Change is good

09 October 2009

Every decade or so a new company arrives on the design scene that reshapes the landscape. In their time, Autodesk, PTC, and SolidWorks all changed the market. Martyn Day wonders if the time is right for the next disruptive company

Ihave been watching a lot of documentaries about Charles Darwin lately and the development of evolution theory. All species evolve but, like the dinosaurs, some aren’t always guaranteed to adapt in time to changing climate, habitat or ecosystem. This change can be gradual, over many millennia, or arrive like a comet and cause a mass extinction-level event.

There have been a number of interesting books which try to tie business theory to what we know of evolution but a recent conversation with Carl Bass, Chief Executive Officer (CEO) of Autodesk really highlighted that there may just be something to this connection. My interview was about the changes in development at Autodesk, going from AutoCAD to the amazing number of products the company now has. Walking down memory-lane to former CEO, Carol Bartz and the fateful AutoCAD R13, the first ‘real’ Windows release of AutoCAD, Bass explained how for software firms there are distinct danger areas, namely technology transition points.

For Autodesk, R13 was a close run thing as it was making a technology transition from DOS to Windows and with probably the exception of Microsoft, very few companies that were industry-leaders on DOS managed to remain industry leaders on Windows. This got me to thinking of all the DOS applications I used to use - no, I mean my parents used to use. OK, I am that old. It really rang true that few of the software firms that ‘owned’ the DOS business market survived that transition (WordStar anyone?).

It might not look like it but there is a technology battle about to happen out there in CAD land. The software firms are already researching and developing their SAAS solutions

Thinking of more CAD-related companies, PTC made a big impact when CAD moved from UNIX servers to UNIX workstations. Parametric Technology came up with a disruptive technology and ate the old guard in its wake. Similarly SolidWorks arrived when the parametric mechanical market went from UNIX to Windows, this time eating significant portions of PTC, as it failed to fully contemplate the impact of Windows on the desktop market. PTC eventually recovered but now has had to share the market space it once dominated.

There is undoubtedly a correlation between platform changes and the rise of new exciting companies while the dinosaur software houses always seem to fail to react in time. For Autodesk, the stakes of moving from DOS to Windows were very high and despite an absolute shocker of a release, no other company was able to steal its vital 2D CAD life-blood. It was a very risky time to stumble and fall.

The move to saas

As I have written before, Autodesk has been releasing a number of technology demonstrators on its Labs website ( Last week, it introduced Project Twitch, which offers web-based versions of AutoCAD, Revit, Inventor and Maya. The current link only supports 50 simultaneous sessions and you have to be within 1,000 miles of San Francisco but this marks the start of cloud-based CAD.
Eventually all software will be hosted, nothing will need to be installed, the application will be a service and all the raw power will be at server farms in remote locations. All users will need is a fast Internet connection, a screen and a basic low-power local machine. This is not science fiction; this is what all the software companies are preparing for.
When talking about the impact of cloud-computing, Bass said, “There’s no doubt that the next transition is from Windows to a cloud-based computing environment. And, the two things that makes market leaders vulnerable are inflection points in the technology and changes to the
business model.”

Autodesk probably knows more than most about what it’s like to be attacked by competitors, with many attempts at cracking the AutoCAD business, all of which have ended in failure, despite competing against products that are offering their software for free vs AutoCAD’s £2,500 plus subscription. Here, Bass explained, “If you want to attack an industry-leading company when the business model and technology are stable, it’s a very difficult thing. A frontal attack offering the same, a little bit cheaper, a little bit faster, most often has proven to be a distinct failure.”

So, frontal assaults and discounts don’t work on an incumbent market leader, but transition points can level the battlefield. The threat posed by cloud-computing is being taken very seriously at Autodesk. The extensive distribution and channel networks Autodesk has managed to create have performed awesomely for the last 20 odd years will count for nothing as the Internet bypasses all of that. A software company that has a great product, delivered over the web, for a low cost, could, in theory, out-compete a $2 billion in revenue a year design giant.

For firms like Dassault, CEO Bernard Charles told me earlier this year that cloud-based CAD is strategically important for his company and that it’s a race to be the first CAD company to be there and do it right. Dassault wants to get into the AEC (Architecture, Engineering, Construction) market but doesn’t have a dealer channel. An Internet delivery strategy would bypass this handicap and go direct to architects.


It might not look like it but there is a technology battle about to happen out there in CAD land. The software firms are researching and developing their cloud-delivery ‘war machines’, which will enable them to offer CAD in a Software as a Service (SaaS) manner - not only to get ahead of their competitors but also for their own survival.

Martyn Day is Consulting Editor of DEVELOP3D. He lies awake at night wondering what the inevitable transition to SaaS will mean for traditional CAD dealers  

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