Autodesk, Inc.

views updated May 29 2018

Autodesk, Inc.

111 McInnis Parkway
San Rafael, California 94903 U.S.A.
Telephone: (415) 507-5000
Toll Free: (800) 879-4233
Fax: (415) 507-5100
Web site:http://usa.autodesk.com

Public Company
Incorporated: 1982
Employees: 4,813
Sales: $1.83 billion (2007)
Stock Exchanges: NASDAQ
Ticker Symbol: ADSK
NAIC: 511210 Software Publishers

ORIGINS

AUTODESK’S PRODUCTS

1992–2006: THE LEGACY OF CHIEF EXECUTIVE CAROL BARTZ

PRINCIPAL SUBSIDIARIES

PRINCIPAL OPERATING UNITS

PRINCIPAL COMPETITORS

ORIGINS

Autodesk was founded in 1982 by computer programmer and entrepreneur John Walker, whom PC Week columnist Jesse Berst described as “the most brilliant and the most bizarre person I’ve ever met.” Walker acquired the software for a computer-aided design program known as AutoCAD from inventor Michael Riddle, in exchange for $10 million in royalties. The following year, his new company, Autodesk, introduced the AutoCAD program to the public. As the market for personal computers and software escalated, Autodesk experienced rapid success. During this time, Autodesk established a unique policy of eschewing conventional management personnel, experienced in business strategies and financial planning, in favor of a management team consisting of computer programmers such as Walker.

In 1985, Walker took Autodesk public, and, the following year, he left his position in the company’s management in order to pursue his interest in programming. As a result, Walker developed an AutoCAD supplement designed specifically for the construction industry. The supplement, marketed through Autodesk, allowed engineers to generate price quotes and construction schedules from information available in their designs. By this time, 40,000 AutoCAD packages had been shipped for sale.

In the summer of 1987, Autodesk initiated a second issuing of stock, offering 2.5 million shares at $24 per share. The capital generated from this offering enabled the company to eliminate some of its debts. In 1988, Autodesk had assets of over $100 million in cash and securities, while revenues increased 40 percent over the previous year. By 1989, Autodesk was enjoying a 60 percent share of the market for personal computer-aided design software, with sales worth $117 million.

By the early 1990s, growth at Autodesk, and the company’s dependence on AutoCAD, necessitated a restructuring of the company’s operations. Five separate support units were created, each overseeing one of the company’s five main product lines, all of which were designed for use with AutoCAD. Moreover, the company purchased a 20 percent equity interest in Ithaca Software, producer of the Hoops Graphics System. Hoops Graphics proved valuable when integrated with AutoCAD, resulting in a more user-friendly product, and Autodesk would acquire Ithaca Software in its entirety in August 1993.

In April 1992, Carol A. Bartz was named CEO of Autodesk. Bartz, who had a bachelor’s degree in computer science from the University of Wisconsin and had served as a vice-president at Sun Microsystems, became one of only two women to head a major U.S. company in the high technology industry. In addition to her duties at Autodesk, Bartz was a board member of Cadence Design Systems, Inc., and Airtouch Communications, Inc., a company owned by Pacific Telesis.

Upon her appointment at Autodesk, Bartz developed three primary goals for the company: building Autodesk into a $1 billion company by 1999, decreasing the company’s reliance on AutoCAD as the primary source of revenue, and moving the company into computer-aided manufacturing in addition to design. Bartz also reorganized the company, imposing a more traditional management structure, building a new executive team, and working with software engineers to further tailor AutoCAD to the needs of the public.

In order to sharpen its focus on design automation, Autodesk divested its interests in AMIX, an electronic shopping network, and Xanadu, a database software company, while acquiring Micro Engineering Solutions, a firm concerned with computer modeling software. In 1993, Autodesk purchased the net assets of Wood-bourne, Inc., an acquisition which brought Wood-bourne’s solid-modeling technology to Autodesk.

That year, a lien was placed on $5 million of Autodesk’s fourth-quarter profits, as a result of a class-action suit filed by stockholders. The plaintiffs had purchased stock in the company between May 6, 1991, and January 30, 1992, and, when Autodesk experienced a 35 percent drop in earnings in the second quarter of 1992, they filed the lawsuit. Although Autodesk maintained that the suit was without merit, the company paid a settlement in an attempt to curb litigation costs. In fiscal 1994, Autodesk expended over $70 million for the repurchase of common stock in order to avoid dilution caused by employee stock plans.

John Walker officially severed his ties with Autodesk in 1994, in favor of engineering special projects in Switzerland. By that time, Autodesk had shipped one million software packages worldwide, and AutoCAD remained the primary source of company revenue. Sales of AutoCAD and AutoCAD updates accounted for 85 percent of Autodesk’s revenues in 1994, while net revenues reached $405.6 million, with foreign sales accounting for 58 percent of those revenues.

COMPANY PERSPECTIVES

Worldwide business trends are impacting our customers in real and important ways. Globalization, increasing demand for consumer choice, sustainability, the worldwide development of buildings and infrastructure, and an increasing need to keep data digital create tremendous pressure to improve productivity and profitability while increasing innovation. Our customers are seeking differentiation through design. Our products provide the competitive advantage customers need to succeed in a global economy.

AUTODESK’S PRODUCTS

Nevertheless, Autodesk had developed several other product lines, including: Generic CADD; AutoCAD LT, a CAD program compatible with Windows; AutoSk-etch, a two-dimensional drafting program available with either DOS or Windows compatibility; AutoCAD Designer, a program enabling the user to perform solid-model drafting; Advanced Modeling Extension 2.1, another solid-modeling program, which interfaced with AutoCAD; Generic CADD 6.1, a design and drafting program compatible with AutoCAD files; and AutoCAD Data Extension, a program allowing the user to work with multiple drawings concurrently. The company also developed AutoSurf, a program based on AutoCAD Release 12, for two- and three-dimensional design; Autodesk Manufacturingexpert, another program incorporating AutoCAD Release 12; Aemulus and Aemulusmf, allowing interchange between AutoCAD and CADAM files; AutoCAD IGES Translator 5.1, a CAD translation program; Home Series, a program for use in home design drafting; 3D Studio, a program with a variety of modeling and animation applications; and Autovision, a program interactive with AutoCAD Release 12 which enabled users to produce photorealistic still renderings. A pioneer in the exploration of the potential of virtual reality, Autodesk also offered Animator Pro, 3-D Studio, and a Cyperspace Developer Kit.

Autodesk’s products had applications in a wide variety of fields, including architecture, engineering, construction, geographic information systems, mechanical design, and videography. Among Autodesk’s major clients were Chevron, Kohler, Sony Pictures, and Japan’s Nippon Telegraph and Telephone Corporation. Chevron used a combined package of AutoCAD Release 12, ADE software, and an Autodesk Geological Information System program to monitor its assets and leases on land and offshore; Kohler used AutoCAD, AutoSurf, and AutoMill to design plumbing fixtures such as bathtubs, toilets, and sinks; and Sony Pictures employed 3D Studio in plotting camera angles prior to actual filming. In addition, Autodesk earned a $550 million contract to provide CAD 2 to the Naval Facilities Engineering Command.

Autodesk continued to cooperate with other software purveyors, forming alliances in which the companies involved produced programs while maintaining their autonomy. In 1993, Autodesk developed a means of using AutoCAD Release 12 on an IBM OS/2 2.0 operating system, and, the following year, Autodesk announced a cooperative venture with Xaos Tools, Inc., intended to produce image-processing software compatible with Autodesk’s 3D Studio Release 3. Autodesk also announced the release of AutoSketch 2 for Microsoft’s Windows. Other joint ventures included an agreement with Microsoft to develop Microsoft-compatible CAD programs for integration into Microsoft Office; the formation of a consulting agreement with UGC Consulting, a firm knowledgeable about the Geological Information Systems market; and an agreement with Silicon Graphics to jointly develop and release a program integrating a rendering feature of Autodesk’s 3D Studio Release 3 into a Silicon Graphics program as well as to develop a Silicon Graphics–compatible edition of Autodesk’s AutoVision.

In 1994, Autodesk operated approximately 750 Training Centers worldwide for the purpose of educating users in the applications of AutoCAD and other Autodesk software. Autodesk depended upon a network of dealers, distributors, and direct sales to disseminate its products, and devised a system of cooperation with third-party software developers. This system, called AutoCAD Development system, or ADS, was devised in 1990 and was structured to encourage independent software developers to create add-on programs for Autodesk products and new applications for Autodesk’s technologies. Over 2,000 independent developers worked to create specialized applications using Autodesk programs in 1994.

In the mid-1990s, Autodesk owned no real property; all facilities for management, product development, marketing, and production activities throughout the United States, Europe, and Asia were leased, including the facilities in Neuchâtel, Switzerland, opened in 1993 at an expense of $1.4 million, in order to concentrate Autodesk’s European production. Although Autodesk owned most of the equipment used in its business, the company’s intellectual property and its network of programming and business talent were regarded as its chief assets.

