The CAD Insider

Wine and Dine the Journalist. It's Just Smart Marketing.

It's reputed to be the best meat in the world. Jamón Ibérico de Bellota is the most famous ham of Spain. It’s the hind leg of a little black Spanish pig that eats nothing but acorns, giving it's meat the sweetest flavor and its fat...it's supposed to melt in your mouth like butter. The whole ham, displayed proudly at carving station in the finest restaurants, can fetch as much as $2500. Could this be what is on the table in front of us at a recent Microsoft event in Barcelona? I doubted it. Probably, a lesser grade of the ham. But journalists need to impress others with their perks. So, when this story is told, it will be Jamón Ibérico de Bellota.

Iberian ham over crusty bread. Jamon Iberico de Bellota is repudiated to be the finest meat in the ham in the world. Could this be it? I had to find out.

Microsoft’s reception was in the Fira Congress Hotel in Barcelona before the introduction of the HoloLens 2. Hors d'oeuvres were offered, champagne was poured. In addition to the Jamón Ibérico, there were little baby porchetta and tiny clams...with sea foam? Nope, it's "limona" gelatin. We're loving the lavish spread.

This is about as good as it gets for the press. Living the dream, I just heard from a member of the media.  

 

Edible art. You cannot afford places that serve this kind of stuff. Thanks, journalist job!

No doubt about it, being wined and dined is one big perk of being part of the media. Maybe the biggest. Definitely one the few. We don't do it for money. You really can’t get rich writing articles.

Oh, we do get “access.” That’s a perk, insist our editors. Meet movers and shakers of the industries you cover. For example, we hope to meet the CEO of Microsoft soon. Or a front row seat. Or a chance to ask a few questions. If we are called on. If he sticks around. I sometimes take a selfie with industry VIPs – if I'm able to summon the courage.

You do to get out of the office and have an excuse to be late on deadlines, away from your gruff and non-understanding editor, the rag or blog you attend to for pennies, often late into the night, no raise in sight. Sure, even going to Cleveland and Dallas can look good under those conditions.

Living the Life  

You, on your meager journalist salary, cannot afford this life. But if they’re buying, you’re eating – and drinking.  

Strange how, after you cover a big event, every press release from the company becomes important, every new product release significant, every PR person your friend, every marketing VP a star, every executive a thought leader…  

Tens of thousands of words pour out over the course of the year. It’s the best way to stay “on top of mind” so you are sure to be invited to the company's invitation only event for “selected” press. London, Amsterdam and Brussels, Belgium, Tokyo, Singapore, Paris... Shanghai may be hinted at (if you’re good).

While they're buying White Castle burgers back home, you are in Barcelona eating porchettas.

The Bottom Line  

You might be dazzled by the opulence and the attention. It's not love, though. It's business. It's simple math: ROI, or return on investment. Smart companies know all about it. There’s some smarties at Microsoft, for sure. You don’t spend a quarter million on a press event without knowing you’ll get it back. You, dedicated media professional and blogger, are going to write it up. More than once. A normal obligation is one article or post per event. But a lavish event, an overseas flight to a bucket list destination, a five-star hotel? You are going to just churn out articles. Because there’s so much you have seen and learned, right?  

The best cons leave their victim (the "mark") with no idea of being swindled.  

The cost of a sponsored post is $2500. That’s about the cost of flying and boarding a journalist on a junket. So, why would a smart company get one article when for the same price, they could get a year's supply? 

The press crowds the bar a recent event. It's what we do. If they're pouring, we're drinking. 

The Bear Growls – Andreas Vlahinos on Generative Design

Dr. Andreas Vlahinos. (Picture courtesy of ResearchGate.)

A variety of generative design products and technologies took to the stage at the second ASSESS conference. Generative, or GD, a technology very much ascendant on the hype curve, is breathlessly described as revolutionary. It is like CAD when it was first introduced. Or like parametric design. With the hype so cranked up, each vendor has a product better than the last. And each competitor has fixed the shortcomings of the others.

Next to me is Andreas Vlahinos, the bearded bear of a man, 20 years teaching engineers at University of Colorado, a PhD from Georgia Tech and holder of three patents, is sitting next me in the audience. He shakes his head. He does not agree with a presenter, who has just made a lofty claim about generative design. There’s been a lot of that. Andreas is having none of it. When a shake of the head is insufficient, he whispers, “No way.”

