There’s a shift going on in the 3D CAD industry. The shift from perpetual license pricing to monthly subscription pricing. Some will bring up those who have tried it before, the benefits and why it needs to happen faster. Suddenly however, it’s nearly 2016, and pay-as-you-go pricing models have been around a few years. We’ve moved from companies who are trying it out to companies who are shifting completely to monthly pricing. So, let’s have a look at where subscription pricing is and where it may be going.
Autodesk began offering subscription pricing in September 2013, then announced last February that they will go subscription-only February 2016. The majority of their desktop software is already available as pay-as-you-go pricing. Notice that Fusion 360 is outside of that. Fusion 360 has its own subscription model and pricing plan. In May, they quietly simplified Fusion 360 pricing, changing from a tiered subscription to combining products and offering a single monthly/yearly subscription.
Backing up though, let’s look at what kicked off the feasibility of subscription pricing for professional multi-product software portfolios. In May 2013, Adobe rolled ALL of their software into a single subscription price. It was simple, a no-brainer. All products for a single price. Even if customers didn’t use all the products, the possibility was there. Still, Adobe changed it up. They now have different plans based on use, but their primary plan remains the $50/mth subscription for access to all of their apps.
Looking back at Autodesk, it seems they’re attempting a similar approach. Thick in the transition to subscription pricing by Febraury, Thursday, August 27th, Autodesk posted a loss. It was due to a large tax bill they got slapped with though, wrapping up the last three years of deferred tax assets. They’re now looking at a drop in revenue, even though subscriptions are going up. Is subscription pricing going to work for Autodesk? Well, the same revenue drop happened to Adobe a year after they went subscription only. Adobe has turned that around though, posting record subscriptions and revenue this year.
The contrast between the two is interesting, as Adobe turns to offering more plans and Autodesk transitions to simplifying the complexities of a large product portfolio within a subscription pricing model.
In the meantime, Onshape, the web-based CAD software, is taking a completely different approach, using a freemium model with a $100/mth Pro level subscription.
Where is Solid Edge in all of this? I hadn’t realized how long it has been, but Siemens PLM has had Solid Edge subscriptions available since August 2013–A true monthly subscription–kicked off as a pricing model test in 2012 with Local Motors. They seem to be rolling right along now, with a base version (design and drafting) that runs $130/mth up to a premium version at $350/mth. You can even use it without being connected online.
And SolidWorks? Well, we know Dassault Systemes is changing their perpetual license subscription policy. Many have asked if monthly pricing will ever be available. After a few SolidWorks User Group meetings in early 2015 where CEO Gian Paolo Bassi presented, there are speculations that SolidWorks will announce subscription pricing in 2016. With the new SolidWorks 3DEXPERIENCE products, I have trouble seeing how this plays out, unless they use it as a way to push people from SolidWorks to 3DEXPERIENCE platform products and position it as such to provide more tools at a price that bests what’s possible with the competition, including SolidWorks.
With any of these companies, it’s a delicate balance between providing value in the price and sustaining revenue. They’ve got to keep that revenue increasing while not upsetting customers. Adobe has, more or less, been the poster child. Years into monthly pricing experiments, the CAD software companies are preparing for monthly subs to be the primary way to use their software. Are you ready?
Update: Sept 3, 2015
To sum up, perpetual license sales for stand-alone products stop February 1, 2016, and perpetual license sales for Autodesk Suites end July 31, 2016. Also simplified subscription options are coming some time next year. Existing Perpetual licenses and maintenance contracts will be respected. Excerpts below.
“Today Autodesk, Inc. announced that after July 31, 2016, new commercial licenses of most Autodesk Design & Creation Suites and individual products will be available by subscription only. When this takes effect, the company will provide new, simplified subscription options so customers can access multiple products and share licenses as they do today — while gaining the simplicity, accessibility, and flexibility of subscription.”
“Earlier this year, Autodesk communicated that it will stop selling perpetual licenses of most individual products after January 31, 2016, with new licenses for these products available as subscriptions. Transitioning the remaining majority of Autodesk’s product portfolio — including Autodesk Design & Creation Suites — to an entirely subscription-based offering represents the next step in this shift.”
Those who purchase a perpetual license of Autodesk Design & Creation Suites and affected products prior to July 31, 2016, will continue to own and have full usage rights for those licenses, and customers on Maintenance for those perpetual licenses will continue to receive corresponding benefits for as long as they continue to renew their Maintenance.