move users away from enterprise licenses to named users? Cold turkey is one way, but they have decided against that. Instead, incentives were rolled out. “As we’ve moved on and decided to become a subscription company, we have slowly over time increased prices on multi-user licenses, to encourage people to move over to single,” said White. “But of course, we needed to make the single licenses quite attractive, and we also had to clearly demonstrate the advantages of named user licenses.” Currently, each seat in a multi-user license costs the same as two single users, so one can gain extra seats by converting.
The timeline is just over a year for the transition. “That’s all been laid out, the last date to renew a multi-user license is next year,” said White. “Since the very beginning, we recognize that many of the customers who are doing this are going on a long-term journey with us. So, we put in a program of advantaged pricing.” Without such incentives, and just a street pricing model, a move could look like a price hike. For example, a license on a maintenance agreement could be upgraded to a subscription (at 10%-15% of the original license cost), whereas it would be more initially if it was a new subscription. Even though a new subscription is only about a third the price of an old perpetual license, White said that they needed to keep the ongoing costs low for customers who decide to move from maintenance to subscription.
“We have this mapped out this offer through 2028 which was 10 years when we started the transition,” said White. “No more than a 2.5% increase per year, or more than 5% every two years. Basically, that is a cost of living increase. Committing to this for 10 years is almost unheard of in the industry. The first worry a customer has when they hear about subscriptions is that we might jack it up the next year. Moving forward we will keep those maintenance to subscription price protections in place through 2028.”
When folks hear about subscription models, they also sometimes have visions of a company sitting back, raking in the income, and taking the users for granted. But one way to look at it is that the subscriber may have even more leverage to keep vendor on their toes, keeping up with the R&D and updates, and to listen to customer needs. Unlike a perpetual license, where one pays a lot up front, and may take years to recoup the investment, the subscriber is only on the hook for a year and can walk at any time if they are not satisfied. A company cannot afford to do anything that might drive a customer to walk.
A prime example of this customer leverage was when a group of architects in the UK wrote an open letter to Autodesk, critical of the development cycle of Revit features (for architecture). Revit is one of the most popular tools used, for instance in the rapidly growing world of BIM, but there are alternatives. Autodesk recognized this and responded, openly admitting that the rate of development in that specific area could be better, noted improvements already under way, and initiated new channels for pipelining customer feedback and requests more rapidly into the development cycle.
“This is a key area of focus, becoming more of a customer centric company. Look at Apple, they are a prime example of customer centricity. Steve Jobs cared more about what the customer, the consumer, would want than large customers or industries wanted. We have to focus on the individual user,” said White.