There's a good story in this week's PC Week that summarizes the company's efforts to expand beyond a single product.
I think the market is saying that, while this is a good direction, they want immediate results.
I think the company is moving in a good long-term direction, but clearly it hasn't convinced everyone...
Some quotes from the story and attibution to the writer follow:
Sometimes, too much of a good thing isn't so good. Ask Autodesk. That's why it now sees variety as the spice of life.
Like a gourmand enamored of a single cuisine, Autodesk has gotten plump on one product: Its AutoCAD technical design software accounted for nearly 70 percent of the worldwide PC CAD market--and 75 percent of its annual revenues. But while Autodesk has gotten fat on AutoCAD, it hasn't gotten happy. And neither has Wall Street. Last month, several analysts downgraded Autodesk's stock. "I don't think any company can build a sound, long-term growth strategy with such a single-product dependency," says Jay Vleeschhouwer, of Josephthal, Lyon & Ross, a New York brokerage.
So now the San Rafael, Calif., company has embarked on a major
diversification effort. In May, Autodesk acquired Creative Imaging
Technologies, of La Habra, Calif., for the simulation software it created for interior decorators. In June, it announced plans to buy CadZooks, of Boulder, Colo., for an application that allows architects to digitally "walk through" their work. These are just the latest in a series of moves spanning 18 months. In that time, Autodesk has acquired at least five companies, launched five new divisions outside the architect-engineer-construction design software segment it owns, and changed its stock symbol from ACAD to ADSK to reflect its wider business reach.
That reach is both broad and elemental. Its sweep comes from spreading into such markets as GIS (geographic information systems), data management, mechanical design, multimedia and even retail. Its depth stems from the fact that the new initiatives use AutoCAD's core code, exploit its installed base and vast library of drawings saved in the AutoCAD file format, or both. Why so many directions? "In the software business, you have to place several bets," says Autodesk CEO Carol Bartz.
While it's too soon to know which will pay off, Autodesk's diversification could be a map for others. Its guiding principles: leveraging its impressive installed base while venturing into new forms of distributing software, files and content. "All software businesses are confronted by massive change brought on by the Internet," says John Rossi, a stock analyst with Robertson, Stephens & Co. "Not many of the existing powerhouses have started shaping a strategy around a new distributed world--Autodesk is at least
thinking about one."
It's more than thinking about it. Autodesk's new DWF (Drawing Web Format) lets users send precise, vector-based drawings over the Internet. Its Whip browser plug-in for Netscape and Microsoft Explorer allows users to view those two-dimensional designs even if they don't have the application that drew them. Autodesk's Kinetix division recently introduced its HyperWire three-dimensional authoring tool for creating multimedia content for the World Wide Web. Then there's the brand-new business of electronic publishing. Manufacturers of doors, plumbing and mechanical parts, for example, can publish the AutoCAD drawings of their products, relieving users of having to redraw those in their own designs.
But the Internet isn't Autodesk's only focus. Mechanical design engineers, GIS technologists, Hollywood design studios and even interior designers are now being wooed by Autodesk's various divisions. Surprisingly, some of those user segments, such as GIS and mechanical engineers, did not have an Autodesk offering before now. The others seem remarkable by their inclusion- -until you dig a little deeper. As it turns out, Autodesk's 3D Studio-- offered through Kinetix--owns 60 percent of the games-design market, 45 percent of the PC-based 3-D software market and 30 percent of the worldwide animation market.
In the near term, Kinetix represents Autodesk's greatest potential. The issue now: making itself known, separate from Autodesk. "Autodesk is not a marketing-oriented culture," says Larry Crume, the division's general manager. "I have to make sure Kinetix can market itself under a different brand name and with a faster pace of development than the rest of Autodesk has."
- end of quotes --
... it goes on to give a mixed picture, asking whether ADSK will be a success, but summarizes well the co's situation. I don't want to clip the whole thing cuz that would be inappropriate, but think I've summarized the main points quite well.
Rochelle Garner, PC Week
Written by: Rochelle Garner is a free-lance writer based in San Carlos, Calif.
08-06-96 at 17:28 EDT, Copyright 1996, Ziff-Davis Wire |
