Interview with Anagnost, Part 3: Change Comes to Autodesk. Get Used to It

Interview with Andrew Anagnost, Part 3. Everything has changed: Products, pricing, the channel. Welcome to the world of the new Autodesk.

Part 1   –   Part 2   –   Part 3

Is the C for Change? CEO of Autodesk Andrew Anagnost talks of the changing the world by putting the most modern software in the hands of engineers, architects and builders.

Is the C for Change? CEO of Autodesk Andrew Anagnost talks of the changing the world by putting the most modern software in the hands of engineers, architects and builders.

As the winds of change sweep over the world, what could be better than the latest technology to help people deal with it? Autodesk, the design, simulation and manufacturing software firm had for the first few decades of its existence dealt in desktop-based, perpetually licensed software. All that is old news to its latest CEO. The new software is cloud based and term licensed. The architect of the change at Autodesk has been Andrew Anagnost, who for a year now has been CEO. In

Part 1

Part 2
, we discuss how construction need to adapt and adopt manufacturing techniques and methods. We conclude with how the tools of manufacturing and construction software have changed to adapt to the new generation of engineers, architects and builders – and how they will continue to do so.

Autodesk under Anagnost promises to recognize the winds of change sooner and react faster. We have missed some opportunities before, Andrew intimates (see part about SolidWorks below). That will not happen again. Not on his watch.

We’ve discussed design software for manufacturing and construction. But one of the changes at Autodesk has been the offering of PLM products. Why?

PLM needed to change, too. Why is PLM so expensive for people? Because what happened is you installed the PLM system at company X, and you customized it to their process. And then you installed it for company Y. When you move to the cloud, people come to the cloud, because you’ve got one system that scales. They can still customize, but it’s one environment that they plug into and have the ability to customize and expand. This drives down the cost and complexity. And, it increases the fluidity and flow of the data. It allows us to do things behind the scenes that you’d have to do with armies of consultants on a site-by-site basis. It’s a very, very different world. This platform transformation is not to be underestimated. It’s why we’re excited about where we’re going. And it’s ultimately over time why we’ve made all the decisions we’ve made in terms of changing the company. This is where the differentiation in value is going to come from in the future. And some of our customers are ready for it. Some of them aren’t.

Customers are not happy about product line changes?

There’s been product line changes, data flow changes, how they think about data management changes. By the way, some of our customers are ahead of us on this. Some customers are already asking us for pre-construction solutions that we don’t have. And they’ve built some themselves, frankly. But they’re asking us to do it. And there are some customers on the manufacturing side that say they need to be able to pull in all the connection points from a building model so they can build a really complex spiral staircase out of prefabricated steel or prefabricated aluminum. They’re asking us for this. We’re scrambling to give it to them. Others are asking us to “just make AutoCAD faster.” We do have this dichotomy.

Yes, the Autodesk problem of having so many legacy customers. Drag them along into the new world? That’s not easy.

Yeah but we’re good at that. How many transitions have we moved customers through?

Besides 2D to 3D?

We’ve done 2D to 3D. We’ve done from 3D to simulation-based. We’ve done from no data management to data management. We’ve moved people from AutoCAD to Inventor. We’ve moved people from AutoCAD to Revit. 2D to 3D is a whole process change. We can do this. It just takes time.

Autodesk has the advantage of having all these users. Autodesk can be patient, wait for them to move up to the new technology when they are ready. It seems like they are staying under the Autodesk roof, at least. But some have been quite vocal with their protests.

We believe the ecosystem is moving into this new direction and over time, there are two things you have to deliver. One you have to show people their place in the new world and two, you actually have to deliver the value that you’re talking about. You can talk about the future, but you have to be able to show how users can get their hands around it. You remember when we rolled out Revit?


We got hate mail saying, “why are you working on this stupid thing. I’m using AutoCAD architecture. I need new object enablers in AutoCAD Architecture. You’re ignoring me.” Now I guarantee you 50 percent of the people who were writing that kind of mail are using Revit.

We see this every year at Autodesk University. A large part of the audience who just wants the bugs fixed.

That’s important. We have to fix their bugs. But at the same time, if we sat still, someone else will move ahead. You can’t sit still and think they’ll wait for you to do it. SolidWorks proved to us users won’t wait. That brings a painful memory back.

Where were you when SolidWorks happened?

I had just joined Autodesk. I came to build Inventor. You could argue we should’ve bought something….

