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A good plan, executed now, is better than a perfect plan executed
--George S. Patton
Here is the kind of strategy I think a reinvigorated, aggressive,
Autodesk should be unleashing on the industry. I have plotted this
strategy based on what I know Autodesk can accomplish, not
constrained by what Autodesk has convinced itself is ``realistic.'' My
plan combines short-term, remedial steps aimed at reducing risks
created by our slow progress in recent years, repositioning of
existing products to better fit today's market, and development of new
products to close gaps which endanger our competitive position.
These recommendations are a starting point, not a complete prescription
for turning Autodesk around; they are intended to highlight the extent
that Autodesk truly controls its destiny and to suggest other similar
moves to consolidate and expand our market position.
None of these proposals would survive scrutiny based on the first
third of the criteria I call the Stainless Steel Web; implementing any
of them (or indeed, doing anything at all) requires, as a
prerequisite, the will to act. And that is the hardest part of the
whole scenario; the rest are all things we know how to do and have
If we are to redirect our products and treat the market as something we
control rather than react to, we will need not only direction from
senior management but close day to day line management at the product
level. Our products are too important not to have a single individual
who can speak for them and promote them both within the company and
- PM1: Appoint a strong product manager for every product.
Appoint or recruit a product manager for AutoCAD, and for every other
product in Autodesk's line. That person should report to the
President, and will be given essentially complete discretion over the
development, marketing, and sales resources for the product,
constrained only by the budget allocated to that product.
- PM2: Implement product-level profit and loss accounting.
Structure our internal accounting so it becomes possible to monitor
the costs incurred and revenue generated by product, allowing us to
track the contribution of each product to our overall goals.
- PM3: Integrate development and promotion budgeting.
Undertake no new product development efforts without a comprehensive
plan, adopted in advance, covering both the development phase, the
marketing roll-out, and the first two years of post-launch development
and marketing support. Autodesk must never again abandon a product
developed at great cost; doing so squanders the morale of developers
as well as the company's cash.
By ``product manager'' I mean an individual with line profit and
loss responsibility for the product; a person delegated the authority
to decide what goes in a product and what does not, when releases are
to be made and what they will contain, and who bears the responsibility
for achieving the schedules associated with that product. The current
function called ``product management'' would remain within
whatever department it best fit.
I'm concerned about the health of our dealers' businesses, and about
the degree to which Autodesk relies upon them as our only channel of
distribution. Still, I continue to believe that we should do everything we
can to strengthen our dealer channel, and should abandon it only if
its collapse imperiled Autodesk's survival. Autodesk and our dealers
depend on one another, yet the nature of our businesses are very
different. When our dealers are in trouble, it is incumbent upon us
to look beyond the obvious in seeking ways to help them. Here are two
examples of ways Autodesk could help our dealers survive.
- DE1: Provide dealer inventory on consignment. Autodesk is
cash-rich; our dealers are starved for capital. Yet Autodesk requires
its dealers to tie up a substantial amount of their working capital
keeping copies of AutoCAD in stock. In addition, dealers must
carefully estimate inventory levels to ensure they are able to deliver
our products without waiting to receive new stock from Autodesk. We
could drastically reduce the capital our dealers tie up in inventory
by moving to a consignment stocking policy. Any dealer in good
standing, not on credit hold, would be able to stock a quantity of
AutoCAD equal to his average monthly sales without paying Autodesk in
advance. As each copy was sold he would report its serial number to
Autodesk and a Net 30 invoice would be generated for it. As long
as the dealer collected from his customer before the invoice came due,
he would have no capital tied up in flooring inventory of AutoCAD.
Spare me a recitation of the ten or fifteen reasons we could never
adopt such a policy. Yes, you'd have to explain it to the analysts,
live with greater uncertainty, and trust the serial number tracking
mechanism to prevent cheating. But isn't this how a company with
$140 million in the bank should behave when its cash-poor dealers are
- DE2: Consider reducing the price of AutoCAD.
Pressure from dealers is often cited to justify increases in the
retail price of AutoCAD. But it may well be that lowering
AutoCAD's price is the best way to help our dealers survive.
Autodesk has, over the last several releases of AutoCAD, continued to
raise the suggested retail price and has therefore increased the price
dealers pay for AutoCAD since this is a constant fraction of
the retail price. Evidence suggests, however, that the actual price
customers pay when they buy AutoCAD from dealers has increased,
if at all, much more slowly than Autodesk's posted list price. This
has resulted in a squeeze, where the AutoCAD dealer makes less and
less on each copy of AutoCAD he sells, while being forced to bear
ever-increasing costs to maintain an inventory of the product on the
For years, many successful AutoCAD dealers have said that the bulk of
their profits come primarily from sales of computers and peripherals
associated with AutoCAD, not the software itself. If this is the
case, a primary reason our dealers are encountering difficulties now
is that the margins on their hardware sales are falling, squeezing the
segment of their business which accounted for most of their earnings.
