Autodesk hikes maintenance prices to sell subscriptions

In a statement issued to customers. Autodesk has declared its intention to being a subscription only company.

The statement infers a general direction towards subscription rather than a specific cut-off date, but it is clear that Autodesk is keen to transition customers across to the new recurring revenue model.

Autodesk state:

“We believe that subscribing is the best way for you to get the greatest value from our tools and technologies”

… and then outlines a series of benefits that could just as easily be utilised with perpetual software!

Let’s not beat about the bush, subscription is good for Autodesk and they’ve done a pretty flimsy job of making it look like a compelling offer for customers. Recurring subscription revenue, whereby customers have to keep on paying for software regardless, is very profitable.

Just look at how Adobe’s share price has soared since they transitioned to subscription only [Image below]. No more having to crank out new product features and sell upgrades. Shareholders just love predictable subscription revenue.

Tracking Adobe’s share price following the move to subscription. Milestone A – Adobe announce Creative Cloud subscription (October 2011), Milestone B – Adobe announce products only available via subscription. Image from Google Finance, NASDAQ: ADBE

To pressure customers into making the shift early, Autodesk is offering 60% off their subscription plan. How does paying 40% of something you already own make a good deal?

In addition, maintenance prices are being increased (by 5%, 10% and 20% in 2017, 2018, and 2019 respectively) and multi-year renewals to lock in prices are not available. So as with Adobe, it looks like it’s subscription or bust for Autodesk customers.

Questions to ask:

• Is it strategic that we stay with Autodesk – will we gain sufficient value from a subscription?
• Do you really need Autodesk maintenance?
• Do you really need Autodesk at all?
• Are there cheaper alternatives?

See the full letter below.

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Update

Update 10th March – Some ITAM Readers have said subscriptions from Autodesk present a good opportunity to roll up old versions and consolidate. See trail below: