The 3D design tech firm Autodesk, whose software has been used in many fields, from the New York Freedom Tower to Tesla electric cars, has moved from selling standalone perpetual licences to a subscription-only model. This has significantly lowered the cost of acquiring its software and also given an opportunity to the company to focus on India’s price-sensitive small and medium-sized businesses (SMBs). Recently, it singed a memorandum of understanding (MoU) with government of Maharashtra for making its software available to the state SMBs. Within a short span of time, more than 2000 SMBs in Maharashtra have started using its software. In an interview with EC’s Mohd Ujaley, Autodesk India and SAARC managing director, Pradeep Nair said: “These are customers that we never sold to in the past, none of these are existing customers of ours. They have come on-board in the last six months. This gives us an opportunity to explore the unexplored territory.”
What are the key segments that Autodesk focuses in India?
We are in three broad segments. First, we started out with architecture engineering and construction in which our AutoCAD software has been used to make drawings for architect. It is our core business.
Second, we expanded into manufacturing, helping people design and manufacture better products. Whether, it is automotive or industrial machinery or consumer package goods, our solutions are being used in these sectors.
And the third thing that we do is media and entertainment, which is about visual effects and animation. So, whether it is Sony, Red Chillies or Lakshya or any other studio who uses visual effects and animation, work on our software.
We are quite different from traditional enterprises IT companies like IBM, VMware or SAP. If you asked them about their focus area, you are like to come across banking, telecom etc. Essentially, if you are making something, then you are likely to be using some of our software. We help people design better things.
How Autodesk is placed in these businesses in India?
All of these businesses have shown tremendous growth over the years. These businesses are doing well and growing double digit. The first two – engineering and manufacturing – are about similar sizes, and the third one, is a smaller part of our total business. In terms of potential, we continue to be quite bullish about what is happening in each of these sectors. Because in all of them, there is a huge amount of focus of the government and enterprises. These sectors are likely to get more investment and good thing is that nobody is exiting from these industries.
You have recently signed an MoU with state of Maharashtra. How things have moved on that front?
In February, 2016, we signed a Memorandum of Understanding (MoU) with the government of Maharashtra for making our software available to Micro Small and Medium Enterprises (MSMEs) in the state. It has worked out quite well and we are now planning to do more of those with different states in India.
Basically, under the Make in India plan, government has been wooing big companies like General Electric, Foxconn to set-up plant or manufacturing unit in India, which is really good. However, when we spoke to the government of Maharashtra, they said, in addition to big companies, they were also looking for solutions that can help small and medium industries in the state.
So under this MoU, we have offered Autodesk Fusion 360 software, which is a cloud-based platform that helps companies in product development. Right now, we have more than 2000 SMEs in Maharashtra that have taken advantage of this program and have started using our software. These are customers that we never sold to in the past, none of these are existing customers of ours. They have come on-board in the last six months. This gives us an opportunity to explore the unexplored territory.
Autodesk participated in some of the Smart Cities initiatives of the government. Do you see something concrete happening in the smart city space in India?
Smart Cities progress is not something that you will measure in amount or percentage. We are excited about this segment because it aligns very well to what we solve with technology. But it will necessarily take more time to do that because it is relatively simpler to do things in the manufacturing space but in infrastructure and in Smart Cities, the problem is multifaceted and it is not just the government doing something. There are various stakeholders that have to pitch in to do things.
There is a lot of intent to build infrastructure because we think that is one of the things that holds us back across the economy. When I say infrastructure – roads, rail, transport is an area that seems to have a lot of focus on. But to me, Smart Cities is something that we will talk maybe after a few years rather than a few months.
Most of the multinational firms are running some sort of start-ups program in India. How do you look at the start-ups ecosystem in the country?
We work with lot of start-ups. We have an start-up programme called Entrepreneur Impact Program (EIP) in which we invite start-ups to share their ideas. The selected start-ups get assistance in terms of free software for a period of three years. Actually, when we talk about start-ups in India, a lot of it is around services and software. But we are focused on the hardware piece. We are interested in start-ups whose work has social impact.
Do you find any reason why we have lot of start-ups in e-commerce not in the hardcore engineering or life science?
May be, everybody wants to be the next Facebook, the next WhatsApp or the next Uber. Those stories are better known. But in terms of hardware, the good things is that we are seeing some uptake. We have a bunch of examples from our Entrepreneur Impact Program. For example, there is a company in Chennai called Prakti Design which is making a cooking stove that is designed in a manner that reduces the amount of pollution by about 90%. Similarly, we are working with other start-ups that are having impact on people lives.
Our focus in start-ups is not trying to build a huge number of start-ups. We are looking for start-ups that have a social impact with their products and are focused on using design as a differentiators to build better products.
How was the year 2016 for Autodesk in India?
The year 2016 has been quite exciting. First, we have changed our business model from selling perpetual license to subscription model. With the new model, the cost of acquiring our software has gone down significantly which is really good for market like India where people consume more if you offer them in small sizes.
Second, in order to make this process smooth, we have launched an e-store in India. Now, people can buy our software online on pay as go basis. Traditionally, we have been selling through a bunch of business partners. But with e-store, if you are in Lucknow and do not know who is our partner in that territory, you can still have access to our software because all you need to do is go to the Autodesk e-store. This has also increase affordability of our software. For example, what used to cost maybe 2-3 lakhs is now available for as low as Rs. 3000 a month.
In the year 2017, what new things are we likely to see from Autodesk?
For us, the transition of this business model has only happened as of last month. We are just beginning to see how we can expand the number of people that we can serve and the e-store that we have. So, all these new capabilities that we have put in place, our goal would be to take advantage of those going into next year.
We acquired a company called Within earlier this year, so you will see solutions coming up in that space. The other thing that is important is 3D printing. There is a lot of interest in that, but one of the things that stops 3D printing from realising its potential is its ability to handle materials is still not keeping pace with the printer. I mean, we can print a lot of things, but the materials like ceramic or metal or glass, or whatever, is not keeping pace with the ability of the printers. The material that we use could change, what design looks like. So, we may see things like that coming into the market in India in 2017.
Going forward, we are also bullish about Internet of Things (IoT). It is not new from a technology point of view but we are seeing the opportunity to embed the IoT capability into physical things. So, when you build smart buildings you have sensors that help you control light, control temperature etc. In the year 2017, we are likely to see more of this.
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