Autodesk’s New Upgrade Pricing Policy

A tweet from Brad Holtz of Cyon Reasearch alerted me to Autodesk’s new upgrade pricing policy due to take effect in March next year. According to this page:

Autodesk is introducing a new upgrade pricing model that will go into effect on March 16, 2010. After that date, all upgrades, from any release level, will cost 50% of the price of a new license. This is a departure from the way upgrades have always been priced – which has been based on the “coming from” release level. For example, after March 15, customers upgrading from AutoCAD 2008, 2009 (or 2010) will all pay the same price: 1/2 the cost of a new license of AutoCAD.

Autodesk’s current upgrade pricing policy is already geared towards “coaxing” customers to choose subscription over normal upgrades. According to the prices on the Autodesk Store, upgrading from AutoCAD 2009 to 2010 costs $595. Subscription stands at $450. So it makes more sense to stay on subscription than to upgrade every year. The cost to upgrade from 2008 and 2007 to 2010 is $1195 and $1795 respectively. Both these prices are more than what a customer would have paid if he was on subscription. Moreover, you cannot upgrade from retired versions of AutoCAD (2006 or earlier). You need to buy a new license which costs $3975. Of course, you can make use of the Autodesk Legacy Program to get a 30% discount. But you will have to buy Subscription along with it, which brings down the discount to about 20%. Moreover, for reasons that are not obvious to me, the Autodesk Legacy Program is available to customers in US, Canada and Latin America only. I thought customers in poor countries needed assistance.

Anyways, all this is old stuff. Now let’s analyze this new upgrade pricing policy. With this new policy, assuming that the policy was already in effect, upgrading from AutoCAD 2007, 2008 or 2009 will cost $1987.5. That’s half of $3975, the cost of a new license. So comparing this with current upgrade prices, upgrades from 2007, 2008 and 2009 will be an extra $192.5, $792.5 and $1392.5 respectively. So if I understand this correctly, a customer who still prefers to stay off subscription would be better off if he did not upgrade for 3 years as opposed to every year. As of now, customers upgrading every year (for whatever reason) lose only $145 ($595 – $450). But with this new pricing policy they will lose $1537.5 ($1987.5 – $450). Interestingly, the losses will decrease as the customer delays upgrading.

So as I see it, this new policy will have one of two effects on Autodesk customers who are currently not on subscription. It will either make them opt for subscription or it will make them delay upgrading their software. Autodesk hopes it will be the former. Because if it the latter then Autodesk may find itself in far more trouble that what it already is. I say this because it will not see any sign of money from non-subscription customers for the next three years. For their sake, I hope the people at Autodesk who have formulated this new policy know what they are doing.

Personally, I think this new upgrade pricing policy has the potential to add to Autodesk’s existing financial troubles. Here is why. Basically, most customers who are not on subscription are quite content with the version of AutoCAD that they already have. If they wanted the new features that get added to AutoCAD every year, they would be on subscription already. The current upgrade pricing policy ensures that. Moreover we are at the start of the three year DWG compatibility cycle that Autodesk has imposed on itself. So if an AutoCAD user does not upgrade for the next two years, he will still be able to exchange data with users of AutoCAD 2011 and 2012. My point is that an AutoCAD user who is not on subscription and who is quite happy with the version he has would probably sit tight for two more years and upgrade directly when AutoCAD 2013 comes out if he feels the need to do so. If history is anything to go by, AutoCAD 2013 is probably when Autodesk will change the DWG file format.

If you are an AutoCAD user who is not on subscription, I would like to hear what you think. Please do leave a comment.

  • rpaulwaddington

    Hi Deelip,
    I have two subscriptions and have done for many years; one for AutoCAD and one for Inventor – AutoCAD is the one that earns the most but that another story.

    Autodesk's subscriptions are not good value to many users and many know why and this will be a major stumbling block for Autodesk.

    Autodesk have been very active here in Australia getting their office staff (not dealers) to ring around lapsed subscription customers with the general spiel they need to re-subscribe or suffer the consequences – higher costs?

    I would agree with you Autodesk may find this will backfire – a similar policy relating to crossgrade has already done so with one of my customers – an AutoCAD user of some 15 years standing.

    Due to changing situations he wanted to switch from AutoCAD Mechanical to AutoCAD only at his next upgrade (he was only one version back but no longer needing Mechanical and it higher upgrade price). Autodesk said he had to pay the full Mechanical upgrade price then and additional upgrade price to the same version of AutoCAD – basically penalising him for daring to consider only using AutoCAD – so much for Autodesk's business partner strategy.

