Autodesk confirms outrageous upgrade price increase

As I indicated in May, Autodesk will be increasing the cost of upgrades to 70% of the full retail cost of a new license. This renders it totally pointless upgrading Autodesk software at all, which is obviously Autodesk’s intention. This change probably won’t affect many people, as those who have chosen to stick with Autodesk despite everything have already been effectively forced onto Subscription. Anyway, here’s the confirmation from Autodesk: In early 2013 Autodesk will simplify the current upgrade pricing model, which may affect pricing and/or eligibility for upgrades.  Autodesk is providing advance notice to help ease the transition and ensure that customers have enough time to plan and budget for any impact to your organization.  As part of this change, Autodesk will be simplifying upgrades into a single offering available for licenses that are 1-6 versions old at a discount of 30% off new license SRP*.  Under the new upgrade program, product versions 2007-2012 are eligible for upgrade pricing and product versions older than 2007 will no longer be eligible for upgrade pricing on our standard pricelists. Our records show you may have one or more licenses that may be impacted by these changes. Autodesk is making this policy change to better align with the needs and buying behaviors of our customers.  Many Autodesk customers choose to use Autodesk Subscription as their preferred method of maintaining their Autodesk Software. That last paragraph is just embarrassing. It steps over the line that separates spin from total bullshit. The person who wrote it must have been either cringing (if they have any kind of ethical values) or laughing (if they don’t). The time of Autodesk being straight with its customers is now so far in the past that few customers will be able to remember those days. Those of us who do…

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Callan Carpenter interview 5 – the 12 month cycle

This 5th post concludes the Callan Carpenter interview series. For the record, this interview was done in real time over the phone, with no prior notice of the questions. SJ: The 12-month cycle that you have for most of your software has come under some criticism from all sorts of people, especially me. Once you have your customer base practically all on Subscription, what’s the incentive for the 12-month cycle to persist? CC: In what way have you criticised the 12 month cycle? SJ: In that it damages the product. In that there’s not enough time to release a properly developed product within that 12-month cycle. This is an observation that many people have made going back many years. That’s the basis of the criticism; not that, “Oh no, you’re giving me more software”. Well, there are people who complain about that but I don’t think that’s a valid criticism. I think the valid criticism is that it damages the product. A poll that I ran on my blog asked that question: is the 12-month cycle damaging the product? The answer was a very emphatic yes from the readers of my blog. I know that’s not a scientific survey but it fits in with other viewpoints I’ve seen expressed in various places. CC: The question was, do we intend to continue to do that? SJ: Yes. Once you have effectively have your customers on the Subscription model, so that you’re no longer internally competing with the upgrade model, do you really have to have a 12-month release cycle? CC: Well, I think it’s a very interesting and valid question, do we need to have a 12-month upgrade cycle? I know there are customers who simply cannot absorb technology at that rate. But it’s a bit of a two-edged sword, in…

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Callan Carpenter interview 4 – enhancing the program

Part 4 of 5 in this series. SJ: There is always the fear that once you have all of your customer base on Subscription, you’re not going to need to offer those benefits any more. Can you assure people that that’s not going to be the case, that you are going to keep being “nice” to your customers? CC: Absolutely. I think my team and I spend as much time and brain energy trying to figure out how to enhance the program as anything else. Our goal is to make Subscription a compelling value proposition; to make it not only cost-effective but valuable in other ways. An example would be the Advantage Pack program. We had a history of Subscription including extensions and other little technology bonuses for subscribers. But last year, we said we’re going to do something different with that. One of the problems with our historical technical Extensions program is that it was optional for product line managers to either participate or not. It was optional for product line managers to localise those Extensions in languages other than English. It was optional to make those Extensions incremental install as opposed to requiring a full reinstallation of a product. So last year, we turned a lot of our product development upside down and produced the Advantage Pack with a whole new set of requirements. A product had to be localised, it had to be incremental install, and the top 26 or 27 product lines all had to participate in delivering that value. We saw the impact in the form of a 150% increase in the downloads of that Advantage Pack. That’s an example of trying to improve the value, and you’re going to see some additional fairly significant moves on our part on the Advantage Pack this year…

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Callan Carpenter interview 3 – the cost of complexity