KEY DATES

1982:: Computer programmer John Walker founds Autodesk.
1985:: Autodesk completes its initial public offering of stock.
1989:: Autodesk controls 60 percent of the market for computer-aided design (CAD) software.
1992:: Carol A. Bartz is named chief executive officer, a position she will hold for 14 years.
1994:: The release of AutoCAD 13.0 exacts a financial toll on Autodesk.
2001:: The company’s online subscription service debuts.
2005:: Sales eclipse $1 billion.
2006:: Bartz resigns as chief executive officer, making room for Autodesk’s chief operating officer, Carl Bass.

Autodesk, like many other software companies, was challenged by the effects of software piracy in the early 1990s. In order to combat this practice, Autodesk joined forces with other high technology firms to form several regional organizations, including the Canadian Alliance Against Software Theft (CAAST) and the Business Software Alliance (BSA). The company prevailed in litigation to protect its copyrights, including a 1994 suit against Cadisys Corporation, the result of which was a $100,000 settlement in Autodesk’s favor on May 23, 1994.

1992–2006: THE LEGACY OF CHIEF EXECUTIVE CAROL BARTZ

The success of Autodesk during its first decade rested largely on AutoCAD. The software defined the company and propelled its financial growth, producing profit margins close to 30 percent in the years following its introduction. Carol Bartz was well aware of the importance of AutoCAD to the company’s coffers, but she also realized Autodesk needed to lessen its dependence on the engineers and architects who purchased the company’s software. Autodesk was, in her mind, a one-product company, and her primary aim was to shed it of its defining characteristic. Bartz wanted to pursue new markets and to attract new customers, which would free the company from relying on updates of AutoCAD to fuel its revenue growth and lead it toward the $1 billion revenue goal she set for the end of the decade. Bartz missed her financial target, but not by much, distinguishing herself as one of the technology sector’s bright stars during her tenure. She led the company for 14 years, orchestrating a fivefold increase in revenues that left an indelible mark on the history of Autodesk.

Bartz’s fears of an overdependence on AutoCAD were realized before she could wean the company from its flagship product. The Bartz era, consequently, got off to a shaky start. Troubles surfaced with the release of AutoCAD 13.0 in 1994, an update that confirmed the convictions of the superstitious. The software was riddled with flaws, the “bugs” that cripple a software program’s ability to survive in the marketplace. For a program that cost up to $3,750 per user, pervasive bugs were not acceptable, prompting many customers to steer clear of the upgrade and make do with earlier versions or to turn to other software vendors. After doubling its revenues between 1992 and 1995, Autodesk began to record declining sales, registering a 5 percent drop in the first half of fiscal 1996 while its stock value tumbled, dropping from $40.75 to $22.50 during the six-month period. By the end of the year, sales were down by nearly $40 million and the company’s net income of $42 million represented a paltry 8 percent of sales. “It has been a very rough couple of years,” Bartz conceded in a September 22, 1997, interview with Forbes.

Bartz’s travails with version 13.0 segued painfully into criticism that she had failed to embrace the Internet as a vehicle for marketing the company’s software. Critics began assailing the company in 1999 for failing to release Internet-based products, but Bartz maintained her customers were not using the Internet to any great extent at the time. “Jumping to the Web wasn’t the answer,” she declared in a March 15, 2001, interview with Investor’s Business Daily. “That’s why people 18 months ago said Autodesk missed the Web. That is such a bunch of crap.” Bartz entered the Internet realm in 2001, launching a web portal and introducing Internet-enabled products to allow users to collaborate through the Internet. An online subscription service debuted in North America in August 2001, followed by the introduction of an identical service in Europe in February 2002, each proving to be successful moves.

The dawn of the new century was a period of vindication for Bartz, cementing her reputation as a highly skillful leader. By the time she had silenced critics about the timing of her move into the Internet realm, Bartz had reduced Autodesk’s dependence on AutoCAD to the point where the former mainstay product accounted for 30 percent of annual revenue. Further, as the technology sector suffered profoundly at the start of the century, the Bartz-led enterprise exhibited financial vitality, eclipsing the projections of Wall Street analysts. Bartz’s diversification was credited for the company’s success. Under her direction Autodesk had began addressing the design-software needs of customers in the manufacturing, infrastructure, and digital media markets. In 2001, through its Discreet unit (later renamed Autodesk Media & Entertainment) the company’s software was used to create the special effects for all three films nominated for Oscars in the special effects category:Gladiator, Hollow Man, and The Perfect Storm. The company repeated the feat the following year, when A.I. Artificial Intelligence, Pearl Harbor, and Lord of the Rings were nominated for Oscars in the special effects category.

