Autodesk is wise to move aggressively while it still enjoys the loyalty of a huge customer base. Even with the torrid growth of Inventor, sales of Autodesk's manufacturing division rose only two percent sequentially and declined by six percent from the year ago as sales of Mechanical Desktop and AutoCAD declined.
Autodesk's price-slashing strategy may be the right one to meet growth objectives. However, Inventor is less capable than either SolidWorks or Solid Edge. At comparable prices, one would have to be ignorant of the competition or a diehard Autodesk partisan to choose Inventor.
However, at much lower prices, the fulcrum shifts. Customers may prefer a much cheaper product with fewer features to a more sophisticated but costly one. AutoCAD customers, who originally chose AutoCAD for its low price may buy Inventor for the same reason.
SolidWorks goes from enjoying 5 years in the low-price position for solid modeling to having to justify charging higher prices than Autodesk. SolidWorks managers doubtless remember that Computervision, Applicon, and Calma similar arguments when challenged by AutoCAD and all succumbed eventually to the cheap competition.
But low price doesn't always win. CADKEY challenged Autodesk in the 1980s and 90s with CAD software that sold for a few hundred dollars but never did win a big share of the market.
Buzz Kross, vice president of Autodesk's manufacturing division claims price alone wasn't responsible for the 5,300 new Inventor licenses that Autodesk added in the last quarter. He also credits the strength of Inventor release five and the training of Autodesk's sales force.
The price war among the leading CAD vendors will make life tough for smaller CAD outfits
If your company has the money, now is a great time to negotiate discounts on new licenses and workstations. We don't expect prices to stay this low indefinitely. Moreover, CAD outfits are increasingly depending on annual license fees, not just initial charges, to keep them in business. Autodesk will probably raise these charges in future years once customers are locked in to Inventor.
Also in CAD Report, December 2001
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