If we were to reduce the price of AutoCAD and that resulted in
increased retail volume, would that not benefit the dealers? If the
majority of our dealers derive more revenue from hardware and services
sold with AutoCAD than from the software, increasing the unit volume
of AutoCAD would actually result in higher sales and earnings, since
increased hardware sales would more than compensate for the lost
revenue from a lower price for AutoCAD. There's no question that
cutting the AutoCAD price would result in a short-term hit to
Autodesk's sales and earnings. But what is the net present value of
preserving the channel which has accounted for essentially all our
domestic sales of AutoCAD since 1982?
This is a case where the ``safe decision'' is to do nothing, but
where inaction may accelerate the collapse of our dealers. There
are alternatives to a simple price cut; we could create
a ``2D-only AutoCAD'' and price it at, say, $1895. Or, we could
introduce the 286 version of Release 11 at a lower price, for example,
$2195 (this would require a modification of recommendation
AC1 below--I trust you can see the obvious way to reconcile these
In the early days of Autodesk, lacking any marketing budget
whatsoever, we found a way to gain influence without spending
anything more then the cost of goods in our products. Sacrificing
such opportunities now in a quest for illusory short term sales is folly,
especially when marketing budgets continue to be tight.
- MS1: Free product for ``opinion leaders.''
A small number of individuals exert great influence in our
industry. These columnists, educators, editors, consultants, and
analysts form the opinions which echo throughout the market. In the
early days of building the market for AutoCAD, we sought to make
each and every one of these individuals familiar with AutoCAD, even if
it required retaining them as consultants, flying them to Sausalito,
and asking them for their view of the industry following, of course,
a half-day indoctrination in our product line. But usually, a free
``evaluation'' copy of AutoCAD was all it took to get their
Now, I discover, Autodesk has become loath to provide free copies of
our new products to influential people in the industry. I presume
this is a misdirected attempt to boost sales instead of an urge to
self-destruction, but the results are indistinguishable. When the
Education department was created at Autodesk, Mike Ford gave it this
charter, ``Extract as much money as you can, but never lose a sale.''
Seeking revenue in the short term ignores the multiplier effect of
having a class taught using your product, having a book written
about it, or having it be the object around which a curriculum is
developed. These benefits follow only when those who influence
opinion get an opportunity to play with a product, and they're
unlikely to buy every product that comes along to see which is
worth their time. Providing free products to opinion leaders is a way
in which software companies can create market presence comparable to
the list price of their products, while incurring a cost equal only to
the raw materials.
A $4000 list price product shouldn't look stingy. We
should take whatever immediate steps are possible to make the purchaser
of AutoCAD feel he is being treated as the elite customer he is; that
he is dealing with a vendor who values the relationship with him.
- AC1: Universal 80x86 release.
Include all operating system platform versions in the Intel
architecture release. In other words, when you buy an 80x86 AutoCAD
Release 11 you get 386 DOS, 286 DOS, Xenix, OS/2, and Windows
executables all in the box. If any of those versions aren't available
at the time we ship the product, include a coupon for ordering the
others (just like the coupon Microsoft includes for no-cost ordering
of 360K floppy or CD-ROM versions of their products). When you
consider the costs of separate inventories, bills of materials,
exchange order processing, etc., the cost of this to Autodesk
may be negative.
- AC2: Eliminate AME surcharge.
Include AME at the $3500 price point. We want to create a huge new
market for solid modeling, and we have a unique opportunity to do so.
Coming down the pike is ACIS-based AME-2, a major
functionality upgrade. What better way to sell it than to get every
Release 11 customer acquainted with what solid modeling can do in his
application area? This also eliminates the expense of processing AME
- AC3: Promote solid modeling.
It isn't too late to beat the bass drum about what we've done for
the industry by including solid modeling in AutoCAD Release 11. Even
if we continue to charge extra for AME (especially, in fact), we
should give it the launch it deserved when it was introduced, even
though several months have passed.
- AC4: Expedite Windows AutoCAD.
The existing Windows AutoCAD Product Plan Proposal should be
implemented in its entirety as the highest priority project associated
with AutoCAD Release 11. If diverting resources from other platforms
or related projects can help ship this product sooner or make it more
comprehensively integrated with Windows, divert them.
- AC5: Expedite Windows-32 AutoCAD.
