QUOTE AND NEWS
The Hindu Business Line  12 hrs ago  Comment 
Autodesk has released new Autodesk 2016 Design Suites that claims to offer more control over all aspects of the design-to-make process through a connected desktop and cloud-centric user experience...
Benzinga  May 19  Comment 
Autodesk, Inc. (NASDAQ: ADSK) reported better-than-expected results for the first quarter, but the company lowered its outlook for the year. The San Rafael, California-based company posted quarterly net income of $19.1 million, or $0.08 per...
TheStreet.com  May 19  Comment 
NEW YORK (TheStreet) -- Autodesk shares are down 1.76% to $56.51 in after-hours trading on Tuesday following the release of the software design company's first quarter financial results after the closing bell today.Revenue for the quarter...
MarketWatch  May 19  Comment 
Autodesk Inc. on Tuesday reported fiscal first-quarter earnings of 8 cents a share, compared with 12 cents a share a year earlier. Adjusted for one-time items, the company reported earnings of 30 cents a share, down from 32 cents a share a year...
Benzinga  May 19  Comment 
Shares of Autodesk, Inc. (NASDAQ: ADSK) fell on Tuesday ahead of the company’s first quarter financial results after the market close. The company guided earnings of $0.28 per share (on revenue of $635 million), 12.5 percent below those...
TheStreet.com  May 18  Comment 
NEW YORK (TheStreet) -- It would be a gross understatement to say expectations are high for architectural software design specialist Autodesk . Ahead of the company's first-quarter earnings results Tuesday, ADSK stock is valued at 168 times...
Forbes  May 15  Comment 
Despite an expected dip in profit, analysts are generally optimistic about Autodesk as it prepares to reports its first-quarter earnings on Tuesday, May 19, 2015. The consensus earnings per share estimate is 14 cents per share.Over the past three...




RELATED WIKI ARTICLES
 
TOP CONTRIBUTORS

Autodesk (NASDAQ:ADSK) sells Computer Aided Design (CAD) software, which is used by engineers and architects to mock up designs for products and buildings. While Autodesk's competitors sell advanced software with a $10,000 price tag to niche audiences, Autodesks's "AutoCAD" sells for a relatively modest $4,000, making it the de facto standard with 85% market share. The software's price means AutoCAD is the only option for smaller firms - a market the company's competitors have only recently begun to target.

Autodesk's large customer base (at 85% market share more than 8 million AutoCAD users) is itself a competitive advantage. CAD software is technical and tricky to learn, and therefore switching costs are high. As the defacto standard, most new professionals who need to use CAD software learn AutoCAD. This represents an enormous advantage for ADSK, as competitors will find it difficult to break through this standard.

The company has grown revenues by convincing customers to switch to a subcription model for AutoCAD software. In this model, customers get automatic updates and new features in exchange for a recurring fee. The model is much more profitable for Autodesk - only 22% of Autodesk's customers buy software in this way, but they account for nearly half of the revenues.

Company Overview

Since 2003, Autodesk has shown constant growth in their revenues and kept the same hold on the market. AutoCad happens to be the standard in the market, primarily because it takes time to unlearn the design software and learn a new standard. Moreover, Autodesk has traditionally focused on the mid market segment,the largest segment in the market, whereas their nearest competitors have been focusing on the higher end segment. The company has focused on converting their customers to a subscription plan as well, so that they can make more revenue per client.

Trends and Forces

Industry wide Transition from 2D to 3D

Autodesk is trying to increase the adoption of “next generation” 3D software products as compared to the 2D market. It recognizes that the 3-D segment would be a key driver for growth for the company in the future. This would definitely provide Autodesk with the opportunity to up-sell its massive 2-D installed base into higher average sales price (ASP) 3-D software and to boost growth.

Dominance of AutoCad in the market

Competitors in 2-D CAD are quite small, with none exerting significant independent threats to Autodesk’s position. AutoCad and AutoCad LT continuously drive up the sales for the company. They are touted to be the “crown jewels” of Autodesk, accounting for approximately 44% of revenue and 36% of licensing revenue last fiscal year. Until now, the products have doing well in the market. However, an increasing focus on this segment by their competitors, namely UGS who is commoditizing its 2-D software and allowing users to download it online, highlights a trend that might catch on in the future, and prove harmful to Autodesk.

Piracy and Counterfeiting problem

One of the major problems faced by many IP holding companies is the issue of their products being copied and being sold for a cheaper price in the markets, more so in the developing world(see concept: China's Piracy & Counterfeiting Problems). Since the country is unable to safeguard the Intellectual Property rights of many companies, Autodesk happens to be one of those to be hit by such infractions as imitators come up with cheaper versions of their products.

Slowing US economy

Autodesk has become increasingly subject to the risks arising from adverse changes in domestic and global economic and political conditions. As economic growth in the United States and other countries slows down, many customers may delay or reduce technology purchases. Since Autodesk controls a lions share of the market, they would be more prone to the market changes in US.

Competition

Autodesk controls over 85% of the market, primarily because of the fact their competitors have been focusing on a more premium market segment. Recently, Dassault and UGS have made forays into the mainstream or mid-market with product level CAD software selling in the $4,000-$5,000 per seat range, which is Autodesk’s core market.

A comparison of the sales of CAD units for the main competitors portrays Autodesk's position in the market. Competitors in 2-D CAD are quite small, with none exerting significant independent threats to Autodesk’s position.

However, one of the main development in this market has been, UGS (Siemens) has indicated that there have been over 33,000 downloads of the Solid Edge 2- D drafting tool in the four months since its introduction. While the number of downloads does not pose any major threat, UGS’s decision reflects a belief by some that basic 2-D tools will become commoditized and could be given away for free in an effort to help drive 3-D adoption.

Notes

Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki