Making a New Autodesk: Interview with Carl Bass
Roopinder Tara posted on January 11, 2016 | | 6623 views
Autodesk CEO Carl Bass in the Gallery at the company’s San Francisco office.

Autodesk CEO Carl Bass in the Gallery at the company’s San Francisco office.

Following Autodesk University 2015, we met with Autodesk CEO Carl Bass at the company’s Market Street office in San Francisco. Also present was Clay Helm, public relations director. I had been writing an article about Bass making Autodesk a technology leader (now published as “Carl Bass Brings Autodesk Into Its Golden Age”) and wanted to make sure I had my facts straight. But it was also an opportunity to talk about what Bass sees as his role at Autodesk, the past and future of the company—and a lot more.

ENGINEERING.com Director of Content Roopinder Tara (RT): At Autodesk University, you mentioned the three eras of Autodesk. Can you describe them?

Carl Bass (Carl): I think there's the founder period, led by John Walker. There's a very clear period of going from zero to public company. I think there's Carol Bartz, which is a handful of years there. Then I think there's a new era [that] starts 10-12 years ago.

RT: Where were you during the Walker days?

Carl: I was running Ithaca Software.

Autodesk’s “flying founders.” From left to right: Rudolf Künzli, Mike Ford, Dan Drake, Mauri Laitinen, Greg Lutz, David Kalish, Lars Moureau, Richard Handyside, Kern Sibbald, Hal Royaltey, Duff Kurland, John Walker, Keith Marcelius. (Image courtesy of Shaan Hurley, Between the Lines.)
Autodesk’s “flying founders.” From left to right: Rudolf Künzli, Mike Ford, Dan Drake, Mauri Laitinen, Greg Lutz, David Kalish, Lars Moureau, Richard Handyside, Kern Sibbald, Hal Royaltey, Duff Kurland, John Walker, Keith Marcelius. (Image courtesy of Shaan Hurley, Between the Lines.)

RT: Did you know John Walker and the founders?

Carl: I only knew some of them. I didn't know John particularly well. I met him a handful of times.

Carol Bartz Days

RT: So your relationship with Autodesk started in the Carol Bartz phase?

Carl: Yeah. We started Ithaca Software in 1983. In 1990, Autodesk buys Ithaca Software. When they buy the company, Carol has just come in, maybe a year before in '92.

I knew a number of the founders and then some of that second generation of people like John Lynch. So John Lynch is there but you know, Dan Drake, Greg Lutz, and Duff Kurland. A lot of the founders are still there when we first start working with them. Then there's the period where I'd say Carol takes the company and turns it from what happens in almost every successful startup. They go from a founder culture and startup into a real company.

RT: She made it into a billion-dollar company, right?

Carl: Right.

The very business-minded Carol Bartz, CEO of the “second era” of Autodesk. (Image courtesy of SFgate.com.)

The very business-minded Carol Bartz, CEO of the “second era” of Autodesk. (Image courtesy of SFgate.com.)

RT: How would you characterize her, looking back on it? Would you say that she was a real businessperson, not so much into technology?

Carl: Yeah, I think that's fair. Carol actually has a technical background. She has a degree in computer science but most of her career, except for executive management, was in sales and marketing. She started as a salesperson at 3M. Then she worked at Digital Equipment and then Sun Microsystems. She was a sales and marketing executive, but a business executive.

But I think when she took over leadership of Autodesk, I think her job was not so much defining the business as a cultural shift that goes on in which you transform a business from a founder culture. And in some ways, crazy ideas we all have as founders about [turning] the companies we start into a more mainstream business.

RT: So, a lot of smart people but all of them doing their own thing. She made it into a real company.

Carl: Yeah, she made it into a real company, real business. Brought in a lot of process and people with more experience and I think that's really quite common among startups. All of a sudden they get infiltrated by people who have done these jobs. Mostly startups, everybody figures it out for the first time, they go back to first principles. Then at some point you realize that's not the most efficient way to get stuff done. I think Carol helps the company mature into a real company.

RT: Carol Bartz hired you?

Carl: She acquired the company Ithaca Software. That was in late ’93. I stayed there until ’99.

RT: You're legendary for walking around the hallways in your Birkenstocks, bothering Carol with crazy ideas.