Assign resources appropriate to ensure that a 32 bit version of
Windows AutoCAD will be available for delivery the day Microsoft ships
the required version of Windows to customers. If more than six months
can be saved and substantial performance improvements had by pursuing
an interim 32 bit version (e.g., Watcom), consider it
- AC6: Include CD-ROM(s) with AutoCAD.
Autodesk has everything in its possession today to include a compact disc
with every copy of AutoCAD we ship. Six hundred megabytes...what
could we fill it with? To start with, all the stuff on the existing
drawing library disc, which needs only to be run off in sufficient
quantity and included in the package. How long can that take? As
soon as we can arrange it, we should make space on the CD available to
all our developers to include sample applications and demos of their
products. Within 45 to 60 days, we should be able to include a
machine-readable version of the AutoCAD manual, hot-link indexed and
connected to the HELP command in the product. If everything won't fit
on one CD, then two or three. We'll have to get rid of that
overpriced retrieval program on the current CD. There's no need to
replace it; simply providing a High Sierra format CD and a directory
map is enough to get the files off on any platform I'm aware of.
- AC7: Upgrade AutoCAD documentation.
Re-design and re-print the AutoCAD Reference manual and Tutorial to
equal the production values of the corresponding manuals included with
Microsoft Word or Corel Draw. This is entirely a question of
graphical design, use of colour highlights, etc. In the longer run,
develop an ``AutoCAD Encyclopedia'' to supplement the existing
reference manual, organised along the lines of the Microsoft Word or
Excel reference manuals.
- AC8: Direct support line.
I think it's shameful to ask $4000 for a product and then refuse to
talk to any customer who calls with a problem. We should provide, at
the minimum, one year of free telephone consultation. There's nothing
wrong with asking who his dealer is and providing feedback to the
dealer, but we should take the call and ungrudgingly provide whatever
assistance we can.
- AC9: User newsletter.
We should immediately start production of a quarterly AutoCAD user
newsletter, to be mailed to all registered users. The content of the
newsletter would primarily be meat and potatoes technical and
application information about the product, questions and answers, and
the like. For a prototype, look at the Cobb Group newsletters such as
``The Expert'' covering Excel. New product information, listing of
interesting items available on CompuServe, and the like could serve as
filler, but would not be the main purpose of the newsletter.
Beyond the short-term actions to upgrade the quality of AutoCAD and
its perception as a premium product, we must revisit our development
plans for Releases 12 and 13. Does a release defined by a shipment
date rather than customer requirements, one motivated by a hope that
it will create short-term demand for the product and raise its
``street price,'' keep faith with the customers who are responsible
for our prosperity? How long can we get away with releases with less
and less substance in each? What is an appropriate manpower
commitment to development and maintenance of our principal product?
- AD1: Developer product orientation.
Make the time and resources available, even if it means slipping other
schedules, for every individual involved in the development of AutoCAD
to become familiar, in depth, with a modern Windows or Macintosh
application such as Excel, Word, or CorelDRAW! This should be
viewed as an education in the standards of today's market and what
users expect of products, not aimed at mastering the applications
- AD2: Evaluate development and QA staffing.
Investigate the tradeoffs between manpower allocation, content of each
release, and time to market, then propose staffing plans for various
points on the curve. This investigation must include a review of
development methodology and tools which permit more developers to work
together without conflict.
- AD3: Parallel Release 13 projects.
Take all of the contending plans for Release 13, set them up in
parallel, and let them run for 6 to 9 months with the goal of
producing, at the end of that time, a base suitable for all the
requirements anticipated for AutoCAD over the next decade. These
projects would, collectively, compete with the NC1 project (see
below), to become the base for future development. At the end of the
parallel phase, if it isn't already obvious, an in-depth review will
be made to decide which alternative(s) to continue to pursue.
Multimedia's going nowhere. Why? It's too damned
expensive. When you're trying to pioneer a new market, you have
to recruit a small cadre of ``early adopters'' who become the fanatics
who discover new applications for the product, build upon it, and
generate, through their efforts, the first success stories for the product
which are echoed by a well-designed promotional campaign. This is how
we got AutoCAD going. If we had introduced AutoCAD at $3000, I
am convinced that very few if any of the people who ended up so
influential in its early growth (many of whom now work here-ask them),
would have been able to afford or have been inclined to take a chance
The multimedia market closely parallels the early days of AutoCAD;
both were considered outside the mainstream of PC applications, both
were limited at the start by crude and expensive hardware, and
both lacked the collateral support resources (books, training, user
groups) that allow a small initial beachhead to expand to a much
larger community of users. So what do we do? Raise the price on
- RM1: Re-price Animator at $149.95, add graphics modes, target
If we want to own this market, and I cannot conceive of any
reason we wouldn't want to, here's how to go about it. First, we have
to reprice and reposition Animator. It's a spiffy animation program,
but it also happens to be the best paint program available for
the PC as well. Its only limitation is that the only graphics mode it
supports is 320x200 VGA/MCGA mode. What I'd do is remove that
restriction, and support all the 16 colour modes and SVGA 256 colour
modes for single-image painting only (the easiest way to
accomplish this is to license and use MetaWINDOW, as we used for Chaos). Then, we re-price the product at $149.95 and re-launch it,
aiming it directly at Z-Soft's various Paintbrush products and Colorix
VGA Paint. ``For the price of a paintbrush, we give you the whole
movie studio....'' That kind of thing. The re-launch and
post-launch support will be expensive. Spend the money. Otherwise
kill the product and cut your losses.
