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With the End of Upgrades in View, Autodesk’s Model Evolves Slowly

Maintenance Subscription Purchases Get a Boost Ahead of January Update Deadline

Autodesk is continuing to move its software model away from perpetual licensing and toward desktop subscriptions, officials said as they announced quarterly earnings yesterday.

Last month, Autodesk had warned customers that its traditional software upgrade program, which allows users with perpetual licenses to upgrade their software to new versions at deep discounts, would be terminated at the end of January 2015. The move has driven more users to purchase maintenance subscriptions, which keep them up-to-date with all software updates, before time runs out, according to Autodesk CEO Carl Bass. (Autodesk's maintenance subscriptions offer support and keep users up-to-date on the perpetual software licenses they already own; the company's desktop subscriptions offer access to software on a pay-as-you-go basis.)

News on the elimination of perpetual licenses altogether may be coming later this year. "We've been look at it and considering it seriously and we'll talk again a little bit more about this in October," Bass said in response to questions during a conference call with analysts yesterday. "Right now, we have a fair amount of transition going on in the business with the elimination of the upgrades, and that is certainly spurring people to action. But as we move into next year we'll have more to say."

Autodesk's media and entertainment (M&E) products, led by Maya and 3ds Max, remain a very small part of the company's overall business, amounting to total revenues of just 6.9% in the quarter ending July 31, down from 7.7% in the same period last year. Bass said the ongoing challenge mainly has to do with the fact that users of its creative finishing product line (Flame, Flare, Lustre and Smoke) no longer buy hardware from Autodesk.

"The software part of the [M&E] business is good and healthy, and we like all the dynamics," he said. "What we see in the [creative finishing] part? Less happy with it. [But] that's been going on for the last half-dozen years in creative finishing." In prepared remarks, Autodesk also said it is planning to include M&E products in its software suites for other industries.

Bass also said Autodesk has been taking some cues from consumer markets to develop ideas for professional products. For example, he said, Autodesk is designing and manufacturing a 3D printer. "That's going really well," he said. "I'm sure we will be showing you the 3D printer in October. [Consumers have] been a great leading indicator — much more willing to adopt cloud and mobile stuff ahead of the enterprise."

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