Carl: There's some truth to that. Yeah, I was outspoken. When she asked for my opinion I was certainly outspoken about it. Or direct. And then I leave for a couple of years and then I come back.

RT: To put it bluntly, did she get rid of you?

Carl: She did fire me in 1995. I had been there for two years. But never officially. The paperwork never happened. About four or five months later, a bunch of people asked if I would come back and work on stuff.

RT: What stuff?

Carl: I started running the AutoCAD group, like that. I worked on AutoCAD R14.

RT: Were you critical of the company or Carol? Was your criticism related to R13? Because that was a real moment for Autodesk.

Carl: Yeah, it was. It wasn't really criticism of Carol that I remember at all. It was probably more my immaturity and having not worked in a big company and not appreciating what it takes to work inside a big company and what the differences are between a big company and a small company.

Autodesk Strikes a Low with AutoCAD R13

RT: But R13?

Carl: R13 was definitely a low moment. Absolutely.

RT: It seems like Autodesk pushed it out the door before it was ready. Where were you during this time?

Carl: For the most part, I stayed to the side with R13.

RT: Weren’t you the product manager of AutoCAD when you came back to Autodesk?

Carl: Right. But it was the very tail end of our release cycle. The Ithaca Software team contributed to the graphics. That was maybe the third or fourth or seventh update to R13.

RT: The worst was already behind.

Carl: I saw it, but we were not involved. At the very end we did something that accelerated the graphics performance, the WHIP driver and stuff like that.

RT: After that?

Carl: I worked on R14. Then I left for Buzzsaw and then we came back at the end of 2001 and then kind of started up in 2002.

RT: So you ran Buzzsaw then came back?

Carl: I came back in 2002. I had been outside the company for two years at that point, and I came back with a view that the company could be much more successful, that it had grown up. It didn't really understand what it was capable of. When you're on the inside you just don't see it. With Buzzsaw, a small startup, you have a little influence. I say a startup is like a ball-peen hammer. It's little and you can tap it and you can move it really quickly and really adroitly, whereas a big company is like a sledgehammer. Hard to move, but when you get it to move you can have real impact.

I came back with this view [that] Autodesk didn't appreciate how much influence it had in the market. Having been out there with Buzzsaw, I felt, "This idea actually sounds good. I wish this was from Autodesk." I came back with this renewed idea that Autodesk could not only continue to do what it was doing but also transform these industries.

RT: What products was Autodesk into at the time?

Carl: At this point it’s primarily AutoCAD, LT and a little bit of Max. Those are the three things. Suites come later. One of the first things I do when I'm back is we buy Revit (see press release).

Autodesk Buys Revit

Figure 1- “[Revit was] my idea,” says Carl. Buying Revit was an insane gamble by Autodesk that paid off. (Image courtesy of Autodesk.)

Figure 1- “[Revit was] my idea,” says Carl. Buying Revit was an insane gamble by Autodesk that paid off. (Image courtesy of Autodesk.)

RT: It looked very expensive at the time.

Carl: It was $133 million for essentially no revenue.

RT: You had a lot of doubters, I'm sure.

Carl: I'm sure I did.

RT: Acquiring Revit was your idea?

Carl: Yeah, it was totally my idea.

RT: Okay. But you bought it at how much times revenue?

Carl: A hundred—almost infinite.

RT: Because it had zero revenue.

Carl: Close. I'm sure that it had less than a million revenue and we paid $133 million.

RT: What were you thinking?

Carl: That this was the future.

RT: The future? Because it was parametric? You saw parametric modeling as the future?

Carl: Parametric already existed in mechanical CAD, so you didn't have to be a genius to figure out it was the future. There was this question, could buildings be defined this way? Or were the models going to be too big? In mechanical CAD, we think the models are big but they're relatively small. You look at a building and there are millions and millions of what mechanic engineers would call parts. How could you model that? I talked to the guys at Revit from the very founding of the company and watched it develop and I said, "This is a technology that I think will transform the AEC industry.”

RT: Couldn't you have paid a lot less, Carl? They had no revenue.

Carl: No, not at all.

RT: Were you in a bidding war?

Carl: No, we were not in a bidding war. The founders knew what it was worth. Interestingly, Dassault was actually an owner of Revit.

RT: So you had a role in acquisitions when you came back, buying Revit? What was your title at that time?

Carl: I think I was chief strategy officer. I went through a number of jobs. I became executive vice president, then I was COO and then I became CEO. But you know, I think in retrospect it would be fair to say—and I think Carol would concur—when I came back we were setting up succession planning. By the time I came back Carol already was working her way out of the business and wanted to transition into a different role. So we spent kind of two years in which I began to take over. As you know, in a company, that decision was not up to me or Carol. It's up to the board. It was a way for her to give me more responsibility and the board would give a thumbs-up or thumbs-down on whether I was doing a good job. We spent a lot of the two years really in a transition period.

RT: Anything similar to that going on now?

Carl: [No response]

Technology Comes to the Forefront

RT: Ok, so you brought in technology. That's the pervasive impression of what has changed in your era. Technology starts to take on a bigger role?

Carl: Yeah.

RT: Since the founder era, technology seems to have taken a breather.

Carl: Yeah, I think now it is more similar to the founder era. I would say we try to blend the founder's vision of the technology to help customers with a business outlook so it can be a successful business. I think each of the previous eras favored one over the other and we now try to blend the two and say, “We're going to try to build a very successful business, but we're going to do it by building technology that helps customers succeed.”

I think over the time period, from 2002 to today, our technology focus has changed. We were more a technology follower. Today, I'd say in almost every industry, we're leading the charge. Sometimes that relates to market share, but I'm more talking about in terms of technical leadership. Even if you look at manufacturing. We may not have the biggest market share, but clearly the things we're doing are much more progressive and future-looking.

RT: Cloud, mobile hardware, 3D printing…

Carl: Generative design.

RT: Would you concede that Bentley is ahead of Autodesk in generative design?

Carl: No. If you look at what Jeff Kowalski talked about at Autodesk University, we've been showing generative design for three or four years on the main stage. I make this real distinction. There are a bunch of things where people are scripting. They're writing code to design stuff. Generative components are one. Grasshopper is one. I see that as scripting. I mean, it's a fancy version of AutoLISP, if you will.

Generative design is really this quantum leap in which we said, “if you had infinite computing power, how would you design and engineer things differently?” That's where you see things like the heat exchange or what we're doing with the car. We're trying to really rethink how you design and re-engineer with the power of the computer. I think all those things before are interesting, but they're really kind of […] "toys." That may be too strong a word, but they're close. They're cute. You write some code and it does some stuff you used to have to move the mouse to do.

RT: They make fancy shapes?

Carl: Yeah, it's fancy. But you know, then you have to figure out how to put panes of glass on it. Interesting. It's fine. It is not transformative.

RT: What is the main technology initiative?

Carl: I would say generative design and things like IoT […]. I think we're taking a lead in 3D printing. I think the most important one is probably us on the cloud. We were first. We were very intentional about it. We were very clear. Now there [are] a lot of people who range from being in denial all the way up to "me, too." I think this big bet we made on the cloud is a really important thing. I think it's probably our biggest platform shift we will make, biggest in my entire professional life. It's bigger than mainframes to PCs or workstations. Moving to the cloud is going to fundamentally change how we do it. It's going to be using the supercomputer that's in your pocket and the table that's on your job site to a million cores in a data center somewhere.

RT: Your robotics lab just came to light this year. Can you tell me more?

Carl: We've always done a little bit on traditional robotics, but we are interested in how do you use computerized machines to work alongside people.

RT: What have you discovered about innovation?

Carl: There [are] really two things our customers always want from a business level. They all want what they would call innovation or what I would call "sustainable competitive advantage." They want to be better than the other guys. They want that to last as long as possible. It’s the Apple premium: you can buy a phone for X or you can buy one for 3X and people pay 3X for the Apple product. Every company I talk to, whether they make cars or medical equipment or forklifts, says in some way that's what they're looking for.

The second thing they're all looking for is, “once I have that idea, how do I get that idea to market more quickly?” Those are the two things. We looked and said, “how can we take this combination of these awesome devices, power of the cloud and help people make products that were better products and bring them to market more quickly?” We kind of re-thought it from that point of view.

RT: What about innovation within Autodesk? It seems like the company is innovative in how it is thinking with all the different technology initiatives. How did this come about?

