Quickie: On Autodesk subscriptions & perpetuals

Sep 4, 2015 | Hot Topics

I’m still working on a longer write-up of Accelerate, Autodesk’s PLM event earlier this week, but need to weigh in on news that I’ve seen a bit mis-characterized: Autodesk yesterday announced that it will no longer offer perpetual/maintenance licenses for most of its Design & Creation Suites and individual products after July 31, 2016. The company had already announced that other desktop software products will move to subscriptions only on January 31, 2016. [There are some LT exceptions, with earlier dates — see here.] This means that new buyers will be able to buy only subscriptions. In a later post, we’ll get into why subscriptions may not be as bad as you think (and they’re, honestly, a very good alternative for many businesses).

Current customers who stay up-to-date with maintenance payments will continue to get whatever their contracts say they’ll get — there’s no change. Remember that your purchase agreement, current customers, is legally binding and Autodesk cannot stop supporting you as long as you payments are made on schedule, so stop with the panic. Current customers: If you want to hold on to your perpetual/maintenance seats, get and stay current on your maintenance payments by the end of next January/July or lose access to support and the latest releases (the typical result of lapsed maintenance). See here for details. [If your agreement doesn’t contain a fixed price for the maintenance, you may want to contact your sales rep to understand if/how that can change.] If it were me, I’d take a hard look at my expected needs for the next couple of years and create a blend of perpetual (that I keep paying maintenance on) and subscriptions that I’d add as needed. Maybe mix lower and higher-end suites or add cloud units for simulation and rendering. But that’s me.

New customers need to choose, too. If you like the lower price of entry, need to add/subtract licenses over the years, can charge licenses to your clients’ projects, prefer a single consistent payment for budgeting, like the sweeteners Autodesk puts into subscriptions — subs are for you. If you’re able to pay the upfront fee, want a consistent base of licenses (that you can add to as needed with subscriptions), perpetual may be right for you. Again, I’d encourage you to look at a mix — perpetuals are still cheaper if you plan to hold on to the product for longer than 3ish years.

In a perfect world, Autodesk would continue to offer perpetuals until there was no more demand for them, because a lot of companies tell me that they like the ability to have a consistent base that they can add to as needed. They want the flexibility to add supplemental licenses for summer interns or a work crunch and then letting those go when no longer needed. For them, the stability of perpetual and the flexibility of subscriptions is a perfect blend. But I understand why Autodesk wants the transition to move faster. There’s too much confusion in the market because Autodesk is offering so many ways to buy right now, with individual products and suites, desktop and cloud, perpetual and subscription. Too, Autodesk and its channel need to work through the cashflow implications of lower upfront payment, which means lowering the cost of selling.

In many ways, it’s like ripping off a bandaid. Whether you do it slowly or quickly, it’s unpleasant, so get it over with. The problem, of course, is that no one likes change. Especially one that’s perceived to be only to the benefit of one party –in this case, the big, bad corporate Autodesk– at the expense of the other –here, small businesses and makers. Autodesk and its investors talking about increasing ARPU (acronym that stands for Average Revenue Per User) makes it sound like it’s only about money. Yes, it’s about money: after all, Autodesk employs people who must be paid and has buildings that need to have the lights on. But it’s also about technological evolution. Autodesk  believes that subscriptions are essential for a “work anywhere, anytime, on any device” world.  Some of that is cloud technology, some of it is desktop-based, but it’s all about collaboration, expandable compute resources, big data and similar trends, that Autodesk says can better be delivered to its customers as software as a service. Will no longer selling new perpetuals cost Autodesk some customers? Perhaps, especially as buyers on very old versions check their alternatives and paying anything is more than they’re used to. But it’s also true that new customers seem to prefer the subs because of their flexibility and lower cost of entry.

More on this later — This post has gotten away from me! I really just wanted to make it 100% clear: if you have a perpetual license and continue to pay maintenance, NOTHING CHANGES on February/August 1, 2016 unless you want it to.