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Autodesk is Buying Revit!

In a move that comes as a major surprise, Autodesk announced its intention to acquire Revit Technology Corporation and its Revit architectural modeling product for $133 million cash.

by MARTYN DAY, editor, CADserver, Feb 22, 2002

     See Also

Autodesk To Buy Revit for $133 Million - press release by Autodesk
Autodesk to Buy Revit - extended coverage of Autodesk's planned acquisition, the best analysis, comments and reviews compiled by TenLinks.com
Revit website
   Autodesk website

Founded in 1997, Revit was started by two ex-PTC programmers, Leonid Raiz and Irwin Jungries, with an idea to apply 3D parametric modeling - until then only used in the MCAD space - to architecture. Version 1 launched in April 2000. Not content to rely upon just its technical merits, Revit marketed its products aggressively, acquiring high visibility in a relatively short time. Autodesk’s Architectural Desktop immediately became Revit’s favorite target – and the butt of its jokes. Revit once sent a bookshelf to Architectural Desktop customers claiming that the bookshelf was the best place to install the latest version of Autodesk software.

One might think that Autodesk is buying out Revit as a potential competitor but more than likely it is the technology that Autodesk is after. Revit is fresh and unique in the AEC market whereas its main competitor, ADT is based upon code that is more than a decade old. It seems common knowledge that Autodesk investigated purchasing Revit's technology before it ever came to market but passed on the deal. So, why Revit? And why now? I think the driving force behind the decision is the VP of Autodesk’s Building Industry Division (BID), Phil Bernstein, who had been tasked with developing the next generation of AEC modeling tools. Formerly a practicing architect, Bernstein had to choose between developing from scratch, taking years, or buying into an innovative product that had potential. One does have to wonder what the price differential was between Revit four years ago and $133 million Revit today? We will probably never know.

What about Architectural Desktop?

Built on the AutoCAD platform, ADT was the first desktop 'Object-based' AEC product. The problem with it is that ADT fails to hide the complexity of the Single Building Model (SBM) from the user. This makes a steep learning curve and results in limited functionality. Over the years, I have made it no secret that I loathe the product. Many ADT customers use it for 2D drafting, happy to use it as an AEC flavor of AutoCAD, nothing more. When Autodesk UK was looking for ADT case studies, they couldn't find anyone using it as a 3D SBM system, so have actually had to recruit, train and equip an architect to carry out a pilot project using ADT as its developers intended. In short ADT is an attempt at an intelligent 3D modeling system built inside a 2D foundation product, it just doesn't have the headroom.

Autodesk can place a lot of its success in providing links for third party developer's to add functionality to its core products. ADT and Mechanical Desktop are based on Autodesk's Object API for AutoCAD - ObjectARX. While powerful, ARX applications have the ability to include data in DWG files that cannot be read by standard AutoCAD, requiring the presence of the ARX code in something called an Object Enabler (like a plug-in). This is a very inelegant solution but was necessary to work around the limitations of adding 'next generation' features inside 'last generation' AutoCAD. With the MCAD team moving quickly to Inventor and MDT approaching maintenance mode (no new features) and the BID team now having its fresh Revit code stream, ObjectARX appears unlikely to play any key role in any future AEC or MCAD vertical development. On that note, Revit shunned the API culture, if the feature wasn’t in Revit, no one else could develop it. It will be interesting to see if Autodesk 'opens it up'.

All Dressed Up and No Place to Go

Revit may have had a revolutionary product but it had no channel and sold direct. It also was only available as a subscription-based product and training was done over the web. Those issues, combined with the 3D SBM concept, limited its appeal to early adopters, the few technology-aware architects. Revit representatives were always tight-lipped about the total number of Revit sales. The fact that Revit was able to secure venture capital in November last year – at a time when VC was almost impossible to get – speaks well for Revit’s ability to sell itself but could also mean that the company was unable to go forward on its own revenues.