Part 3 of 5 in this series. SJ: In one of my blog posts, I was pretty cynical about one of the phrases used in the press release: “the streamlining of upgrade pricing based on feedback from customers and resellers”. Was I wrong to be cynical about that? Did your customers really ask for upgrade prices to be increased to some nice round number? CC: What our customers have asked for is simplified purchasing. We have a very complex price book and it leads to thousands of prices items, maybe tens of thousands when you have all the permutations across all the different geographies in which we sell software. A lot of that complexity came from having multiple-step upgrades, multiple-step crossgrades. There is a cost to maintaining that kind of a system. So our resellers certainly were asking for simplification and streamlining explicitly. Our customers were asking to find ways to make it easier to do business with Autodesk; can it be less expensive? One of the costs of doing business is maintaining a very complex pricing scheme as we have in the past. So while we may not have a customer say, “Gosh, I wish you would simplify your upgrade pricing” explicitly, it is implicit in trying to offer an easier path to buying and less cost in the long run because we’re not maintaining a very complex system that only serves a very small percentage of our customer base. SJ: So there’s a real cost associated with this. Can you put a number on that as a percentage of the cost of the upgrade? Is it 1%? 10%? Is a big amount that customers need to be worried about? CC: You know, I’ve never tried to put it as a percentage of the cost of an upgrade and…

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Callan Carpenter interview 2 – upgrades a tiny minority

Part 2 of 5 in this series. SJ: Is there anything specific you want to say about what I have written in my blog? CC: There are a number of things we can do to put Subscription questions and Simplified Upgrade Pricing into context. I think the first thing we need to recognise is that there is a very small fraction of our revenue that comes from upgrades at this point in time. For the last 8 years or so, our customers have fairly well self-selected to either prefer to be on Subscription and have the latest version and technology available to them, or to not do that, in which case they tend to upgrade 3 years or more after the current release. We’re down to very low single digits of customers who upgrade, and of those only half of those upgrade 1 or 2 years back. So we’re talking about approximately 1.5% of our revenue that comes from customers upgrading 1 and 2 versions back. And so I think there’s clearly been a natural selection, a natural fallout over time of customers choosing; do I prefer to be on Subscription or do I prefer to pay for an upgrade? If you look at the real impact of upgrade pricing, the real impact is the customers who prefer to upgrade from 1 or 2 versions back, that’s a very very small percentage of our business. For those who are 3 versions back or more, there’s really no change at all. For subscribers, which is the majority of the customer base, there is no change at all either. I just wanted to start by kind of putting that in perspective. I think the other thing we should look at is that the history of the Subscription program is one of actually…

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Callan Carpenter interview 1 – Autodesk and social media

A couple of weeks ago, Angela Simoes from the Autodesk Corporate PR team invited me to interview Callan Carpenter, Autodesk’s Vice President of Global Subscription and Support. Callan is responsible for the sales, marketing operations and product support associated with Subscription. He is also Vice President in charge of Jim Quanci’s Autodesk Developer Network. This morning, we had a very extensive discussion about Subscription and other topics that I intend to publish in several parts over the next few days. Deelip has already published a Callan interview, but mine is quite different. In this post, I will let Callan introduce himself and then move into some questions about social media that I asked at the end of the interview. In this post, both Callan Carpenter (CC) and Angela Simoes (AS) responded to my questions. SJ: Callan, can you give me some background on yourself? CC: I’ve been at Autodesk since November 2008. Prior to that, I spent 20-odd years in the semiconductor and semiconductor-CAD software business: technologies in many ways analogous to what we have for our manufacturing, civil and media/entertainment markets here. I was focused on semiconductor design, manufacturing, electrical properties and so forth. I’m an electrical engineer by training. I’ve spent about half of my time in startups and about half in big companies. Everything from designing silicon to sales and marketing to engineering to you-name-it. SJ: It’s kind of unusual for me as a mere blogger to be approached by a Vice President, but I’ve had this happen twice in the past couple of weeks. Is there a move within Autodesk to engage more with bloggers and social media? CC: We’re definitely more conscious of social media than we have been historically. We are becoming more cognisant of the power of social media, whether it’s tweets or…

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