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Autodesk Inventor Pricing Causes Price War Flare Up

Inventor Outsells Mechanical Desktop, SolidWorks on the Defensive

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Revenues for Autodesk's Inventor soared 64% for the recent quarter and more than doubled compared to a year ago according to the company's earnings report. It now outsells Mechanical Desktop, according to Merrill Lynch. One reason may be an aggressive price promotion to users of AutoCAD software that offers licensees of AutoCAD R14 or later both AutoCAD Mechanical version 6 (which is based on AutoCAD 2002) and Inventor version 5 for only $1,495 (North America), $1,995 U.S. (Europe) and $1,195.US (Asia).

In addition to the promotional prices, most customers will buy a one-year subscription for $795 that gives them the right to download service packs and programs that supplement Inventor functions. Telephone support is not included.

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.

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Also in CAD Report, December 2001

Subscribe to the CAD Report and you will have access to the following stories:

  • IX Design rolls out -- Without fanfare, ImpactXoft has brought to market a radically new CAD system that lets multiple workers collaborate on the same product design and introduces novel modeling techniques that could make designers more productive. A detailed look at what's new and what's yet unfinished.
  • LMS announces Virtual Lab -- This long-anticipated new software product line enables engineers to employ test data and finite element analysis in a single simulation environment.
  • What's new in SolidWorks 2001 Plus? -- The best-selling feature-based CAD system offers something for everyone in its tenth major release. Find out what's hot and what's not.
  • Athlon bests Pentium 4 in CAD -- the most exhaustive CAD and CAE benchmarks ever published compare the performance of AMD's Athlon and Intel's Pentium 4 Xeon in single- and dual-microprocessor workstations. Don't buy a workstation for mechanical engineering until you've read this report!
  • ATI's Radeon 7500 rivals GeForce2 -- Find out how the new entry-level Radeon 7500 graphics board stacks up against Nvidia's low-priced model in 18 benchmark tests.
  • Notes & Quotes: Jon Hirschtick steps down at SolidWorks; Autodesk splits with ACIS; Cadence buys Silicon Perspective; Magma stock soars on IPO; PTC wants to sell ICEM Surf; and Logitech consolidates its three-D motion-controller business.

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