I use these things, he says to me later, meaning he knows enough to not be fooled.

Andreas, who is at the same time a champion and a critic of GD, now heads his own consulting firm. His favorite generative design is GENESIS. It’s an old code (created by De Garrett Vanderplaats in 1984) but he finds it more useful and robust than the new codes being introduced. Many of the vendors of the new codes are at ASSESS, which is in danger of being overrun with GD.

Andreas has been presenting and critiquing generative design for years, pointed to a flip-flop at COFES 2016. Solid modeling, when it was introduced, let users design parts that could not be manufactured. With 3D printing, parts can be manufactured that cannot be designed. For example, the internal structures that make a part super lightweight, composed of lattices or irregular cell structures.

You can barely model it, he says. Forget about simulating it.

Years of generative design user experience, as well as an overview of the technology, make Andreas much sought after by the founders of GD startups, who present Andreas their business cards after he makes it apparent, by the nature of his questions, that he knows more than they do. They would do well to employ his services exclusively, assuring themselves of his insight and—at the same time—denying their competitors. In the race for the ultimate generative design software, one that will truly be the revolution in design, usefulness and ease of use will no doubt determine the winner, but it will take someone with true insight to determine to what measure the product has achieved in both criteria.

It’s a GD Invasion: Generative Design Takes Over a Conference

Generative design, for readers who may be emerging from an extended sleep, is the algorithmic, iterative attempt to produce shapes given nothing but design constraints. It is all the rage in CAD circles. Its champions call it the biggest change in CAD since… CAD, itself. They insist that it is—or soon will be—the way design is done, with computers and software finally rising to their full potentials, able to design, not just model. Its critics look at GD as they would a thousand monkeys banging away on typewriters and the unlikely chance that one would produce something remotely literary.

One of these monkeys is bound to write a better article than this one. Critics of generative design give monkeys a better chance of writing a Shakespeare play, a sonnet, or even a verse, than of making a useful design.

At ASSESS 2018, one presenter after another reveals a version of GD. Several GD vendors are in attendance. As a group, they form a big set of newcomers to the fledgling conference. This is only the 3^rd year of the Analysis, Simulation and Systems Engineering Software Strategies, which exists to advance the cause and broader acceptance of FEA and CFD, the mainstays of simulation. GD does not present as simulation because its computational methods are out of sight. Its solution is under the hood.

With the amount of attention being paid to the newcomers, there are more than a few attendees feeling like they are old news.

Generative Challenges

Generative design and topology optimization was theory spawned in another century and, for years, it was kept in the lab, the subject of research and the stuff of theses. It took too much power, its number-crunching so intense, only universities with mainframes and supercomputers could use it. The recent advances in PCs and GPUs have allowed a few generative design shapes to emerge from the lab. Hardware is now fast enough to handle the number of iterations GD needs to run through. However, its use as a design is still questionable. So far, we have seen a few experiments, either whimsical in form like artwork or odd, stringy shapes that look like they’ve been stretched apart like taffy. They invariably come with descriptions of how much weight they save—a most impressive weight savings, in fact, like 50 percent or more. As if that compensates for looking weird.

We hear promises that GD will tame its shapes, try to make shapes more like those prismatic shapes, easily mathematically rendered and easily machined. For now, most GD-produced shapes are so irregular that they can only be represented with triangular meshes or STL files. (Autodesk Fusion 360 goes an extra step to create geometry with “T-splines.”)

Beneath the Surface

The complexity of shape increases with internal structures, such as lattices or cellular structures. A solid part can be made much lighter—and while looking the same and preserving most of its strength—by hollowing it out. But such internal structures add so many features to the 3D model that CAD programs quickly give up. It’s hard to store the irregular geometry. It’s also hard to display the detail on the screen. A small part with an internal cell structure of your femur could have as much detail as the airplane that flew you to the conference.

Nature has had much more experience, heard at ASSESS. This section of human femur shows an irregular, space-filling structure, just about impossible for CAD to model and CAE to solve. (Picture courtesy of ASBMR Bone Curriculum.)