- RM2: Re-price high-res animator at $275.
As the reborn Animator takes off, we roll out the high-resolution
animator, code named PJ, at $275. Call it ``Animator Professional''
and harp on the way it effectively uses 386 mode and VCR control,
etc. Continue to target paint programs as well as animation, and show
how POCO and user-defined inks make this the first open-architecture
- RM3: Move animator, PJ to Windows.
As quickly as possible, we should make both the original Animator and
PJ work under Windows. In the case of PJ we may have to wait for the
32 bit mode Windows, but in neither case should we wait any longer
- RM4: Re-price 3D Studio at $499.95.
Don't touch the product. Just move the price down to where the early
adopters can afford it, including all those people who'll buy it on
impulse and find out only later that this is the product they've
waited for all their life. Don't discount the impact of ``corporate
early adopters''--at $500, lots of companies will buy one and have
somebody evaluate it. At thousands of dollars, it's a major purchase
decision. Doubt me? Try ordering a $3000 software package to ``look
it over'' around here. After repricing, re-launch much more broadly.
Offer demo tapes at cost through 800 number. Maybe try a little
cheap-o TV. Move the product to Windows as soon as technically
- RM5: Launch an image-processing product.
Acquire, license, or develop a product that embodies the image
processing functions not provided by PJ. (Quite possibly, these
facilities could be integrated into PJ or made some kind of add-on to
it.) This would complete Autodesk's product line in the raster
graphics industry. The product should be targeted at a $499.95 price
point, and could use comprehensive manipulation of scanned images as a
means of establishing its initial customer base.
In parallel with the work underway on AutoCAD, we should immediately
begin a project to produce its successor; a thoroughly modern product
that does everything AutoCAD does and provides a reasonable level of
compatibility, but which is freed from the truly stupid baggage of the
past. This project would target its initial product release for
Windows, with subsequent platform versions thereafter based on market
demand. This development project would be staffed comparable to the
AutoCAD project and assigned similar priority.
- NC1: Develop AutoCAD successor.
Immediately begin development of the next-generation CAD system--the
replacement for AutoCAD. The outline, specifications, scope,
pricing, and timetable for such a project are given in the ``Nightmare
Scenario'' on page . The project would be
chartered to take as much or as little code from existing Autodesk
products as its developers wished, and to use whatever development
environment and methodology they believed best suited to the task.
The initial release of this product would require
a 386 or better and the 32 bit version of Windows. Other platforms
would follow. The product would be able to read and write AutoCAD
.DWG and .DXF files, but would not be required to maintain
absolute compatibility in other aspects. For example, the command
line could be entirely absent, menus might be totally different, and
AutoLisp may not be provided. This would differentiate the product
from AutoCAD, so when it was introduced
at a lower price with broad distribution it
would not be perceived, at first, as a replacement for AutoCAD. The
product would, however, serve as the base upon which such a replacement
would be assembled in the future.
All existing Autodesk resellers would be authorised to sell the new
product at the date of its introduction and would be encouraged to
sell it to prospects they are currently losing due to AutoCAD's
price. The product would also be placed into general distribution,
using the channels which already carry Generic CADD, plus others we
may develop in the meanwhile. If the fear generated by the existence
of this product (which will be done by somebody in the next 48 months
anyway, I am sure) cannot be overcome, I suggest it may be easier to
take if the product is named ``Generic CADD 7.0.''
- NC2: Continue product line integration.
Building on the initial release of the successor system, which will
already integrate illustration, 2D and 3D wireframe, surfaces, and
solid modeling in a modern application framework (providing multiple
document architecture, clipboard, a full function macro recorder and
editor, background generation, and inter-application hot links just as
Excel 3.0 does), continue to roll in other components of the product
line as pluggable pieces. Two or three releases down the road, it
should be possible to paint, do image processing, create animations,
and perhaps build worlds for cyberspace or spatial models for Xanadu
all from the user interface (and, just as important, application
linkages) of the product.
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Editor: John Walker