QUOTE AND NEWS
TheStreet.com  8 hrs ago  Comment 
NEW YORK (TheStreet) -- Autodesk fell 2.1% to $47.32 Friday as tech stocks and the Nasdaq slid after a morning rally. Shares of the software company traded as low as $46.54 in intraday trading. About 4.9 million shares of Autodesk were traded...
Cloud Computing  Apr 4  Comment 
ZWCAD DESIGN CO., LTD. (ZWCAD DESIGN), the developer of ZWCAD+, has noticed from the blog of Ralph Grabowski, Editor of upFront.eZine Publishing, Ltd., the revelation of the intellectual property dispute between ZWCAD DESIGN...
DailyFinance  Apr 2  Comment 
SAN FRANCISCO, CA -- (Marketwired) -- 04/02/14 -- Birst Inc., the leader in Cloud BI, continues to drive the rapidly expanding market demand for cloud-based business intelligence, signing industry-leading customers, offering an expanded set...
SeekingAlpha  Mar 30  Comment 
By Markus Aarnio: Autodesk (ADSK) operates as a design software and services company worldwide. Its Platform Solutions and Emerging Business segment offers AutoCAD software. (click to enlarge) Insider selling during the last 30...
TechCrunch  Mar 20  Comment 
Toronto-based startup and online electronic design automation platform and hardware hacker community has raised $2.3 million in seed funding, the company revealed to TechCrunch today. The funding is from Boris Wertz’s Version One Ventures, and...
TechCrunch  Mar 19  Comment 
It looks like Autodesk has taken one more step forward in its bid to compete more with the likes of Adobe in the business of providing tools to the design community, but also a bigger step into the maker movement. It has acquired Creative Market a...
TechCrunch  Mar 13  Comment 
Creation and collaboration software maker Autodesk is stepping outside of its usual enterprise-grade software world and dipping its toes into consumer — or at least consumerized — world of mobile apps to launch its own mobile messaging...
SeekingAlpha  Mar 5  Comment 
We said in our January article that Autodesk (ADSK) was likely to keep surprising on the upside, as the company's two main verticals benefited from an increasingly supportive environment. Indeed, Autodesk delivered strong Q4 figures, with both...
Benzinga  Mar 3  Comment 
Shares of Autodesk (NASDAQ: ADSK) were downgraded from Neutral to Sell by Citigroup Monday morning. While analyst Walter Pritchard maintains his $36 price target, he believes the stock has run “meaningfully above...fair value.” In full year...
StreetInsider.com  Mar 3  Comment 
UPGRADES Canaccord Genuity boosts Nokia (NYSE: NOK) from Hold to Buy and moves its price target from $8 up to $10. Citi raises Kate Spade (NYSE: KATE) from Neutral to Buy. JPMorgan moves Telephone & Data Systems (NYSE: TDS) from Neutral to...




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