Carl: I think we've gone about planning. There's some amount of what I would think of as very traditional planning. You have a product. You put one foot in front of the other. You do the next update. Whether you release it every six weeks or every six months, it's pretty incremental innovation.

RT: The traditional stuff is still happening?

Airbus uses generative design for this cabin panel structure shown at Autodesk University. (Image courtesy of Autodesk.)
Airbus uses generative design for this cabin panel structure shown at Autodesk University. (Image courtesy of Autodesk.)

Carl: Yeah. But there’s a second kind. We look out to the future, identify important trends and important customer needs and try to blend the two. So we look and we say, “generative design and 3D printing, how does that help a manufacturer be more competitive?” Like you saw at AU [see picture]. That work with Airbus comes from exactly that. Airbus is trying to be more innovative. For example, how do they make lighter, stronger aircraft? How do they rethink things that haven't been rethought? We worked with Airbus to say, "Generative design plus metal 3D printing can allow you to make aircraft that are stronger and lighter." The results are in lower fuel costs.

New Ideas, Innovation

RT: Where are all these ideas coming from? Not all from you.

Carl: No, certainly not.

RT: How do you encourage ideas at Autodesk?

Carl: First of all, we have roughly 10,000 people who work at Autodesk. A lot of it is cultivating a culture where new ideas are appreciated. If I would say one thing that I learned in the however-many years I've been doing this kind of work, I've gone from thinking that the most important thing a CEO does is make lots of important decisions and I've subsequently learned that that is almost never true. The most important thing you can do is influence the culture. Coming in, I would've said, “you make lot of decisions and culture is kind of a nice byproduct.” Now what I would say [is], “95 percent of what you should influence is the culture and there are a handful of important decisions.”

RT: Do you feel like you have affected that change? The culture has changed?

Carl: Oh yeah, totally. Wouldn't you say? The company today, I think, feels differently.

RT: Could an employee come up to you in the hallway and say, "Hey, Carl, I’ve got an idea?" What would you say to them?

Carl: I would talk to them. People stop me all the time with ideas. People email me all the time.

RT: What do you have them do? Put their idea in a suggestion box?

Carl: It all depends. A lot of times, since I'm not going to do it, I'm not going to go off and write any code, I might say, "Have you talked to Buzz [Kross] or Amar [Hanspal] or Jeff [Kowalski]?" One of the things I find myself doing a lot of is just connecting people. The nature of my job is that I have less hands-on responsibility for things, but I have a better purview. If I know someone over here is interested in that idea, I'll go, "This is really the person you need to talk to." I'll go back to my desk. I'll send an email or I'll say, just come with me and let me introduce you to someone over there who's doing some awesome stuff like this.

Chief Maker

RT: Your personal experience has been for making things. You have your wood shop and a machine shop. Did the wood shop come first?

Carl: Yeah.

RT: Were you first a woodworker?

Carl: It's a little bit of a mix. I first learned how to do machining, but it was all about the same time. I learned how to do carpentry and I had a job in the late 1970s in a machine shop that was a subsidiary of Boeing. I was milling and working on a lathe with aluminum.

RT: You came into a company that was mostly about designing things. What was your agenda?

Carl: I think the first thing that happened when I came back was looking at things like Revit and Buzzsaw.

RT: You were filling in on the design side?

Carl: Right. It was extending. The second thing we said is, “remember the big change we make in 2002 or 2003, is we move to 3D.” We moved to model-based design. We go from people drafting to building models. There's an immediate payback in people making models. Drawings are automatically generated and kept up-to-date. Whether that's in the mechanical world or the architecture world, that was of great value to customers. I began to think, what comes next? I realized as we had 3D models, we could start doing things like simulation. We could start understanding its structure or thermal properties. This is whether it's an airplane or a building. So the next payoff for me was that you could do engineering as opposed to just kind of geometric modeling. Now we could really understand the thing we were building.

Autodesk Expands to CAE

RT: This led to adding CAE to CAD. Autodesk becomes a simulation company, right? $500 million later.

Carl: Yeah, exactly.

RT: You still were not actually making things, right?

