Two more interesting bits of information from the Autodesk’s third quarter 2009 earnings call:

Carl Bass, CEO, said right up front that the economy is affecting Autodesk’s customers, but
has a plan to help at least North American customers in the short term. Said Bass, “The
sharp downturn in the global economy … is impacting our customers in various ways. Many
are unable to secure credit financing. Construction and media and entertainment projects of
all sizes are being delayed or cancelled. Lack of credit for small and medium sized
manufacturing firms is making it difficult for them to invest in their businesses. Even large
manufacturers are cutting spending significantly in response to lower end user demand and
their inability to secure financing or issue debt.” Seconds later, he said that Autodesk
offering customers in the United States and Canada “financing consisting of deferred
payment plus 0% interest”, through companies like Key Equipment Finance and others. It’s
interesting that there was no explicit mention of helping Autodesk’s channel partners, who
buy inventory from Autodesk (or a large distributor) and then resell it to the end-consumer.
Autodesk is committed to keeping its channel as intact and healthy as possible so perhaps
providing funding for end-customers was the best solution that could be arrived at with credit
markets as they are right now. Autodesk is, however, sitting on almost $1 billion in cash ….

Bass also said that Autodesk has begun to align its current spending to how it views the
future – in other words, implementing a hiring freeze and reducing discretionary spending. He
also alluded to other possible avenues: “investments become more targeted, divestments
occur, efficiency rises, and resources get realigned. We are already working on many
initiatives, including pricing, bundling, and portfolio management to improve our business and
strengthen the company.”

Possible measures cited in the earnings call included a re-evaluation of the company’s
product portfolio. Said Bass, “80% of our revenue comes from 20% of the products or
something in that neighborhood, so we are looking at what goes on in the other 80% of the
portfolio and how important is that to the ongoing health of the business.”

No one on the call asked the obvious question: a lot of the 80% of products creating revenue
are likely to be 2D or some of the less sophisticated bundling of 3D products: large volume
sales at relatively low dollars/unit. Is that the business Autodesk wants to stay in?