As Bartz diversified, Autodesk’s revenues swelled. The company shot past the $1 billion sales mark in 2005, when total volume reached $1.2 billion. Bartz, who suffered through troubled years at the beginning of her tenure, stood as Autodesk’s hero when she ended her era of control after the company announced it had generated $1.5 billion in revenue for 2006. Bartz left her posts as president and chief executive officer in May 2006 to serve as Autodesk’s executive chairwoman, passing her former duties to Carl Bass, Autodesk’s chief operating officer. Bass inherited a fast-growing, vibrant company whose financial strength had been improved substantially by his predecessor. In the years ahead, he hoped to rival the legacy left by Bartz and lead Autodesk toward a future as dynamic as its past.

Susan Taylor-Babcock
Updated, Jeffrey L. Covell

PRINCIPAL SUBSIDIARIES

ADSK Canada Inc.; Autodesk AB (Sweden); Autodesk S.A. (Switzerland); Autodesk de Argentina S.A.; Autodesk Asia Pte Ltd. (Singapore); Autodesk Australia Pty Ltd.; Autodesk do Brazil Ltda.; Autodesk B.V. (Netherlands); Autodesk Canada Co.; Autodesk Design Software (Shanghai) Co., Ltd. (China); Autodesk Development B.V. (Netherlands); Autodesk Development S.a.r.l. (Switzerland); Autodesk (EMEA) S.a.r.l. (Switzerland); Autodesk Far East Ltd. (Hong Kong); Autodesk GesmbH (Austria); Autodesk GmbH (Germany); Autodesk India Private Ltd.; Autodesk International Holding Co.; Autodesk Kft (Hungary); Autodesk Korea Ltd.; Autodesk Ltd. (U.K.); Autodesk Ltd Japan; Autodesk de Mexico S.A. de C.V.; Autodesk S.A. (Spain); Autodesk S.A.S. (France); Autodesk S.p.A. (Italy); Autodesk Software Lda. (Portugal); Autodesk Software (China) Co., Ltd.; Autodesk Spol. S.R.O. (Czech Republic); Autodesk, Taiwan Ltd.; Autodesk de Venezuela S.A.

PRINCIPAL OPERATING UNITS

Design Solutions; Media and Entertainment.

PRINCIPAL COMPETITORS

Parametric Technology Corporation; SolidWorks Corporation; UGS Corp.

Autodesk, Inc.

views updated Jun 11 2018

Autodesk, Inc.

2320 Marinship Way
Sausalito, California 94965
U.S.A.
(415) 332-2344
Fax: (415) 331-8093

Public Company
Incorporated: 1982
Employees: 1,565
Sales: $353.2 million
Stock Exchanges: NASDAQ
SICS: 7372 Prepackaged Software

Autodesk, Inc. is the largest design automation software company in the world, with a variety of software products available in more than 85 countries and in 18 languages. Autodesk has holdings in Switzerland, Austria, Spain, Germany, England, Japan, Australia, and the Czech Republic. Its headquarters are located in Sausalito, California, a few miles north of San Francisco.

In the summer of 1987, Autodesk initiated a second issuing of stock, offering 2.5 million shares at $24.00 per share. The capital generated from this offering enabled the company to eliminate some of its debts. In 1988, Autodesk had assets of over $100 million in cash and securities, while revenues increased 40 percent over the previous year. By 1989, Autodesk was enjoying a 60 percent share of the market for personal computer automated design software, with sales worth $117 million.

In April 1992, Carol A. Bartz was named CEO of Autodesk. Bartz, who had a bachelor’s degree in computer science from the University of Wisconsin and had served as a vice-president at Sun Microsystems, became one of only two women to head a major U.S. company in the high technology industry. In addition to her duties at Autodesk, Bartz was a boardmember of Cadence Design Systems, Inc. and Airtouch Communications, Inc., a company owned by Pacific Telesis.

Upon her appointment at Autodesk, Bartz developed three primary goals for the company: building Autodesk into a $ 1 billion company by 1999, decreasing the company’s reliance on AutoCAD as the primary source of revenue, and moving the company into computer-aided manufacturing in addition to design. Bartz also reorganized the company, imposing a more traditional management structure, building a new executive team, and working with software engineers to further tailor AutoCAD to the needs of the public.