Autodesk did try to buy something.

We did. We did. And you could chalk that up to our hubris, or a mistake.

But, the lesson has taught us, and it’s a lesson burned into the people here, is that not all of our customers will wait for us. And there are people out there that will do it if we don’t.

You’re committed to not letting something like SolidWorks happen again?

It’s in our blood. Not in construction and not in the next wave of manufacturing. One of the greatest little secrets in Autodesk right now is Fusion. When you see how pervasive it has become in education, and when you start looking about what we’re doing with integrating manufacturing workflows with design workflows – just watch what’s happening over the next five years. It’s quite a little sleeping dragon.

I thought you’d be saying how popular Fusion is.

It is wildly popular. But we have not put any energy into making it into a big business. We have focused on education. We have focused on startups. And we have focused on small machine shops.

Not marketing Fusion? Is Autodesk being protective of Inventor?

Oh yeah. I’m very protective of Inventor. Inventor continues to grow and Inventor is fabulous. SolidWorks continues to grow and SolidWorks is fabulous. 

What’s holding you back from totally promoting Fusion to everybody?

If you went to a SolidWorks user and an Inventor user right now and you said you should move to this new cloud-based thing, towards Fusion, they would ask, “Why? Why would I spend money right now to move off of what I’m using? What’s the real benefit?” Our answer would be that Autodesk is automating the design-make processes. They would ask: “Why do I want that? Right now, people are just concerned with doing their jobs.” We would remind them about when Pro/ENGINEER came out it took a while, probably five to eight years before people realized what they could do with this parametric thing. And then they started buying it and PTC grew rapidly. Not on volume, mostly because it was super expensive. Then, by the time SolidWorks came along, they had already established the market. All SolidWorks had to say was, “I have a cheaper Pro/ENGINEER for you, and it works on Windows. People understood that. People do not understand if we tell them their processes are all going to be cloud-based in the future, and that we’re going to be automating design and make processes.

People have to understand what the value is to them. Why is Onshape not successful? It’s not because they don’t have talented people. The reason they’re not successful is because nobody needs CAD in the browser. They built something beautiful, but if you sit down with someone and you ask them if moving from Pro/ENGINEER to SolidWorks on the PC is the same as moving to SolidWorks in a browser? They’ll say no. It’s not the same. The value of a cheaper, better Pro/ENGINEER on a PC was immediately better to everyone.

It’s not so clear that there’s an immediate value return with CAD on a browser.

Is Fusion installed on a device or does it work in a browser?

It does both. It’s hybrid. We do a hybrid approach. But, like I said, we focused a lot on education. A lot on startups. Startups don’t have a legacy to protect. Students just love the stuff. They’re graduating from school and asking why are you using this old stuff? Are they going to change the world yet? No. But at some point.

Again, why isn’t Fusion being massively promoted?

Because we’re focusing on audiences that find immediate value with what we’re doing with the cloud and what we’re doing to connect design and make together.

So you’re patiently waiting for your customers to find their need for it and then you will be here for them?

Yes. We’re patiently waiting.

Are you going to continue to develop Fusion faster than Inventor?

Yes, we’re developing it pretty fast.

So, it’s a waiting game?

Yeah. The technological problems we’re trying to solve with Fusion are not easy. When you’re trying to automate design-make workflows and things like that, it’s pretty sophisticated stuff and it takes time to get it right. But, yeah, we’re totally patient. And when the customers are ready, we’re going to be able to say here it is.

Meanwhile, everyone stays in the Autodesk flock?

Frankly, we think some SolidWorks customers are very interested in what we’re doing as well.

Do you ever see Fusion being used for AEC?

There’s something fundamentally different with AEC. But, yes, it will be used. It will be used for manufacturing building components. In AEC, there’s always going to be this low fidelity model that allows you to look on a big scale at the whole of the building. Then there’s going to be these collections of high fidelity models that are manufacturable.

Is the future to have one software that can design everything?

I think the future is rather than buying a product from Autodesk, they basically use the capabilities that they need at any moment. Now we’re such a desktop-centric world and we’re still such a product-centric world. People see themselves as a mechanical designer or as an AEC designer. “I’m going to use SolidWorks, Fusion or Inventor.” Or “I’m going to use Revit or Nemetschek software.” But 10 years from now, people are going to say, “Yeah, we’re using Autodesk. I’ve got my building model here and here’s my fabrication model over here.” They’re not going to know that they’re actually using different number crunchers behind the scenes.

