"Disaster in progress – Autodesk’s all-rental plans..."

[Hirazi Blue]

Found this in a CGTalk-thread...
Disaster in progress – Autodesk’s all-rental plans are failing

[Rez007]

I saw that too, but I wouldn't look into it that much yet, as that is most likely expected. As you can see, 2017 Q1 is going to be far less of a drop. I expect most people (whom are not on classic Maintenance Subscription) are going to use their latest perpetual version as long as possible. Once they start seeing that they are missing out on newer versions, then the rental curve will most likely start to change.

Example, I do not know the reason for Maya 2017 not being shown/released at NAB, but if there are some huge advancements and it becomes a big release, then that might sway more people to rent, and so-forth with every release year thereafter.

[FXDude]

I expect most people (whom are not on classic Maintenance Subscription) are going to use their latest perpetual version as long as possible.

Indeed why do you think that is?

Renting can be a bit like leasing except with Leasing,
the larger part (the principal) of payments goes to eventual ownership (of software or hardware).

And the rest is interest.
Sometimes fairly high interest like 20-30% of the total, so 3600$ can end up being 4500, but it can still be worth it to break-up a larger sum into more digestible peices,

Then you can stay with it for a while, and perhaps upgrade if new features *at-all* concern what you are doing, or wait longer for things to become more stable, or for certain plugins to be recompiled ... or wish to stay with a version for the length of a project (sometimes years).

But the choice remains up to the customer if upgrading a douzen or more stations is worth it or not,
(typically 1 or 2 times out of 3 -not-, also as protection for arbitrary decisions to increase (or double) prices/revenues)

But even if one would get every single (traditional) upgrade as they would come out (or be on subs), it would still come to just about half of what renting-all-the-time comes to.


And with Renting

Payments can also be more digestible (compared to a one time bigger, but ultimately much less significant total up-front cost),

except that :: 0% of payments (in this case currently roughly equal to spreading out payments for 2 years including interest)
goes to eventually having -something-
(normally being the moment when payments stop because you have payed enough for what you got)
or can be equated to a pretty difficult to take 100% interest.

You can make payments for years on end, the entirety of the sum payed would exclusively be for usage rights during that time, and what you would then have is -nothing-.


Renting which can be convenient when ramping up for a short period, when the benefit of no commitment can take precedence over the extra cost of renting which is consistently more costly, especially for short, but also for longer term rental options (2-3 years?) and which also then nullifies any no-comitment advantage.

Nevertheless, if indeed #ADSK revenues eventually go up, it would be entirely proportional to the detriment (proportionatly plummeting value) for anyone (everyone) that would then be, for lack of a better word, -stuck- with whatever is made to be available as possible options (holding practically all available professional options)

[Rez007]

@FXDude,

I fully understand what you are saying and I pretty much have the same viewpoint, I was just referencing the first post (link) that people might think that the rental program is bad right now, but these transitions take time to be profitable - not for us - but for Autodesk. Obviously, if this was an awesome program, it would be going "gangbusters" all-around. I am just saying, that I think it will take some years yet to actually see if this works out for Autodesk, or if they need to reverse course. There are many factors that led us up to this point of rental, and right now companies are looking for a consistent and strong userbase, hence rental. Apple, as well, is expanding subscriptions (rental) into games too...ouch!

Me personally, I am just going to stay with the classics subs (Maintenance). If that ends at some point, then I will probably run "Maya with Softimage" as long as I can, while keeping an eye out for what to do next. The biggest hindrance, is not being able to access projects if you stop paying rental, and of course the increase in cost. That is why I plan to keep my perpetual license as long as possible.

[NNois]

Why would it be a disaster for us ?

Not sure this would be a disaster too for people working there because of hypothetical lay-off, I'm sure there's plenty of other more hyped place to work with than working with a spaghetti of old code.

But, this would be a loss of money for shareholders true.

[Boiler]

"In addition to terrific subscription growth for the quarter, we experienced strong growth in new model ARR and deferred revenue. Revenue decreased, as expected, while recurring revenue jumped significantly to 70 percent of total revenue."

First Quarter Fiscal 2017

Total subscriptions increased 132,000 from the fourth quarter of fiscal 2016 to 2.71 million at the end of the first quarter. New model subscriptions increased 140,000 from the fourth quarter of fiscal 2016 to 567,000.
Total annualized recurring revenue (ARR) was $1.44 billion, an increase of 9 percent compared to the first quarter last year as reported, and 12 percent on a constant currency basis. New model ARR was $308 million and increased 71 percent compared to the first quarter last year as reported, and 76 percent on a constant currency basis.
Deferred revenue increased 32 percent to $1.52 billion, compared to $1.15 billion in the first quarter last year.
Revenue was $512 million, a decrease of 21 percent compared to the first quarter last year as reported, and 17 percent on a constant currency basis. During Autodesk's business model transition, revenue is negatively impacted as more revenue is recognized ratably rather than up front and as new offerings generally have a lower initial purchase price.
Total GAAP spend (cost of revenue plus operating expenses) was $667 million, an increase of 7 percent compared to the first quarter last year. A charge of $52 million for a previously announced restructuring was recorded in the first quarter of fiscal 2017.

http://news.autodesk.com/press-release/ ... iption-add

[Bullit]

Funny how they talk about "recurring revenue" as if it is guaranteed that will be recurring.

Reading an financial report is like reading the newspaper.