Carl: And our customers were telling us they made money mostly from making things. Autodesk could help them make things but they were on the other side of the screen. Everything we helped them with was on the far side of the monitor. The question was, if you were going to build more innovative products and get them to market more quickly, how could you help a customer get something from that side of the screen to this side of the screen? In the end, their businesses were about selling things on this side of the screen.

We started looking and saw workflows would start breaking down when you try to bring a design to the field to make a building or a tunnel or an airplane or a car. There's a lot more things that can be done to make our customer successful. We started looking down the line, whether you call it construction in one domain or manufacturing and fabricating. We're now going to help people build the physical artifacts that are their products. That was the transition.

The Cloud and “Infinite Computing”

RT: This is leading into the cloud. How did the cloud fit into the strategy?

Carl: Early on we saw additive manufacturing. We also identified and labeled this thing we call infinite computing. No one else in the industry truly appreciated that if you could get an infinite amount of computer power, that it was elastic—meaning if you don't need it, you don't need to use it. You were no longer buying million-dollar servers. You were now in the era of using the cloud. You could scale up when there was high demand and shrink when there wasn’t. We said to ourselves, "This is a fundamental. This is a sea change." And while others were worried about this problem from different points of view—Google was using it for search and Salesforce was using it for CRM—we were asking, “what does this mean for engineering?”

RT: What did you see as fundamental problems that the cloud solved?

Carl: The first one was you could now have more computing power at an affordable price than was ever imaginable. We broke that two-year pattern of a new desktop computer that costs several thousand dollars with one more core and a little extra memory. We went into another mode, where you can just break out. I can now run a NASTRAN job on the cloud and have a thousand CPUs. I run the job for an hour and, when it's done, I'm not paying any more for those CPUs. That's a fundamental change that nobody had appreciated. If you think about that, in the old world they bought some amount of fixed computing power and might run that for a thousand hours. Now I take a thousand times that power and I run it for an hour. That was a way to get people to bring their products to market more quickly.

The second problem we recognized was that our customers are mobile and they work in teams. Almost every project in the world is done with a distributed work force. Whether it's an architect and an engineer and a contractor on-site or the supply chain and manufacturing, people are all over the place working on the same thing. The number of projects that are really solo is actually relatively small. We said the cloud is the place where people can come together and use it as a central coordination and collaboration point.

RT: Buzzsaw was actually cloud-based before people were talking about the cloud.

Carl: We saw the beginnings of this a long time ago. People talk about now moving to the cloud. Buzzsaw was a cloud-based application in 1999. But as these devices got more powerful, as more people got comfortable with using them on job sites and on the factory floor, we said, "Look, the model of trying to collaborate behind someone's firewall is like putting a square peg in a round hole." People have PLM systems behind the firewall and we saw it as a really awkward way to collaborate, whereas the cloud was such a natural one. It fit the topology of our business relationships. We have a public place where we all share as opposed to, say, giving someone VPN access to behind a firewall.

Most business software is online. Our CRM system, our HR systems, how we pay vendors, even our mail server has been outsourced for probably ten years now. We don't run our own mail servers. What we do well is build software for engineering. Running mail servers or building HR software, that's not our thing.

3D Printing

RT: How did additive manufacturing come into focus?

Carl: We looked at additive manufacturing and asked, “what are the advantages of this and how does that dovetail with what our customers want?” That's more how I'd say we do the planning now. It's not as precise, but it's more thoughtful and has a wider lens. We look and we say, "What's going to be important?" And try to figure that out.

Now, some parts of the organization continue to do more incrementally, but we also try to do more transformative innovation as well. You’ve got to balance those two.

Photos to Models

RT: One technology you didn't touch on so much is photogrammetry. Do you see that also as being transformative?

Carl: Yeah. We began to realize that the starting point for people who design new things wasn't always going to be a blank screen. Every one of our products, you opened it up and the first thing you have is nothing. Yet most people who design things in the world are often starting with something. It's a previous version of a product. It's an as-built of a building. We realize that it was becoming easier and easier and we could facilitate this of going and capturing something that already exists as the starting point for the next phase.

RT: Then you bought the company in south of France? There were a bunch of small companies doing photogrammetry there—why in the south of France?

Carl: I guess you need to be relaxed to see the future. Drink wine, be peaceful. Yeah and then you get some form of clairvoyance.