Prior to Christmas the company announced that it was going to appoint dealers and provide a one off purchase cost, indicating that the market had perhaps not been as receptive as Revit had hoped. Still I would suggest that considering the low numbers of users, the price paid by Autodesk values Revit considerably higher than a fire sale bargain.

In a recent interview with Phil Bernstein (VP of BID at Autodesk), he pointed out that ADT was a transition product, very much like Mechanical Desktop was to the Autodesk MCAD team after Inventor came along. He wouldn't elaborate on what that future product would look like but as it turns out, I didn't have to wait all that long to find out!

Some of the preparation work for this move was carried out last week. Autodesk announced a reorganization of sales and development that involved the establishment of a team to develop core AutoCAD. Previously the BID team had been in charge of AutoCAD's future content and development, as well as ADT. With the Revit purchase, the BID team’s need to be in control of AutoCAD's destiny is less of an issue, although I am sure there will be plenty of integration work to be carried out.

Revit was a great product in search of a decent channel that is able to sell it. The Autodesk purchase will take care of that in one fell swoop. Autodesk needed to develop a SBM product from scratch and I guess the feeling was: Why develop it if you can buy it? There are many things to add to Revit and Autodesk's resources will certainly enable it to plug the gaps quicker than a solo Revit effort.

And Now a Message from the CEO

On Revit's website, CEO, David Lemont, addresses users, “The planned acquisition of Revit by Autodesk validates and, over time, enhances the decision you have already made to use our parametric building modeler." Lemont goes on to confirm that development will continue, "Revit's parametric building modeling will be enhanced and expanded to cover more and more of the downstream applications you have been telling us you want Revit to automate. " This indicates that Revit will be developed and expanded under Autodesk's control.

The Autodesk press release suggests that ADT is targeted at those users who want to stay in the familiar AutoCAD environment, while Revit is described as 'the next step toward a fully integrated model-based approach'. The parallels to Mechanical Desktop and Inventor are unmistakable. One only has to look at what's happening to MDT to see how ADT may be eventually phased out in favor of the next generation program.

Is It the End of the Road for the Competition?

Consolidation of the market is perhaps to be expected considering the economic climate and the dominance of Autodesk in the AEC market. The news is not good for competitors, namely Graphisoft, Nemetschek and Bentley. They may all have dismissed Revit before as a product that, despite impressive technology, did not constitute a sales threat. Similarly, Autodesk's devotion to promoting ADT as the 3D SBM solution, a task it was not up to, made easy pickings for the competition. Now that interesting little Revit product has just been backed by the industry giant, its experienced developer network and extensive channel, all of which has the potential to be a very dangerous combination, indeed.

The press release clearly states that Autodesk plans to acquire Revit, so the deal hasn't been completed. The last time Autodesk acquired any major AEC technology and pre-announced it was the Softdesk purchase in 1997. Softdesk was Autodesk’s biggest AEC developer with products like AutoArchitect built on vanilla AutoCAD. At the time, MCAD giant PTC had its eyes on capturing a slice of the AEC market and stepped in with a higher bid, forcing Autodesk to pay tens of millions of dollars more to keep a potential competitor out of its market. Who knows, there still may be time for a major AEC competitor to investigate usurping the Autodesk bid, or perhaps a company like Dassault Systemes, so strong in the MCAD market, and now a major Autodesk competitor, may decide to enter the 3D AEC space? Thinking about it, it also shows Autodesk's tendency to buy AEC products and technology rather than develop them in-house.

However, competitors may also find solace in the fact that the majority of architects seem quite stuck in 2D. Unlike mechanical designers and engineers who spend money on technology and have embraced 3D, the majority of architects are intransigent to the 3D message. In a recent survey over 70% of architects said they didn't envisage ever using any 3D in their practices, 2D was 'good enough'. Revit demos well and is a very powerful modeler, but unfortunately the message is still a 3D one and let’s not forget, there’s still lots of die hard AutoCAD users out there and for them – tit’s still not AutoCAD.


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