ADSK: Seats Sales Unimportant

During the Q&A of Autodesk's most-recent quarterly conference call, Jay Vleeschhouwer of Merrill Lynch asked about declining sales of MCAD software:

Your Inventor unit count was down sequentially from a good Q1, and down somewhat year-over-year, which is similar to what PTC saw with Pro/E and what Dassault saw with the SolidWorks being down sequentially, but it was a fairly large decrease nonetheless for Inventor. 

CEO/CFO Carl Bass countered that "seats" are no longer a valid way to indicate quarterly success:

The real measure is the adoption of the software. It’s not how many seats you can sell. There are a lot of ways companies can sell more seats. The real important measure is the adoption. As I pointed out in the past, I think things like attach and renewal rates [of subscriptions/maintenance] are a really good proxy for adoption.

Based on the new metric, perhaps Autodesk marketing will not be issuing a press release when the number of Inventor seats exceeds one million, estimated to occur in April, 2010. Anyhow, about that decline in seat sales? Mr Bass again:

I hate any comparison to Pro/E, but having said that ... I think the dynamics around our products are changing. You really have to look at where those products are being sold. You know, a copy of Inventor sold in Vietnam is different than a copy of Inventor sold in Western Europe or the United States.

So, how far did the increase in Inventor sales decline? These are the numbers reported by Autodesk for combined commercial and education seats over the last five quarters, and this quarter looks quite good:

09Q2 -- 23,000
08Q3 -- 25,000
08Q4 -- 28,000
09Q1 -- 19,000
09Q2 -- 25,000

But Mr Vleeschhouwer was referring to the statement by vp of finance Sue Pirris that her company sold "10,000 commercial seats of Inventor and Moldflow." Here again is the table of quarterly sales, this time of just commercial seats:

09Q2 -- 11,000
08Q3 -- 13,400
08Q4 -- 17,000
09Q1 -- 11,500
09Q2 -- 10,000 (includes Moldflow seats, for the first time)

As I've said before, I'd love to sell 10,000 of anything in three months.

Source.

Comments

[Kevin Robinson]

I would love to hear feedback on ways, methods and ideas on measuring adoption of 3d modelers or any software for that matter.

Owners vs. users - how should it be measured?

Kevin Robinson

[Natarajan Ramamoorthy]

Hello:
You are right. Adoption is more important than seat count. It is known, in the Autodesk Reseller community, that Inventor seat count just happens because it gets 'attached' to an AutoCAD sale. Did you also know that when a customer renews his/ her AutoCAD, he is also provided Inventor either for free or for a small (read miniscule) additional price? Renewal of AutoCAD would then also indicate that Inventor is getting used 'somewhere' down the pipeline right? Ask the Inventor reseller. Even with Autodesk Subscription renewal you cannot be sure whether it was for 2D or 3D or both. The debates goes on and on and on. One thing would sure be an impartial indicator, I guess. How many job sites ask for Inventor vis a vis other CAD toolsets? A simple reflection of demand for the toolset knowledge? Fair enough?

[R.Paul Waddington]

Bass said, "You really have to look at where those products are being sold. You know, a copy of Inventor sold in Vietnam is different than a copy of Inventor sold in Western Europe or the United States."

In sales terms why? Does 1= something other than one in Vietnam?

Bass, "The real important measure is the adoption. As I pointed out in the past, I think things like attach and renewal rates [of subscriptions/maintenance] are a really good proxy for adoption."

Maybe Autodesk would like to publish the numbers of registered software. Want to work out success based on adoption, registration has to be closer to the REAL number not proxies like subscription renewals; they are open to spin in the same manner sales of Inventor Series is used to distort the facts!