RT: Would you rate “reality capture” as an important technology?

Carl: Yeah, absolutely. Usually it's coming in cameras and phones, this ability to do 3D capture and I think that will be a very reasonable starting point for your next design. You'll capture stuff. Many of the engineering tools that we already have to date are valuable and this is just another input mechanism.

RT: Is reality capture a division at Autodesk?

Carl: No. I see it as being more a core technology than I do see it as a division.

Corporate Report Card

RT: I did print this out, this graph. Some, especially in the financial community, might consider this a report card. It shows annual sales and more.

Financial performance of Autodesk under Carol Bartz and Carl Bass. (Original chart made by L. Stephen Wolfe for GraphicSpeak.)

Financial performance of Autodesk under Carol Bartz and Carl Bass. (Original chart made by L. Stephen Wolfe for GraphicSpeak.)

These [A] are the Carol Bartz years. This [B] is where it reached a billion and it was going up and up. You came in and continued that.

Carl: Yeah. 2002, 2003 is kind of where we start. This [C] is the beginning of Revit and the midyears of Inventor and it goes up to here. Financial crisis hits [D].

RT: Yes. Where did the suites come in?

Carl: The first things that come in are the 3D products and subscription, the early maintenance subscription. They come in here [E] and that's what drives us out of the financial crisis. Suites came in 2010 [F].

RT: The revenue continues going up after that.

Carl: Yeah, there's that big fall off after the recession.

When you start looking at the transition to Revit and Inventor—to 3D modeling—we bring in a pretty new management team at that point. Right around that point [G].

Most of the people who had worked for Carol have left by that point. If you remember Dominic [Gallello], Godfrey [Sullivan]—remember all those folks?

RT: I do.

Carl: After that phase, there's a whole new leadership team. Some of the people who'd been at Autodesk for a long while but end up getting promoted. This is when the team of me, Jeff [Kowalski], Amar [Hanspal], Chris Bradshaw, Buzz [Kross]—we formed kind of a new team there and we're on a pretty good run and then the financial crisis hits. 

Back to Technology. Is It Worth It?

RT: Shifting gears. I love to see all the technology because I am an engineer and I appreciate Autodesk becoming a technology leader. But technology is expensive, right? Some of these technology initiatives come at a great cost. Do you see the downside? Are you hearing criticism? Is it too expensive to make the Pier 9 workshop? The Autodesk Gallery? Is it too expensive to give away software to schools?

Carl: I would say things like Pier 9. We always hear rumblings. When we started the gallery, for example.

But just to put this in perspective, in a given year we spend on the order of almost $2 billion. We spend $10 million a day. $10 million every working day. That's just the math.

People who don't do this for a living have no idea about the things that really cost money and the things that don't. I heard a lot of grief about the gallery when we started it. It is mice nuts in our expenses. It is one of the most valuable marketing tools.

Clay Helm (CH): We had 45,000 people come through it last year.

[T]his is a great way to engage with people, help people understand what we do.

Carl: If you look at it in perspective, it's relatively inexpensive. It's a very low cost compared to the return.

RT: Do you hear people saying, "Carl, you're wasting money. Let's cut all these things out?"

Carl: People will always say that. By the way, you do not do this job if you don't have thick skin. If you don't have your own compass. If you were to try to do this job by listening to what other people say, you would do it really badly. I don't spend a lot of time listening. I mean, I listen in the sense of you came in and said, "I have this great idea for what you should do." I listen. I listen and I digest it and I make my own judgement. That if I was just blowing in the wind and someone said, "I think you need to do this."

As an example, Pier 9. It houses several hundred employees of ours.

RT: It also has an artist-in-residence program. That has to cost you money.

Carl: Everything costs money. Just the real estate there is a fraction of the space you're seeing. It's a fraction of the cost of this building.

RT: Why did I think otherwise? It’s waterfront property in San Francisco.

Carl: You just had an impression. People don't know. By the way, I've heard a lot of criticism of Autodesk University. "It's got to cost us a lot of money, don't you think? We fly all those people there?"

When we have something which I think is so positive, like AU, we have to figure out how do we get the maximum benefit from it? We went from something that was only shown to the 10,000 people who attended, to what we have now: tens of thousands more come and watch it online in simulcast. It's streamed. We take the classes and we record them. They are played all year. We get hundreds of thousands of people to view the classes, which costs again a little bit more, but you put in a little bit more and the benefit magnifies.

By the way, if I spent all my time worrying about every thousand dollars we spent, I can't actually do this job. The truth of the matter is, we continue to be a company like most technology or software companies or cloud companies, close to 80 percent of it is tied to people. It’s our salaries, benefits and the real estate that we sit in.

Everything else you could imagine and many things you can't imagine are in that other 20 percent. But when you bring up all these other things, that's all of the other stuff. The vast majority spent at a company like Autodesk is in the actual software. Is in the people that make, sell, market the software.

CH: Intellectual property that goes into the software as well.

Interns and Artists

Brittany Presten, a star of Autodesk’s intern program, has received offers to continue her biomechanics research at Stanford, Oxford and Autodesk. (Image from AU keynote.)

Brittany Presten, a star of Autodesk’s intern program, has received offers to continue her biomechanics research at Stanford, Oxford and Autodesk. (Image from AU keynote.)

RT: You mentioned your interns at AU? You seemed to indicate they were among the best and the brightest.

Carl: They are.

RT: But, by the way, somebody could come along and say, "You have an intern program. That costs you money."

Carl: Yeah, but I look at it and say, it’s a valuable way to recruit people. I think it's a phenomenal program. We currently have over 400 interns. They do awesome work. Then they decide whether they want to work here and we decide whether we want them to work here. You both had that experience. It's a try-and-buy for both us and them. I look at that as incredibly cost-effective.

CH: And we give them really cool projects.

Carl: And hard problems.

CH: I'm seeing former interns include their internship in their resume in very public things, like the founder of Periscope was written up in Fast Company and he listed his internship at Autodesk.

It's got some cachet.

Carl: Yeah, I think it's great. I look at these things and say, look, when you run a business—you know, the whole trick is, you're going to spend money. The question is, are you spending it effectively? Are you spending it on the right things? Are you making a difference?

CH: You compare us with some of our competitors, for example. I'm not going to name names, but let's say some of them do television advertising or they advertise on broadcast television, is that cost effective? Is that a better use of millions of dollars? Or is creating a maker space where you bring in your customers and engage them?

Smart Marketing or Advertising?

Carl: I think Clay makes a great point. You look at TV commercials or big banners in airports around the world.

Do you think Pier 9 has been more effective at telling the story of Autodesk than an ad in the Financial Times?

CH: We have to turn people away because the demand is so high to come in and take a tour and experience the CNC machines.

Carl: And, by the way, the interesting thing is, it's not just appealing to the interns and the young people. Our customers come here, too. Daimler was here this summer. Airbus was here. Boeing…they all want to see that space. Everybody knows about it. Compare that to propaganda. I think this is important in the era in which we [are] now, in terms of promoting your company. Things like print ads with self-congratulatory things are going by the wayside.

RT: You're not going to do any more full-page ads in the Wall Street Journal? Like that one for Buzzsaw?

Carl: We learned our lesson. What is that, 15, 16 years ago? You can spend money there. You can put your name on stadiums.

CH: Or you can be authentic and then other people will talk about you.

Carl: Right. The one thing that I've learned, the world of marketing has changed considerably. People realize that when people do this, it is authentic. It is what we care about. It is where we put our money. As opposed to, say, putting our name on stadiums. Levi Stadium could've been Autodesk Stadium. Oracle Arena could've been Autodesk Arena. I never understand that connection. When I look at Pier 9 or the Autodesk Gallery and we have tens of thousands of people coming through and understanding what we're doing, [it’s] a very visible way of communicating.

You know what the gallery was? It was an outgrowth of AU. We said, five days a year we're able to create this fantastic buzz about what we do at AU. What can we do the other 360 days of the year? We came back after a number of years of very successful AUs. They are real highs. People leave with an impression of Autodesk that they didn't have. We try to do that with the gallery now, create that same kind of excitement.

CH: We're looking to spread it beyond San Francisco. There are “innovation spaces” in Toronto and Boston, for example.

RT: I heard Boston's got to be a big showcase.

CH: It's going to be focused on architecture and construction.

RT: You said at AU that Autodesk was like a Toyota. Then Jeff said, "We're more like the Tesla, right?"

