Inspired by the successful transition of Adobe, Intuit and Microsoft’s business model—from sale of licenses to an ongoing subscription model—US-based technology firm Autodesk, which has been selling standalone perpetual licences for its popular software products, has moved to a subscription-only model. All its design software such as AutoCAD, 3D Max, Maya, Flame are now available on annual and quarterly subscription to its customers.
The company, whose software are primarily used by architects, engineers, and structural designers to design, draft, and model buildings, took this strategic decision in early 2016. It recently launched an e-store in India to sell its products based on this model. Now, designers, students and engineering professionals in India can buy Autodesk software online on monthly subscription basis. “The cost of acquiring Autodesk software has significantly gone down. What once used to cost R2-5 lakh is now available for as low as R3000 a month,” said Pradeep Nair, Managing Director, Autodesk India.
According to Nair, buying a software on a perpetual basis was a relatively expensive proposition. So Autodesk has moved everything to a subscription model, so that customers do not have to buy upfront but pay only for the time that they use it.
As expected, this subscription-based lower cost model seems to have discouraged piracy and encouraged users to move to Autodesk from other platforms. According to its third-quarter results, globally, subscriptions have grown to nearly 3 million, including 2.1 million maintenance subscriptions and 861,000 “new model” product subscriptions. Company officials believe some of these subscribers people were previously using pirated software, but now with a much more affordable option with product subscriptions, they have started buying licensed products.
Currently, Autodesk in India sells it software through a network of business partners, but company executives believe that the newly launched e-store offers an opportunity to scale up it sales in Tier 2 and Tier 3 cities. “If you are in Lucknow and do not know who the Autodesk partner is in that territory, you can still have access to our software because all you need to do is to go to the Autodesk e-store,” said Nair.
Although the company did not divulge its India revenue, over the past year, it has increased its focus on India, showing interest in the government’s Smart Cities project. “India is a very important market for us and it has been significantly contributing to the company’s growth year-on-year. Indian construction, engineering, manufacturing and media firms have been using Autodesk software for many years for better designing, manufacturing better products and creating stunning visual effects,” said Nair.
In February 2016, the company signed a Memorandum of Understanding (MoU) with the government of Maharashtra for making its software available to micro, small and medium enterprises (MSMEs) in the state. So far, more than 2,000 users and 2,000 SMEs in Maharashtra have taken advantage of this programme. They have started using Autodesk Fusion 360 software, which is a cloud-based platform that helps companies in product development.
“These are the customers that we never sold to in the past. They have come on board in the last six months. It gives us an opportunity to venture into unexplored territory,” said Nair.
The California-headquartered 3D technology firm, also sees huge potential in Indian start-ups. It has been running a programme called Entrepreneur Invite (EI) in which it offers its proprietary software to selected start-ups for free, usually for three years. Maker’s Asylum of Mumbai, Workbench Projects of Bangalore and Pragati Designs, a Chennai based firm among others have participated in this project. “Our focus is on the start-ups that have a social impact with their products and are focused on using design as a differentiator to build better products,” said Nair.
Source: The Financial Express