If modeling topology-optimized and generatively-designed shapes is difficult, the simulation of GD parts with internal structures is impossible. Modeling each little leg of a lattice or each wall of a cell, either with beam elements or thin shell elements respectively, begs for compute and storage resources that are out of this world. Think of simulating the weather by modeling air molecules.

The answer at the moment for simulation for irregularities, external or internal, maybe in being able to approximate the internal structure with a somewhat equivalent solid structure. That’s tricky. There could be equivalent mechanical properties for one type of loading or environment and not for another. It is a field of study known as “multiscaling,” with its own champions suggesting they have it all figured out. They don’t. Multiscaling become difficult as the internal composition varies, as it does in nature.*

“Nature has had much more experience,” says an ASSESS attendee.

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*In all fairness, one vendor (nTopolgy) does claim to be able to solve gradually varying internal structures but a demo was not available in time for this article.

Hexagon Buys Bricsys. Does It Matter?

 (Image courtesy of Bricsys.)

At Bricsys’ annual reseller event, which recently concluded in London and was attended by a few hundred, the expectation was to learn about the recent enhancements of BricsCAD. But, the biggest news came from a Hexagon VP, which surprised everyone by revealing that the company had been bought.

Bricsys, a smaller CAD player with big ambitions, may have sought an acquisition after futile attempts at global market expansion. Co-founder and CEO Erik De Keyser, probably hoarse from expounding advantages of BricsCAD over AutoCAD year after year, had done everything right. He had created a CAD product that combined a parity in functionality and offered it a discount price. It was a strategy lifted straight from Autodesk’s old playbook, which it used in the 80s to achieve global domination. It worked a few years later when SolidWorks displaced PTC as the MCAD leader. But, Autodesk’s user base was proving to be intractable. Why on Earth would it not work again?

Entrenched CAD user bases are like the Earth’s tectonic plates. They stay mostly intact as they move, grinding at each other and making upheavals and havoc locally. For the big picture, does it matter?

The Belgium-based Bricsys cites its leadership near home. “We’re big in Benelux,” said Don Strimbu, head of communications and perhaps the company’s lone U.S employee. The company also has some small success in Asian countries, but Bricsys goes largely unnoticed in North America and most of the world.

Bricsys leadership and strength comes almost completely from De Keyser, who helped start Bricsys in 2002. It will be hard to imagine Bricsys without him. No one has emerged as an ascender to the throne.

“I’m not going anywhere,” he reassured the dozen or so press flown in for the occasion, many of whom who may have thought their European vacations were about to end. Hexagon had not been so generous flying journalists around. De Keyser, whose career started as an architect 41 years ago, did not say how long he was planning to stick around.

Terms of the deal were not announced. Public corporations like Hexagon do not have to disclose acquisition costs unless they are “significant,” usually seen as 5 percent of overall revenue. This means any acquisition below $170 million need not be detailed. The news came with a measure of Bricsys revenue: EUR€13 million in 2017. If De Keyser was able to get two times the revenue, the Bricsys acquisition would cost Hexagon about $30 million.

Similar Deals

Hexagon AB, headquartered in Sweden, makes over $3.5 billion in revenue per year. The company, best known for its measurement hardware—surveying and metrology—would now like to be seen as “a global leader in digital solutions.” It has been bolstering its software portfolio, even if it means going away from its core interests and industries. It came as surprise that it would buy MSC Software in 2017, best known for servicing aerospace with simulation software (NASTRAN). It may just have been a bargain. MSC had been losing ground to market leader ANSYS for years. Still, Hexagon paid $834 million, its second biggest acquisition ever. Its biggest acquisition was in 2010, when it paid a whopping $2.1 billion for Intergraph, best known for its piping and process and ship CAD and GIS software.

We are also reminded of other cross-market CAD, CAM and CAE acquisitions.

• 2000: Microsoft paid over $1billion for Visio, only to lose it in a vast portfolio of products.
• 2006: Google acquired the very popular SketchUp but decided it wasn’t relevant to its core.
• 2007: Siemens AG bought UGS for its NX and Teamcenter software for $3.5 billion.
• 2011: 3D Systems bought a distressed Alibre so everyone could make precise models to be 3D printed. They don’t.
• 2012: Google sold SketchUp to Trimble.
• 2013: 3D Systems bought Geomagic so everyone could reverse engineer (copy) existing parts. Good luck with that.
• 2014: GrabCAD was acquired by 3D Systems ($100 million) but downplayed its thriving CAD user community.
• 2015: 3D Systems, additive manufacturer, bought Cimatron for subtractive manufacturing, as if to complete the picture.

