Autodesk

Disrupting itself by switching to a software-as-a-service (SaaS) model and by providing mobile applications, leading to higher revenues and enhanced profit margins

Key facts

• Autodesk¹ is a leader in professional 3D-design software and consumer applications for architecture in the engineering, construction, manufacturing, media and entertainment industries.
• Founded in 1982, Autodesk is headquartered in San Rafael, California. It generates over $2.5 billion in revenues ($269 million EBITDA) and has over 8,823 employees.

Uniqueness

• Autodesk’s best-known product line is AutoCAD, a 2D and 3D computer-aided design (CAD) software application allowing architects and other users to create virtual 3D models.
• Autodesk has 10 million users and is aiming to generate 70% of their revenues from SaaS by 2018.
• From 1990 onwards, Autodesk has increasingly diversified its products into adjacent industry segments.

Value

• As of 2014, 45% of Autodesk’s revenues are generated from 1.9 million customers using the company’s SaaS solutions.
• In FY15 operating margin was recently estimated at 14%-16%; equity analysts expect Autodesk to further enhance margins to more than 30% by 2018.
• Autodesk are poised to benefit from the upcoming 3D-printing trend where SaaS is an increasingly significant component.

Approach

• In 2011 Autodesk realized the need to shift their business based on a perpetual licensing model with diminishing profits towards an internet software as a service (SaaS) subscription model.
• Autodesk designed SaaS-platform products that are easily deployable and well suited to attacking incumbents in the industry.
• Customers are being motivated to make the switch to the cloud through increased product features and ubiquitous availability of the tools across several devices and operating systems.

Footnote
Sources: Marketwatch; Seekingalpha; Autodesk; WEF/Accenture Analysis