Why a High-End Software Maker Pursues App Companies

Bass has pursued such deals to broaden the company's user base even though these consumer products bring in less than 2 percent of Autodesk's revenue—a ratio unlikely to change. Autodesk's consumer offerings are either free and supported by advertising, or they cost one or two dollars to purchase in app stores, while its typical software packages retail for thousands. The reason for pursuing these app-focused revenue streams, Bass says, is that the consumer products help Autodesk to innovate faster and better. Historically, IT innovation started in big organizations, such as the military and large companies, and trickled its way down. But today, Bass argues, software trends are starting at the level of individual users—especially with the proliferation of mobile app stores that make thousands of offerings available. Apps, he adds, also require a faster development style and a simpler learning curve than Autodesk's traditional software business.  

Mastering that will help Autodesk as it makes all of its software, including its flagship product AutoCAD, more collaborative and mobile. Bass believes Autodesk's most serious threats today are not from its traditional competitors, but from smaller companies that might quickly take advantage of a new technology platform or business model and have, as Bass points out, "nothing to lose."

One aspect of the app revolution still surprises Bass, however. "I get more mail from people who have bought Sketchbook and Pixlr for 99 cents than some of our $5,000 applications," he says. "The letter always starts: 'Dear Mr. Bass, I paid 99 cents for Sketchbook and when I did, I expected it would have this filter or do this.' I rarely get that around our $5,000 professional products. For 99 cents, people feel very entitled."

3-D models, apps, autodesk , Business in the Cloud , Socialcam, software

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