“Entering into the U.S. market showed us we needed a bigger presence,” said De Keyser, who is hoping superior sales and marketing by Hexagon will make all the difference in opening up the American market. Hexagon, while headquartered in Sweden, does a substantial amount business in the U.S.

After evaluating the whole list of deals above and their effect, one has to wonder which, if any, company has increased the market share or user base of the CAD, CAM or CAE products they have acquired.

Brenda Discher Leaves Autodesk for Top Marketing Spot at Siemens PLM

Most CAD insiders know Brenda Discher from Autodesk, where she was involved with launching one mechanical design product after another, starting with Mechanical Desktop, then Inventor and most recently Fusion 360.

Discher recently made news for leaving Autodesk, where she had been for 23 years, and joining Siemens PLM. It’s a big step up for her. Siemens PLM has revenue of $4.5 billion and 19,000 people, both twice as much as Autodesk. The parent company, Siemens AG has 370,000 employees.

We caught up to her on her 44^th day at Siemens PLM. Discher had just returned from her “world tour,” executive retreat in Barcelona and Hannover-Messe, the world’s biggest trade fair, in Germany. She had been meeting many who she’ll be working with, and for, in her new role as senior vice president of Marketing and Strategy. She will be unifying products and messages for products in Siemens’ enterprise design, engineering and manufacturing portfolio, which recently added Mentor Graphics.

Discher joins a long list of veterans leaving Autodesk, including Lynn Allen, Carl Bass, Noah Cole, Amar Hanspal, Clay Helm, Heidi Hewitt, Jay Tedeschi and Joseph Wurcher, to name just a few. She doesn’t attribute leaving Autodesk to anything that happened at Autodesk, though. It’s more about opportunity at Siemens and a chance to head up the marketing effort of a large multi-national company.

An unscientific comparison of executives from engineering software firms convinced me that years of experience are seen as a positive in foreign companies. Is it possible they value the knowledge and wisdom that comes with experience? Bay Area companies, by comparison, are more likely to be impressed by youth.

Asked about the differences in corporate culture, Discher has found the people at Siemens quite welcoming. Siemens places a great value on relationships with enterprise customers.

“The enterprise selling at Siemens is best in class,” she said.

Mentor figures big in Siemens’ plans, and Discher will be doing a lot of work on Mentor’s messaging and the integration of Mentor products with the Siemens portfolio. This will often take her to Mentor’s Oregon offices. She had transplanted herself to Oregon to work with Autodesk’s manufacturing team in Lake Oswego. She was resisting moving to San Francisco to be closer to where most of Autodesk management works.

Her heart always has been in Michigan. The change to Siemens has given her a chance to find a home base again. Although head of Siemens PLM is listed in Plano, Texas, most of the executives now work in the Livonia office, Discher said.

Bombs Drop in San Francisco: Carl Bass Disses Onshape

Carl Bass, who retired from his CEO post at Autodesk early in 2017, was lured away from his Berkeley workshops to speak at TEC Talk. It meant time away from racing his go-cart with an onboard neural network, an electrified Shelby GT, and a host of other projects. He would only do it if he didn’t have to prepare. It helped that Ron Fritz, CEO of Tech Soft 3D, the company that holds the event, was an old friend (Fritz took over the HOOPS Summit after Bass left for Autodesk) and that this year’s TEK Talk was taking place nearby, on the San Francisco waterfront.

Carl Bass, former CEO of Autodesk (left), and Ron Fritz, CEO of Tech Soft 3D, at TEK Talk in San Francisco. The bombs are about to drop.

The event is usually held in Boston because "that's where our customers are," said Fritz. To be sure, East Coast players are largely absent from the West Coast event. TEC Talk is held before the HOOPS Summit. They should have come because not doing so meant that everyone could talk about them. And they did. Onshape, in particular, took it on the chin.

