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21 Aug 2009

AutoCAD 2010 for 50,000 Rubles ($1500)? The New Autodesk Programme in Russia

Anastasia MorozovaIn May 2009 Autodesk launched a six-month program “Solutions Scaled to Your Business”, which Autodesk describes as assistance to Russian companies in overcoming the consequences of the global financial crisis. Intending to get insight into the core of the new program. David Levin, the editor-in-chief of the isicad.ru portal, set himself a pleasant task to discuss the issue with Anastasia Morozova, Field Marketing Area Team Manager, Autodesk Russia and CIS.


Anastasia, it seems that Autodesk is making a useful step towards market reality, in particular, on the Russian market, but I need much more details to catch what exactly this step is about.

Note that until now Russian clients of Autodesk were continuously and rather actively buying and using our products. Since 2005, when Alexander Tasev became the Head of Autodesk CIS, sales increased by a factor of 12, not to mention expanding partner network and the volume and quality of product localisation.

I am sure that in these difficult times potential clients will be very interested in newly emerged good opportunities.

First of all, there are several steps.

Obviously, CAD users always had variety of needs and approaches to automation. The crisis made the following two groups more pronounced.

The first companies objectively have modest financial possibilities or still do not fully understand the decisive role of the cutting-edge information technology in developing manufacturing and advancing their business. Their primary goal at the moment is to license the available software products as cheaply as possible to reduce the risks.

Others are able and are prepared to leap forward because they understand that investments in CAD can considerably cut down the costs at other stages of product cycle and returns will be several times higher. With such solid approach they are in need of professional consulting and implementation services.

In other words, we should help the first group save, and enable the other group to make highly efficient investments in CAD. Do you agree?


There is something about it… To the modest you offer “state-by-stage licensing” (supposedly, the meaning is clear) and to the progressive – something posh: “enhancing efficiency”? BTW, in what sense: performance, effectiveness, capability, capacity, processing power, productivity…?

The industries have no problems whatsoever understanding what enhancement of efficiency means. All together, a Russian word ïðîèçâîäèòåëüíîñòü (“proizvoditelnost”) combines all English definitions mentioned by you, without any conflict.

As for “posh”; there is nothing posh… We certainly know that correctly implemented CAD solutions boost proizvoditelnost. But only if solutions are implemented correctly: not arbitrary injected in chaos but when they determine well-thought, optimal processes at a modern enterprise!


Wonderful, even great words, that are, however, universally fair at any time, when it comes to implementing any vendors’ solutions. What exactly Autodesk can offer for those wishing to and capable of radically enhancing efficiency?

I’d like to emphasize that organising lifecycle processes at a modern enterprise is a hard task not only for the manufacturers but also for many product distributors (our company uses the term “partners”). Therefore we select strictly the best authorised partners who are able to provide solid consulting, assist in integrating the systems in the working environment of the enterprise and organise and optimize the work process. Such partners are granted the status of a “Premier-Partner” and are entitled to provide “Premium-Service” to their clients, build on their own knowledge and experience as well as on the techniques of the most efficient use of software products, developed by Autodesk.

So, if a company buys one of the leading industry products - AutoCAD Inventor Suite, AutoCAD Revit Architecture Suite or AutoCAD Civil 3D, it gets complimentary Premium-Service: a special consulting and implementation services from the Premier-Partner that sold the product. Buying one workstation gets 3 hours of Premium-Service. If the client is big and buys 10-20-100 workstations, then the service hours increase to 30-60-300. As part of the special offer, launched on 1st May, Autodesk effectively pays the cost of those services for the company.

Additional hours of Premium-Service can be also bought separately, without any special offer. It is particularly important for those clients who already bought licences and now wish to increase efficiency of using the existing CAD, which, you would agree, is also quite essential today.


So you want to stimulate progressive clients buying a considerable batch of products from not simply a legitimate, authorised seller but rather from a seller that is capable to provide a truly efficient implementation. If a customer understands that he should buy well-established, efficient processes rather than just products, the customer will see that dealing with a Premier-Partner, he gets a significant discount. Can you estimate the discount?

Really, civilised buyers tend to get effective system implementation and fully understand the price difference in comparison with the price of a pile of boxes, even if they contain the most outstanding products. Certainly, the difference depends greatly on various quality and quantity factors. Straightforward calculations, based on the example I quoted earlier, show that the ultimate buyer’s benefit in money units varies from 3000 to 30000 euro… In reality it is much higher because efficient use of CAD enables considerable reduction of investments in both product design and manufacturing...