Then only their data becomes important?

Just their data becomes important.

Whatever they’re using to work the data is incidental?

And that’s the world we’re moving to. That’s the big change that’s sweeping over the industry, and it’s quiet. It’s happening slowly. Are there barriers? There are absolutely barriers. We talked about permitting. I need drawings and not a model. Why do you need drawings and not a model? Why is it all the permitting process model based. Why isn’t a building informational model required for every project? I don’t care if it’s Nemetschek’s model or Revit’s model. Why isn’t it required for every single project? And then you get into something a little stickier in construction: contractual relationship between architects, GCs [general contractors] and owners.

Those relationships right now are designed to move liability to someone else. In our role as a technology vendor, we want transparency to the data. We want data flow. We want effortless data flow. We want visibility as to who did what and who is assigned what. Some people don’t want that, so that’s going to slow things down, too.

More like exposure than transparency.

Exactly. But that will change as well because, at some point, the people that embrace transparency and data flow are going to be bidding on the projects quicker, they’re going to be coming in with lower bids, and they’re going to be delivering the projects on time. So, at some point, the people that embrace this and take the risk of transparency are going to be winning more business. It’s just like the rise of Pro/ENGINEER back in the day. It was the people who took the risk of learning how to use it who were then able to make higher quality products, revving it quicker, and building configurations faster than anybody else.

As well as have a job for the future, a good career.

All of this has happened. It’s a patience game. I think some of it’s going to happen faster than people think because the platforms we’re moving on are evolving in capabilities a lot faster than platforms did in the past.

There’s big money in construction [compared to product design].

There’s big money in construction. There’s big waste, too. There’s big increases in IT spending. And I’m guaranteeing there’s going to be classic manufacturers entering the construction market. Look at China. They assemble buildings in two weeks.

Is that automated or just done with many people?

Yeah, there were many people, but it was done with people and manufacturing processing. You know what the company was that did it? You know what they were building before they did that project? Air conditioners.

So, construction companies are hiring people from Airbus, Audi, Ford.

Manufacturing and assembly principles can be borrowed to make pre-fab components in a factory, but can they also be used on site?

They’re using pre-fab and assembly on site. So that building video that we love so much, it brought in a bunch of pre-fabricated components, but it used assembly planning techniques to raise the building. So you’re going to see people that are classically manufacturing things actually contributing to the building ecosystem. And you’re going to see people in the building ecosystem moving into the manufacturing ecosystem.

It’s all coming together?

It’s the convergence. We’re excited about it. Through our lens, we’re the only player in the industry that spans all these industries. We look at this and say this is fabulous. This is going to be not only an interesting problem for all of our engineers to look at over the next 20 years. It’s an interesting growth market for Autodesk.

And it’s also necessary. When you look at something that’s not normally technologically interesting, a good business opportunity, but actually provides an enormous amount of value to the customers, to society, it’s hard not to get excited about it.

Are you basing any business projections on the automation of AEC industry? Do you think Autodesk is going to grow from a 2 billion to a 20-billion-dollar company, for example?

I think that’s a big number. Here’s one of the things that’s always difficult to predict here. Some things you make cheaper. Some things you make more expensive. It’s the mix of those things that come together that govern how much you’re going to grow. When we talk about Autodesk five years from now, we do talk about a much bigger company. And we do talk about a design-make company, not a design company.

What is the five-year projection?

Autodesk Goals Through Fiscal Year 2020. (Picture courtesy of Autodesk)

Autodesk Goals Through Fiscal Year 2020. (Picture courtesy of Autodesk)

How most of the growth will be from automation of construction?

It’s Autodesk’s next billion-dollar market. You said 20 billion. I could easily sit here and say it’s Autodesk’s next billion-dollar market because there’s more people out there to touch. And, like I said, to go back to the discussion we started here about automation and a fear of automation, we think there’s going to be more jobs building things 10 years from now than there are today. We’re 100% convinced of it because people are going to be building more things.

It’s Friday afternoon, when most would be planning their weekend or trying to beat the Bay Area traffic, as frightful as it will be soon. But Andrew is not slowing down. He flies down the hallway after we leave his office, into one of the C-suites that lines the hallway, as if the discussion of the vision only delayed its execution and he has to make up for lost time.