Autodesk has had a mixed six months, its stock price first rising and then taking a bath in the general decline of tech stocks at the start of April. Stock analysts remain bullish - its new revenue model moves customers away from purchase margins to recurring revenues, a must-have in the age of service. But something else is going on.
Autodesk is learning fast from the activities of the smartphone sector and the development of a platform and ecosystem model of innovation and business.
That model is straightforward in principle. Create a software and service stack like Google has done with Android and Search, and as Apple did with the App Store and iTunes. Simultaneously build out a new productive ecosystem.
It is tougher in practice of course. If it weren't, everyone would be succeeding with it. There are holes in Autodesk's thinking too but by and large the strategy has all the ingredients. They are a little spread around, so here goes with a summary and interpretation. The Elastic Enterprise covers these issues so I'd like to offer a view - I'm currently writing the much expanded second edition and thinking of Autodesk as a case study.
1. Autodesk is in the process of building out a platform and ecosystem strategy in the creative industries where it has Adobe in its sights.
2. It has a huge ecosystem in the Maker community, largely based around its acquisition of the maker community at Instructables.
3. And there is a platform and ecosystem evolving in building information modelling (BIM) and construction.
To date these initiatives are not driving the stock price, according to SVP Amar Hanspal. Analysts seem barely aware of the model or what it can deliver.
In the Maker, 3D business, Autodesk owns or is closely associated with end-consumer communities that number about 120 million people. In that community it has the makings of an ecosystem, one that is linked to an immediate market about a fifth the size of Apple's registered consumer community.
"A subset of that are businesses where the value is very clear, " says Hanspal, "for example in the construction industry. The consumer that uses sketchbook (a Maker app), that too is becoming clearer."
The company is inching its way to what Hanspal calls the fact pattern, or the definitive strategy for how to make that a true elastic enterprise play. To get there it needs a subset of the community to become active producers of apps or content or something else, something new to the ecosystem world - hardware.
The difficulty in generating ecosystems is that future platform and ecosystem projects will have a strong hardware component to them. It is impossible to revisit the halcyon days of the elastic enterprise based on a software and content stack - i.e. all soft product.
As we move onto the Internet of Things, ecosystems will incorporate software and hardware engineers and designers and the app element could be grafted onto any device or object, and it is likely to be more closely associated with specific hardware uses - in the kitchen, the garden, the car (see Ford's initiative here).
That also means it is not as simple to activate and motivate the real do-ers, the developers that right now need nothing other than their labor and and an SDK to start innovating.
You can see why Autodesk is having to small-step towards the right solution. What is the right platform for this?
It will have to combine access to low cost engineering designs, so communities like GrabCad will come in handy. So too will initiatives in product modularization like Google's Project Ara, for the modular smartphone. There has to be more ecosystem proof of concept, more testing of the human capacity to collaborate on projects that cross the hardware/software divide. Ironically Google could be the leader here.
One senses that there also needs to be a big problem to solve. Apple solved digital rights management with iTunes and a consumer need when it delivered 99 cent tracks. It solved a usability problem in smartphones and got lucky with apps. Google solved a different problem with Android - low cost access to smartphones.
What problem does the Maker community want to solve? It is still an open question. But Autodesk has started to answer it in the construction business where its BIM platform Revit seems to be reshaping the power dynamics of the construction industry.
Construction has huge risk profiles. Most projects are one-offs and need new teams assembling each time a construction starts. They are the exemplary collaborative environment, in principle, with multiple trades stepping up at different times to complete their part of the puzzle that becomes a giant new building.
That process can now be modeled in a BIM environment and Haspal concurs that a product like Revit is helping reshape work practices and the relationships between trades and project leaders. In the past the architect was typically the knowledge holder on any building project. Now the knowledge is modeled in advance by all the parties involved.
That can mean HVAC and plumbing, carpentry and fittings, electrical, architect, quantity surveyor, contractor and more all pitching in with data on how they see a building evolving over time. The BIM is a simulation of the process.
With Revit Autodesk is solving two big problems. The cost of complexity and the knowledge structure. Not surprisingly a developer community is evolving around it. It is more of a classic software platform and ecosystem play.
Finally Autodesk is doing interesting things around the creative industries. In March they acquired Creative Markets, a company that bills itself as a marketplace for creatives. In late 2012 Adobe bought Behance, similarly a creative marketplace, at that time with a membership of 1 million creatives.
I have my doubts about the value of marketplaces as distinct from ecosystems. Marketplaces always carry the risk of poor resource allocation, driving down the price its members can charge. The ecosystem is more of a co-productive community working under its own steam as entrepreneurs. The difference is huge in practice. I think Autodesk needs to take that difference on board.
However, it has also hired Bill Johnston, ex-Dell, as its head of communities. Johnston learned his trade at Dell and in truth is one of a handful of people responsible for defining how online community works. The ecosystem side of the equation looks well equipped. Now for the platform.
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