I personally think that the benefits can be endless: implementation can simply never happen without proper competences.

Is it possible to help those progressive and reasonable, decisive buyers who are not prepared to make considerable investments outright due to various objective or subjective reasons?

We offer various CAD investment scenarios. In some cases, it will be cost-efficient to start with purchasing a package of annual licenses at 40% of the price of a perpetual license. Additionally, customers can buy Premier-Service, so with minimum investments they are able to immediately implement the right and effective design process. Upon buying the first annual licence, an enterprise has a choice: to buy a perpetual licence at 70% of its price or buy another annual licence at 40%. Buying the third annual licence, again at 40% of the price of the commercial version, make the licence perpetual. Although the scheme looks like an installment program, it has two attractive advantages. First, the client is totally free to choose the future investments. After the first year of use he is not obligated to make the second payment of the same size. Depending on his needs, the client can cut down or increase the number of workstations. The second important advantage is that at the end the enterprise pays less.


I am afraid all this can mix up unsuspecting buyers?

Well, let me give you a specific example. Under the annual licence program, each year a company can buy the latest software version or the next-to-last version. Taking about Inventor, now one can buy 2009 and 2010, the latest version.

Suppose, you decided to expand your business by providing design-to-order and bought an annual licence for Inventor (the prospects of business are unknown and may be you will never need the full version). You paid 40% of its price. Assessing the project as successful, next year you again bought an annual licence but this time for Inventor 2011, and a year later -Inventor 2012. So by paying 120% of the cost for three years you got a perpetual license. Everything seems rather obvious...

On the other hand, without the annual licence program, if you wanted to get Inventor 2012 you would have bought Inventor 2010 + Subscription + Subscription renewal. This sum exceeds three annual licences. So, by buying annual licences the enterprise not only “time-phase” the investments, but generally reduces them. Understandable?

I see a possible objection from some customers: “What is we buy Autodesk Inventor 2010 now and will not update it to 2012 version?” You can buy and not update – the choice is yours… Firstly, the rate is still only 6% per annum; no bank will offer such a rate, even below the inflation level. Secondly, the calculations that I gave as an example, are for those clients that always want to be the most productive and use all available opportunities to move forward.


In a nutshell: “enhancing of efficiency - for the tough guys” does not at all exclude stage-by-stage licencing?

Certainly not. Tough guys also have the right to chose… And, as we already discussed, the program called “Stage-by-Stage Licencing” has its own specific features aimed at those who have conservative attitude to investing in CAD and / or do not have realistic possibilities for large strategic investments.

Let’s not forget that there are teams formed for a particular project, which can last just one or two years…


Why do you call it a Promo-Program? What kind of a promo is that, designed for three years minimum?

If fact, talking about annual licences, these are not temporary promo but have new, permanent positions in our price-list. Similarly to other new products that appear there. This year, for instance, the price-list includes Autodesk Inventor Tooling for planning workloading, which we started selling in CIS.


Autodesk took a noticeable technological and commercial step by releasing AutoCAD 2010. However, a large part of your users may find its relatively advanced features unnecessary or at least not justifying the expenses…

Perhaps you overreacted about the large part... All added features enable completing the design tasks faster and with better quality. Is there any company for which such tasks are not important??? On the other hand, quite often software updating requires computer updating, which increases the necessary investments. In view of a difficult economic situation, we also thought about this.

From 1st May we are offering AutoCAD 2008 and AutoCAD LT 2008 at the price which is considerably lower than of the current 2010 version. On the one hand, it will help radically reduce the burden of initial CAD investments; on the other – it gives an opportunity to work with the licenced, reliable and the most popular software. Functional capabilities of those products can become the first, but entirely effective stage in the process of design licensing and optimization. The next step is updating or cross-updating for 2010 and, in future, for newer versions…

Autodesk is resuming production of AutoCAD 2008 and AutoCAD LT 2008 also because they provide the most affordable solution to the problem of format compatibility and enable correct data exchange among individual experts using the native .dwg format.

Data compatibility is a pressing issue, especially lately. Our site has a hot line, where we get questions from the companies that were supposed to receive files in .dwg but for some reason the files cannot be opened or display an error. Checks show that the contractor used AutoCAD “substitutes”... We hope that a more affordable AutoCAD LT 2008 will also help resolving this problem.