 

And Here’s Carl…

The headline event, Carl Bass’s talk, was well received. Without Hirschtick, Heppelemann, Bernard, Bassi or a Bentley brother, Bass was the only member of CAD royalty in attendance. Retired but still on the Autodesk board of directors, Bass is freer to talk about his time at the company. It was hard to be a CEO of such a big, sprawling organization, he said. People expected you to be omniscient. “My Australia team could not show up for work for two weeks, and I'd never know about it.”

Bass was critical of the CAD industry for not having done much of anything new in 25 years—though he had led the CAD market leader for 11 of those years. He talked about asking a group of designers what CAD software they use and remarked that their CAD applications were "older than they are. "According to Bass, the last interesting thing that happened to CAD was SOLIDWORKS—and that was 25 years ago.

Could Bass have possibly forgotten about Onshape—and Autodesk's own Fusion 360—both of which are more recent cloud-based CAD applications?

"What about Onshape?" I have to ask.

Big mistake. I shouldn’t provoke Bass. To do so is to risk becoming the story rather than reporting on one. A journalistic no-no.

Basss swings without hesitation. Onshape, according to Bass, is a "half-assed imitation of SOLIDWORKS that happens to run on the cloud and is a classic example of the CAD industry worrying about technical problems rather than the needs of their users. It doesn’t solve a single problem for any customer,” he continued "and therefore, they have had no traction in what...five years?"

Bass has a lot of respect for what the founders (including Hirschtick) did with SOLIDWORKS, offering a big chunk of what Pro/ENGINEER could do at the price of AutoCAD, which ran on $3,000 computers. That mattered. This [Onshape] doesn’t matter.

Bass wants to talk about more interesting things, like machine learning,and said, "Onshape is not one of them."

It was another bombshell from the ever-spontaneous Bass. It was not the first time he has taken on the competition publicly. Perhaps most famous was his anti-PLM rap delivered in 2007 (only to announce Autodesk 360 for PLM four years later). His non scripted remarks and avuncular attitude made him popular with the media, which is accustomed to carefully prepared remarks and marketing-heavy messages. No target is too large for Bass. He has even slammed President Trump on Twitter.

 

Comments from the Industry

Although someone jumps in to defends Onshape, outing himself as a paying customer, other attendees will later fall in line with Bass’s assessment of Onshape’s lack of traction. They don’t think it’s catching on—at least not fast enough. Hats off to the great Jon Hirschtick for trying, though.

Reached for comment was Autodesk present CEO, Andrew Anagnost, who, while choosing not to comment specifically on what Bass had said, seemed to agree in principle. SOLIDWORKS CEO Gian Paulo Bassi, ever the gentleman, declined to comment on the competition. It was a chance for Jon Hirschtick to reveal the actual numbers of paid customers, but Hirschtick chose to say only that he had "thousands of customers."

Well, maybe Hirschtick is waiting for a million customers before Onshape makes the announcement.

 

Patience…

Despite competition and the media’s impatience, Hirschtick gives little sign that he is in any hurry. Perhaps he is biding his time, knowing that in time Onshape will gather up paid users and is using that time. No doubt he is using this time to make Onshape more robust, increase the company’s partners, and make Onshape the easy-to-get/easy-to-use CAD program for every engineer unencumbered by—or bogged down by—traditional CAD systems. It's the same let's-change-habits, profit-can-wait approach used with great success by Jeff Bezos of Amazon. Amazon endured losses for many years, but managed to make itself so convenient, so habit-forming that traditional shopping establishments now all seem at risk.

Onshape Not Making a Profit Is Crazy. Like a Fox

For the first few years of Amazon.com’s existence, it mostly sold books. Although it was successful in muscling into the book market, putting regular bookstores out of business, Americans were at the same time losing interest in reading books. Amazon was suffering staggering losses. By any conventional rules of business focusing on profit, the collapse of online company was inevitable. How could Jeff Bezos, Amazon CEO, keep his job after squandering so much investor money?

Bezos was not interested in making a profit. Not much. Not right away. Was he crazy? By his reckoning, Amazon was not just going to sell books. Books were the gateway drug. While selling books, Amazon worked out all the kinks in online selling and delivery. From buying books to buying videos, games, electronics, clothes… What can’t they sell?

