How do I know most Autodesk customers don’t want rental?

In a recent comment, I was asked how I know Autodesk’s move to all-rental is the opposite of what customers want. Have I conducted research? This is an excellent question and deserves a proper answer.

So how do  I know this? Why am I so convinced? There are several independent sources of evidence, one bit of critical thinking and one undeniable proof. They all point in the same direction. First, a bit of evidence.

  • There are many public places on the Internet where this issue has been discussed, including Autodesk’s own discussion groups. The viewpoints expressed everywhere are overwhelmingly against Autodesk’s all-rental plans.
  • There are private places Autodesk customers hang out where I have access, and I receive private emails. Again, the overwhelmingly majority of the viewpoints I see expressed are very strongly against Autodesk’s strategy.
  • There’s a poll right here. How’s it going?

    Autodesk is ending the sale of perpetual licenses. This is:

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  • None of that is very scientific, but Autodesk has  conducted proper research. Among other things, it gathered customer focus groups at AU to determine the mood regarding going all-rental. I know somebody who went to one of those. The customers present at that particular gathering were 100% against.

OK, so you don’t want to accept any of that? Can’t trust the sources? It’s all a bit anecdotal? Fine. How about a bit of critical thinking?

  • Most customers of major Autodesk products are long-term users who would undeniably pay more via rental than perpetual and then have nothing to show for it when they stop paying. What are the chances of most of them wanting  that outcome?

Still not convinced? OK. The most concrete way in which it could be determined whether customers prefer rental would be an experiment in which both options were made available and the market were allowed to decide. An expensive experiment, sure, but impossible to argue with the result.

Autodesk conducted that experiment. Twice. Once quite a few years ago, and again in 2013. Rental was offered alongside perpetual licensing. Rental lost. Twice. It was abandoned as a choice. Twice. The market has spoken. Twice.

Rental for Autodesk products is a handy option for a minority of customers but a non-starter for the majority, given the choice. Autodesk knows the only chance of making rental work in its marketplace is to remove that choice.

11 Comments

  1. Steve, you left out the most important proof:
    numbers provided by Autodesk itself.

    During the last three months before customers faced perpetual-licencing doomsday (July 31), a mere 110,000 switched to subscription, while 2 million did not.

    Irrefutable evidence.

    • To be fair, it wasn’t entirely doomsday. Perpetual license holders didn’t have to do anything. Nobody would expect all perpetual license holders to throw them away and switch to rental because they wanted to pay extra. No, the adoption will be more gradual than that. Whether 110,000 is a good or a bad number is hard to say.

  2. Here’s a comment from a long-time Autodesk watcher and respected industry figure who wishes to remain anonymous:

    Regarding Autodesk’s move to all-rental: I don’t think it’s so much that people hate software rental per se. I think it’s more that they hate getting screwed financially, and risking losing access to the tools they need to get their work done.
     
    If Autodesk provided a compelling guarantee regarding costs, and a cogent plan to deal with legacy tools and data, users might look upon software rental more favorably.
     
    But… long experience has made most users–even unabashed Autodesk fans–wary.
     
    It’s not like there’s a simple answer. Sure, you can look at other vendors, but switching costs can be high, and potential productivity problems can be daunting.

  3. i have used autocad on a daily basis since 2.5 (1986). for the last few years i have taken advantage of the home license to do hobbyist vba programming and develop programs for work, a wonderful customer benefit deal. as i look at retirement though in the next 2-3 years, i am definitely looking at an alternative cad program with vba to download a trial and see if i can switch. it will cost less for one perpetual license than a year of rent. paying the autocad price is not out of the question, but obviously they have used autocad profits to subsidize development of other packages. autodesk needs to unbundle 3Ds max from inventor and autocad too, autocad has gotten better and i do really like it and want to keep it, but the improvements are really not noticeable year over year. it needs to be priced like regular software. not as something where the improvements are coming daily.

  4. Thanks for the perspective Steve. It’s an interesting debate.
    Like any public company, Autodesk is in a tough spot of trying to balance the needs of customers and shareholders. Shareholders prefer rental models – there are a number of case studies out there which show it’s positive for earnings in the long run. This is why you’ll see all software companies heading in that direction.

    At the same time, Autodesk is trying to customers happy. Many customers will enjoy the lower price of entry to use their products, the more frequent updates, the ability to access cloud tools and functionality and the extra flexibility a rental agreement provides. There will of course be those who resist change and want to hang on to their perpetual licenses.

    Time till tell how successful this program is for Autodesk, and other software companies too.

    • It’s positive for earnings in the long run only if customers buy into it. The jury is out.

      All companies? I don’t think so. We’re already seeing Autodesk competitor companies making a point of differentiating themselves by committing to ongoing availability of perpetual licenses. I have a bunch of anecdotes of companies moving away from Autodesk and to those companies.

      Lower price of entry is true, flexibility too in one sense (although forcing customers into rental is the exact opposite of flexibility). More frequent updates will not be happening, at least updates that provide anything useful. Rental encourages taking the money and doing nothing for it except providing the software. Autodesk has been moving that way for some years; providing less and less new functionality with each new release. Having people tied in to what was once called Subscription but is now maintenance removed a large part of the incentive to make a new release much better than the last. With rental, the incentive to improve goes away almost entirely. Access to cloud tools and functionality is independent of the purchase mechanism.

      People resist any change that puts them worse off. This is natural, and it’s why Autodesk is going to be pushing it uphill with this one.

  5. I really don’t care if Autodesk makes us rent, but its never just a cost issue. Now we must deal with their online license admin games and other things they feel entitled to experiment with since the theme of “looking like SAS” is popular.

  6. I’ll never get why the term “more frequent updates” ought to have a positive connotation.
    As a CAD admin in a somewhat secure network area “frequent updates” mean frequent deployment of either unfinished features (because updated later again. Maybe next week) or cockalorum of the vendor (because they promised to).
    Oh, and what about sporadic frequent uninstallments of screwed updates? You know, we are talking about Autodesk.

  7. There is certainly a market for rental, but from a consumer standpoint, it should not be forced on us. Having the choice is real flexibility.

    I have seen a trickle of one-offs headed for the competition, but I’m sure the damage to Autodesk is negligible.

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