If I do not hear concrete price examples now, I will not be able to fully understand and will not completely believe you. Certainly, prices cannot be unified for all sales sources, lot sizes, delivery conditions and other factors…, so let’s look at some averaged but real examples.

The recommended AutoCAD 2010 price is around 129 000 Rubles (RUR), i.e. ~$4000. Thus, an annual licence can cost about 52 000 RUR (~$1600).

AutoCAD 2008 costs approximately 95 000 RUR (~$3000), while AutoCAD LT 2008 – around 44 000 RUR (~$1375).

Let me remind you that Autodesk’s authorisation is not mandatory for selling AutoCAD LT; which means that you can ask any local company supplying software of IT about the product.

The prices I quoted are the recommended prices that include VAT and euro exchange rate but do not reflect the policy and tactics of particular partners, so real prices can fluctuate both ways.


The program was masterminded in California as a global Autodesk campaign or you thought it all up yourselves?

Annual licences are already being sold in several countries throughout the world and I think that the spread of this sales tool will be expanding.

As for resuming production of 2008 versions, it is our initiative and a local project. Of course, it is implemented with the help from many experts in Europe and America, not to mention our office. We very much appreciate the work they did and their support. To launch a new product at a plant is not so easy; I have firsthand knowledge of this.

Premier-Service is also our local initiative. Russia is a country of brilliant engineers that are heavily restricted by the tools and technology. Something had to be done about it. We intend to popularise implementation and service, and also make them affordable and popular. We want to show that CAD combined with correct processes and technology can yield much more that is currently available. Efficiency, quality, innovations... Too much talking while something must be done to get the ball rolling... It is obvious that Premier-Service is not a panacea but it’s a movement forward and we consider it a very important step.


So what, both the genius and ordinary, engineers should do to take part in your new program?

They need to fill an application at out site www.autodesk.ru/scale. We will respond to it and the specialists of the authorised partners, who have in-depth knowledge of the customer’s industry and can give an expert’s assessment of the products, will help choose the best solution for the applicant enterprise.


Anastasia, now it’s me who is going to say something posh. With better understanding of the essence of your new program, I would most like to believe that this program makes considerable contribution to the development of Russian industry when a flexible and rational attitude to the strategy, tactics and resources is necessary.

On the other hand, perhaps today customers already know without you that qualified consulting is an inseparable element of any efficient implementation and sometimes it is more expedient to start with easier versions, and state-by-stage investment schemes are kind of standard schemes for doing business intelligently?

Unfortunately Russian market still underestimates consulting aimed at truly efficient implementation of integrated automation processes. It is often thought that the costs for qualified system implementation can be avoided, or reduced to a bare minimum, or postponed. Practically always it leads to low efficiency of CAD use, which means partial or even total freezing of already made investments, which ultimately results in diminished competitive ability… The same is often true for the state-by-stage solution implementation and stage-by-stage investment schemes.

Quite often implementation is replaced with simple training in product functions. This is completely wrong. Exploiting software capabilities at particular workstations is undoubtedly useful and valuable, but it is just a small part of what correct implementation can yield. The point is to implement efficient processes and technology, which is the most difficult. We introduced Premier-Service and selected Premier-Partners in order to stimulate such implementation. I believe that specific parameters of our program and its promotion encourage development of the Russian market culture: they make the market more efficient. By the way, such impact on the market benefits all vendors, including direct competitors of Autodesk.


I have no doubts that along with “Solutions Scaled to…”, the marketing thought of Autodesk-CIS will generate some other noticeable actions this year, for instance, “3D Forum – to every hamlet”… In short, what are your immediate creative plans?

You are very close to the truth, in fact. We are planning an event which will enable engineers and architects in dozens of towns to get familiar with new products and technologies. We considered the real state of things and found a possibility to bring new knowledge to “each house”. We will employ state-of-the-art technologies … but let it be the topic of our next conversation…


Thank you. Shall we talk again in fall?

OK.


After isicad.ru interviewed Anastasia Morozova, Autodesk-CIS announced organizing the largest Autodesk-Forum in 40 cities across Russia and a new series of test-drives. It is estimated that the events will be attended by more than 10 000 professionals. Registration is opened at www.forum.autodesk.ru.


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