Amazon was all about changing the way America shopped. A nation new to online shopping, once afraid to give credit card information online, got to trust Amazon. Today, it makes billions of dollars and is projected to have half of all online retail sales in 2017. Amazon has even started entering people’s houses to leave packages.

Jeff Bezos, Amazon CEO, left, kept making his online store bigger and more convenient until America realized Amazon was the way to shop. Jon Hirschtick, Onshape CEO, keeps making Onshape more capable while he waits for CAD users to realize that CAD, too, can be online and more convenient. (Images courtesy of their Twitter pages.)

In our business, Amazon has a parallel in Onshape. Here was this CAD program you could use just by setting up a free account. There wasn’t even anything to download. You could work with others, share and collaborate by sending someone a URL. It all worked over the Internet and on any mobile device. It was fast enough, certainly faster than you expected from a program operating over the air instead of a CPU and local hard drive. Sure, it couldn’t do everything your old workhorse of a CAD program could do, but you’d keep it around as a companion CAD program. It was cute how you could show off your work on an iPhone. How cool is that, kids?

Over time, Onshape, the cute and easy CAD program, was becoming more powerful. Every three weeks new features and capabilities were introduced. Surprise, you could do real work on it. Maybe parking your models and sharing them with this cloud business wasn’t so bad after all. At times it proved to be downright handy. Instead of working from the office, you could work anywhere. Wherever you were, there was your model–the latest one. How convenient.

“For three quarters of our users, Onshape is the primary CAD system,” said Jon Hirschtick, Onshape CEO.

So, it’s happening. CAD user habits are changing, just like shoppers’ habits. A user base once afraid of the Internet who fretted about files being in the cloud and getting into the wrong hands, and were convinced the speed and power they needed was only possible with a hulking workstation and their CAD program, the last bastion of ancient software practices—locked in the office, expensive, hard to teach, tough to maintain—while everything else they used was an app on their smartphone, have begun to embrace Onshape.

Damn. Maybe it was never about being a “companion” CAD program happy to coexist in the shadow of workhorses. While engineers got more used to working online and with online tools, they were only going to eventually progress to expect the same of their CAD programs.

Hirschtick is flattered at being compared to Bezos, now the richest person in the world, but he shrugs it off. Maybe changing the habits of engineers doesn’t compare to changing how we shop. But when you are telling the grand kids about the good old days, when you used Microsoft Windows, workstations sat on desks, every year you had to shut down while the IT guys installed the upgrades and you had to pay thousands of dollars for your design software... you can think of Hirschtick.

Facing the Storm as Autodesk Stock Plunges

Autodesk’s stock looks like it fell off the edge. Share prices were down 20% this morning. This after the recent Q3 announcement that the company lost $120 million.

You’ll be feeling bad if you are invested in Autodesk. You’ll be feeling worse if you were one of the 1150 Autodeskers being laid off. They were told last week.

One of them tries to put a brave face. She’s doing fine, she says. She is lifting her spirits with a friend over a salad at a trendy Hayes St. eatery in San Francsico. “But did they have to do it right before Christmas?”

Captain Andrew at the Wheel

The third quarter of FY2018 was like many before it. It was the 10th straight quarter of losses for Autodesk after their dramatic change of business model, from perpetual to term-licensing. But for some reason (was it the layoff?), it triggered the storm.

In the fierceness of a storm, it is hard to keep in mind that calmer waters, a better world, awaits on the other side.

I imagine Carl Bass, CEO of Autodesk until June of this year, hearing Andrew Anagnost’s calls to turn the ship this way or that, finally saying here “You take the wheel’ and stepping aside.

Upon taking the wheel as the new CEO, Andrew has sailed full into the storm. Resolute at the helm, he is clear in his direction. There may be some damage, but the path to take is clear. There is no time to waste, no sugar with the medicine. Users have to wake up and face the storm. Resellers, too. Employees who enjoyed jobs chasing dreams, who forgot their mission, those who grumble on the new direction… over the side they go.

