Comments from Autodesk’s Manufacturing Analyst Day

Roy Jpeg This
past Tuesday Autodesk conducted its annual Manufacturing Analyst Day event in
Lake Oswego, Oregon, and I had the opportunity to catch up with executive
leaders across the company’s spectrum of product brands (i.e. Alias for
conceptual design, AutoCAD and Inventor for engineering design, and, more
recent acquisition additions, MoldFlow and Algor for simulation). Contrary to
my original perception that Autodesk offers affordable, no-frills product design
tools to lots of smaller, mom-and-pop companies, I learned that their business
is significantly shifting to include more direct sales to large,
enterprise-level manufacturers like Intel, Nestle, and Parker Hannifin. In
fact, approximately a quarter of Autodesk’s manufacturing business now comes from
customers with over $2 billion in annual revenues, and it’s their fastest
growing segment within this vertical. While some of this shift is undoubtedly a
result of Autodesk’s relentless pursuit of acquisitions, I was keen to
understand if there was a more systemic reason behind this unexpected find. So,
while at the event, I got the chance to interview two Autodesk customers at
polar ends of the spectrum – a 50+ employee design shop of food processing
equipment, and a $100B+ food and consumer products conglomerate. Despite some
expected differences in software needs (e.g. different scalability levels, different
interoperability requirements with legacy tools, etc.) both customers impressed
me with a common view on Autodesk’s value, specifically citing:

 -         
Lower
cost of ownership
. Autodesk’s explicit philosophy is to offer software
which addresses 80% of total capabilities at 20% of the price -- a mindset
which reinforces its low-price, high-volume sales strategy, simplifies pricing
structure for its army of channel resellers, and prioritizes pervasive user
requirements over relatively-rare, “corner case” functionality. The result?
Software that is more affordable and “fit-to-purpose”.

 -         
Ease of
deployment
. Both customers I spoke with insisted that, compared with other
software installations, Autodesk tools are quite reliable, always ready-to-use
OOTB (per Autodesk’s Assurance policy), and simpler in a way that makes it
easier for users to pick up new functionality. The net result? Software that
has faster “time-to-value”.

 If
you’re familiar with Forrester recent Application Development research, you’ll
recognize that these are the very same characteristics that typify Lean
Software
 -- applications and
architecture that, by design, cut through suffocating complexity and are
slimmed down in a way that allows developers to deliver faster, "just in
time" capabilities to the business. 
Autodesk’s approach also stands in stark contrast to competitive offerings
from mainstay PLM leaders like Dassault, PTC, and Siemens, whose applications
have taken on more-and-more weight, complexity, and corresponding deployment
challenges
as companies pursue a more ambitious, broader agenda for PLM. Though
these market leaders largely don’t view Autodesk as a viable competitor,
Autodesk CEO Carl Bass is explicit in his view that the PLM market is
positioned for low-end
disruption
where technologies with less product performance (at least in
the near term) win over incumbent solutions because they are generally, to
quote Prof. Christensen, "cheaper, simpler, smaller, and, frequently, more
convenient to use". Sounds an awful lot like lean software again, doesn’t
it?

 

Certainly
there are still barriers to address before Autodesk’s lean product development tools
become pervasive for large product development organizations, (e.g. evolving
their sales strategy to include more direct sales, taming the growing
complexity arising from serial acquisitions, resolving thorny data
interoperability challenges in multi-CAD environments, etc.) But if you accept
the idea that a trend toward lean software has been building for years -- and
is, in fact, accelerating in today’s current down economic conditions – then enterprise
organizations are only going to view Autodesk as a more viable and competitive
provider of product development technologies over time.