    The net effect; it was concluded he was better off putting the money he had allocated for Autodesk software upgrades into material or tools for his small toolmaking business, continue to work with the existing AutoCAD in the Mechanical software and reconsider his options years down the track. He will make more money from that strategy and so will many others and I think you can see why.

    Autodesk have made it much, much, much easier for this type of decision to be made.

    You may also be interested to know, here in Australia, AutoCAD has for many years been sold as a retail product available thru' a third party distributor and retail outlets. That will soon be no longer the case; Autodesk are moving again – and backwards – to an Authorised dealer structure with minimum sale goals and penalties – Applicable to AutoCAD but not AutoCAD LT?????

  • Mark Landsaat

    I have a seat of AutoCAD LT that I maintain because I get a lot of DWG files from Asia and I need to have good options to modify them. Funny enough I recently upgraded to the 2010 version, but the only reason I upgraded is because I upgraded to windows 7. Not because of any new functionality that may be available.

    Like Deelip mentions I'm perfectly happy with what LT is offering me and I can't see myself investing in it more than what I'm currently doing.

    With regards to dwg file compatibility. The first thing I did when I installed 2010 is change the dwg file format to .dwg2000.

    Long story short, Autodesk policies don't really affect me. The next upgrade for me is most likely when the new version of windows comes out. That is….if I will still be using AutoCAD LT when that comes around.

  • http://twitter.com/SeanDotson Sean Dotson

    While I see no need to upgrade AutoCAD I think Autodesk is banking on people upgrading their Inventor, Revit and other “higher end” products. If I were a 2D only shop, I could use R14 for everything I do in 2D but since I'm a 3D shop, there is no way I would still be using Inventor R10 (even newer than AutoCAD R14) for 3D.

  • geoffm

    once the price for upgrades approaches the price of competing products ie archicad, see what happens to the user base then.
    who wants subscription to put up with the ribbon?
    my last revit subscription was a lot more than $450.00, more like $1100.00

  • Daniel

    Wow! One could maintain several seats of Bricscad for the cost of maintaining one seat of Acad.

  • Dave

    I just “reamed” Autodesk with a letter that actually felt good to write. Send me your e-mail address, and I will forward what I wrote. I'm PISSED at not only Autodesk's outrageously high priced software but also the way they treat their PAYING customers. I “just” bought AutoCAD Map 3D 2009/2010 a year ago this past November. Now, because I didn't resubscribe by November 2009, they stuck me with a $100 late fee which they won't remove. If I don't buy the $695 resubscription (includes $100 late fee) by March 15th, then I have to pay the “original” cost which is almost $4,000. I'm DONE with Autodesk. I'll use the 2009/2010 software until I “wear it out.” I can't even update my software or even call tech support for the software I bought. This is unheard of… I can see why a LOT of people are dumping Autodesk in favor of other CAD vendors…

  • http://miletter.blogspot.com R. Paul Waddington

    Dave, a responsible/professional dealer should have explained all this before you signed up and, if this is not the case then they also should be taken to task.

    Equally if you have sent your letter through the dealer, I would resend it directly to Autodesk’s CEO Carl Bass – carl.bass@autodesk.com.

    Bass it a very conscientious professional CEO; one who will read your letter with great interest and take the appropriate – as he sees it – action.

  • Jonathan Yeandle

    Hello,

    I gave up on the CAD 'bells & whistles' train around 2002 when I realised that all of my main engineering and office applications were co-existing reasonably well, with each other and Win 2K. The previous occasion that this happened was on ACAD R12 about 6 years earlier.

    The main advantage is that most of my day can now be spent using CAD to design stuff rather than installing new versions with new and old bugs and then the updates/patches/video drivers etc and run the risk of ending up with a new problem.

    Shaun!,
    how is it that you are happy with out of date 2D CAD but sound unable to handle the 3D situation??……..”If I were a 2D only shop, I could use R14 for everything I do in 2D but since I'm a 3D shop, there is no way I would still be using Inventor R10 (even newer than AutoCAD R14) for 3D.”…..

    Jonathan
    Win 2K, IV Series 5.3, ALGOR R14, Cadkey 99, MS Office 97…..Happy!

  • Pingback: Autodesk Further “Simplifies” Its Upgrade Policy | Deelip.com




Archives

© 2014 Deelip.com. All Rights Reserved. Deelip.com is a registered trademark of Deelip Menezes. Log in - Designed by Gabfire Themes