Through the ship is being battered, it hasn’t sprung a leak. The user base is still the biggest paying CAD userbase in the world. Some of the users may be grumbling (they always do) but there is no indication of becoming a mass migration. Autodesk applications are still gold, the currency of the industries they serve, tried and true. User data is safe. The applications keep getting better and no other CAD company has been shown more ability to keep up with fast moving technology. Users understand that Autodesk will be there for them, supplying current needs and needs they have yet to realize. Try as they might, no company has been able to erode Autodesk’s market dominance in a significant way. The foreign firms that have long claimed they can do the same for less are plucking the few users who have jumped off the ship, mad they no longer had a cabin in perpetuity. Bigger CAD firms that have had to realize they can’t lure away Autodesk users, and can only, at best, grow their business alongside.

 

Autodesk Layoffs May Be Its Biggest Ever

Laid off office workers. Two on the end have received a good severance package. (Stock photo).

Autodesk just announced that it will reduce its workforce by 1,150, or around 13%.

The bomb was dropped in the company’s quarterly financial call, when we also found out it had lost $120 million.

While not specific about what divisions, programs or locations will suffer, new CEO Andrew Anagnost announced the restructuring from “a position of strength,” defending upcoming strategic cuts against “peanut butter cuts,” which are cuts applied evenly across the whole company.

The restructuring plan is expected to cost anywhere from $135 to $145 million in the next quarter. How much of that will be severance pay is not known.

The last big layoff at Autodesk was in February of 2016 when the company, under Carl Bass, announced a 10% workforce reduction and let go 925 people.

Sales people will be affected, an expected result of more online sales. Term licensing and automatic renewals, more common in software sales and now in CAD, lessen the need for human intervention.

Autodesk’s army of resellers will also be feeling a pinch. This should be no surprise, says Andrew. Our resellers have been told there to expect change. Everyone knows we are going for a 50-50 mix. [50% direct sales, 50% reseller sales.]

The $120 million loss in the last 3 months makes 10 straight quarters in the red. Financial analysts have been forgiving of Autodesk, even optimistic, cutting the company a lot of slack, figuring it will one day catch up to the big pot of deferred revenue created in the shift from perpetual to term licensing. But is their patience running out? In today's Q&A, one analyst finally asked when the company expects finally expects to be coming back to profitability.

“We see FY 2018 as the trough,” was the response.

Autodesk is predicting a rise from the trough the following year. They didn’t mention Adobe this time, but the need to be like Adobe is obvious. Adobe dropped perpetual for term licensing and it took 11 quarters before revenue caught up. However, unlike Autodesk, Adobe managed to stay profitable every quarter.

Autodesk took a 12% plunge immediately after the announcement.

Revenue was $515 million, an increase of 5% over the same period last year.

While revenue was flat in the US and the rest of the Western Hemisphere, but Asia Pacific (APAC) region increased by 8%. Another increase like that will put APAC in the lead, passing the Americas.

Everyone have a great day, concluded the moderator.

You Better Start Believing in Industrial Revolutions, Dear Reader…You’re In One

 

From Pirates of the Caribbean Curse of the Black Pearl, 2003.

IoT, 3D printing, robots, AI, digital twins, big data --it’s all happening now. In the midst of the flurry of activity, it’s hard to get a sense of it, but historians will look back on this time as the Fourth Industrial Revolution.

The First Industrial Revolution, connected with the steam engine, made rural people come to the cities to work  in the 18th and 19th centuries.

The Second Industrial Revolution, driven by the internal combustion engine and energy, took place before World War 1. For what electricity didn’t move, oil did.

The Third Industrial Revolution was driven by the computer, when computers got personal and the Internet. It started in the 1980’s.

Just when we had it all figured out, the Fourth Industrial revolution has changed all the rules. It is likely to change our jobs -- if not take them -- and force more than a few of us into early retirement. The degrees we got that guaranteed jobs for life are under threat from artificial intelligence that can think faster and robots that can work harder.

It’s not fair. So cried victim of previous industrial revolutions. The Luddites, skilled textile workers, rallied against the machines that took away their livelihood in the First Industrial revolution. It did not go well for them. Or the assembly workers displaced by robots. Or the toll takers replaced by FastPass. Soon enough, Uber drivers replaced with self driving cars.

Ah, who needs humans, anyway? Oh, I forgot. Humans do. Someone has to watch the cooking shows. And go to all the restaurants.

For Further Reading and Watching:

 

The Fourth Industrial Revolution: What it Means, How to Respond, the World Economic Forum, 2016