In order to sharpen its focus on design automation, Autodesk divested its interests in AMIX, an electronic shopping network, and Xanadu, a database software company, while acquiring Micro Engineering Solutions, a firm concerned with computer modeling software. In 1993, Autodesk purchased the net assets of Woodbourne, Inc., an acquisition which brought Woodbourne’s solid-modeling technology to Autodesk.

That year, a lien was placed on $5 million of Autodesk’s fourth quarter profits, as a result of a class action suit filed by stockholders. The plaintiffs had purchased stock in the company between May 6, 1991 and January 30, 1992, and, when Autodesk experienced a 35 percent drop in earnings in the second quarter of 1992, they filed the lawsuit. Although Autodesk maintained that the suit was without merit, the company paid a settlement in an attempt to curb litigation costs. In fiscal 1994, Autodesk expended over $70 million for the repurchase of common stock in order to avoid dilution caused by employee stock plans.

Nevertheless, Autodesk had developed several other product lines, including: Generic CADD; AutoCAD LT, a CAD program compatible with Windows; AutoSketch, a two-dimensional drafting program available with either DOS or Windows compatibility; AutoCAD Designer, a program enabling the user to perform solid-model drafting; Advanced Modeling Extension 2.1, another solid-modeling program, which interfaced with AutoCAD; Generic CADD 6.1, a design and drafting program compatible with AutoCAD files; and AutoCAD Data Extension, a program allowing the user to work with multiple drawings concurrently. The company also developed AutoSurf, a program based on AutoCAD Release 12, for two-and three-dimensional design; Autodesk Manufacturingexpert, another program incorporating AutoCAD Release 12; Aemulus and Aemulusmf, allowing interchange between AutoCAD and CADAM files; AutoCAD IGES Translator 5.1, a CAD translation program; Home Series, a program for use in home design drafting; 3D Studio, a program with a variety of modeling and animation applications; and Autovision, a program interactive with AutoCAD Release 12 which enabled users to produce photorealistic still renderings. A pioneer in the exploration of the potential of virtual reality, Autodesk also offered Animator Pro, 3-D Studio, and a Cyperspace Developer Kit.

Autodesk’s products had applications in a wide variety of fields, including architecture, engineering, construction, geographic information systems, mechanical design, and videography. Among Autodesk’s major clients were Chevron, Kohler, Sony Pictures, and Japan’s Nippon Telegraph and Telephone Corporation. Chevron used a combined package of AutoCAD Release 12, ADE software, and an Autodesk Geological Information System program to monitor its assets and leases on land and offshore; Kohler used AutoCAD, AutoSurf, and AutoMill to design plumbing fixtures such as bathtubs, toilets, and sinks; and Sony Plctures employed 3D Studio in plotting camera angles prior to actual filming. In addition, Autodesk earned a $550 million contract to provide CAD 2 to the Naval Facilities Engineering Command.

In 1994, Autodesk operated approximately 750 Training Centers worldwide for the purpose of educating users in the applications of AutoCAD and other Autodesk software. Autodesk depended upon a network of dealers, distributors, and direct sales to disseminate its products, and devised a system of cooperation with third party software developers. This system, called AutoCAD Development system, or ADS, was devised in 1990 and was structured to encourage independent software developers to create add-on programs for Autodesk products and new applications for Autodesk’s technologies. Over 2,000 independent developers worked to create specialized applications using Autodesk programs in 1994.

In the mid-1990s, Autodesk owned no real property; all facilities for management, product development, marketing, and production activities throughout the United States, Europe, and Asia were leased, including the facilities in Neufchatel, Switzerland, opened in 1993 at an expense of $1.4 million, in order to concentrate Autodesk’s European production. Although Autodesk owned most of the equipment used in its business, the company’s intellectual property and its network of programming and business talent were regarded as its chief assets.

Autodesk, like many other software companies, was challenged by the effects of software piracy in the early 1990s. In order to combat this practice, Autodesk joined forces with other high technology firms to form several regional organizations, including the Canadian Alliance Against Software Theft (CAAST) and the Business Software Alliance (BSA). The company has prevailed in litigation to protect its copyrights, including a 1994 suit against Cadisys Corporation, the result of which was a $100,000 settlement in Autodesk’s favor on May 23, 1994.

As technology in the computer software industry changed, Autodesk remained flexible and willing to explore new technological and business possibilities, hoping to maintain its rank among the leading software companies. Autodesk’s expansion into multimedia appeared to be keeping pace with, and even anticipating, market needs for innovations in these fields.