Carl: I said I think historically the way people viewed us was as a Toyota. I think the way people are viewing us now is more like a Tesla.

RT: Lucky they don’t call it a Cadillac. There’s a brand that can’t find success with the new generation. Would you say Autodesk has been successful in getting the new generation?

Carl: Yeah, absolutely.

RT: Because of internships, new products—how?

Carl: You look at products like, what is the most progressive, coolest, hippest program for designing with? It's Fusion. You won't go anywhere else. If you want to go around schools, if you want to go to where the hipsters are, industrial design firms and ask them what's happening, what tools are they using? That's the kind of tool they're going to be talking about. I think that's what does it. I think these other things like the gallery and Pier 9, those aren't the main things.

At the end of the day, people view us through the tools that we make. When they look at things like what we're doing with Fusion, they get it. I had this interesting meeting. We went and we presented Fusion to a company of industrial designers and mechanical engineers. At the end of the meeting, I said, "So, what'd you guys think?" And this guy says to me, "You know, in 1998 I was in a company. We were using Pro/ENGINEER. And these guys came along with SOLIDWORKS. I looked at it and I said, 'The world had changed.' And today, I watched the demonstration of Fusion and I realized the world has changed again." That's the kind of excitement we're trying to create. We're making the next generation tools.

RT: How did Fusion come about?

Carl: Fusion was developed in-house. There were parts of it that were acquired over the years. The camera, the simulation. We asked ourselves, “what's getting in the way of customers doing those two things: innovation and time to market? How do they solve those problems?” We said, there are many capable tools in the market today, desktop tools, but, we said, the workflow between them is terrible. The way you purchase it and use it is ineffective. We said, what should the next generation tools look like?

We realized that the cloud offered these things where you could go from all the way from concept to fabrication in a single tool. That you could collaborate with all the other people on the project online and that you could take advantage of the cloud for infinite computing. So we built a product for industrial and mechanical design that was centered on this new technology platform. But again, it goes back to that thing. You had to have that picture of what's going on in the world of technology and then adapt it to what your customers want.

RT: Still, the old way remains. I mean, if they wanted the old way they still have that.

CH: You'd be using like five different tools or six different tools instead of one.

Carl: Yeah. We said, look, let's recreate a brand new way that you can design products and that's what Fusion came out of. The reason why it has so much success is we tapped into a problem that people knew. Just like I said, someone watched an hour demo of it and they said, "The world has changed." They recognize immediately the problems that they have can be solved with this.

RT: Autodesk is positioning Fusion as the platform of the future for mechanical design?

Carl: Yeah.

RT: Because it can do everything?

Carl: It's got simulation. It's got fabrication.

RT: And conceptual design?

Carl: Yeah, sure. It has all the T-Splines stuff.

You can go all the way from doing industrial and mechanical design, all the way to cutting parts on a CNC, or you can 3D print them. It's going to keep getting richer and richer. Fundamentally, that was the decision of architecting. Let's build this thing on the cloud because of all the advantages I outlined. By doing that, we had confidence that it would solve a customer problem. I think if you look at some of the other companies who have been just waking up to the cloud, they're mostly taking technology approaches from the past and just trying to reinvent, put them on the cloud. And I think that's a huge mistake.

CH: Look at Forge. At AU we introduced Forge. Fusion is built on that same platform of cloud services that we're also making available to other developers. If there’s an application that’s needed or a business problem that Autodesk won't solve, maybe our partners will.

Carl: I think you look at stuff and say, one of the successes of Autodesk early on was building a huge partner network, when it was a consolation of desktop products. We want to do that now. The platform's changed and we have to do that same thing.

RT: Forge invites partners to your cloud development platform?

Carl: Yeah, so we will have a big partner network. We will allow people to continue to customize and make specialized versions, but we want them to do it on the platform of the future.

RT: Nice to dangle that hundred million dollars in front of them? Autodesk didn't have that incentive with the earlier partner network.

Carl: No, we didn't. Thank you, Roopinder. Thanks for taking the time to come by.

CH: Thank you, Carl.

RT: And thanks to you, Clay, for putting it together so fast.

CH: Yeah, it just worked out. Thankfully.

Carl: Serendipity.