Autodesk GIS Has Solid Quarter, Company Plans Layoffs

 by Adena Schutzberg, editor

August 22, 2002 - There was some good news in Autodesk's Q2 conference call: subscription revenue is up, prices for commercial software are up, and the GIS division was called out for a particularly strong quarter, bringing in $26 million. The division boasted two contracts in telecommunications that together total $1 million and numerous local government sales. Map Series sales are "gaining momentum" and the division has solidified its interest in transportation by acquiring the vertical tools from CAiCE. Those tidbits of good news were shared by CEO Carol Bartz and Executive Vice President of Design Solutions Division, Carl Bass.

The bad news is that the economy is tough and other groups within the company didn't do as well. The company announced a layoff of about 7% of the company's headcount of 3,715 in the coming quarters. According to TenLinks, that includes about 40 employees at headquarters in San Rafael. Even with the reduction, the coming quarters are not expected to show a great rebound and investors have been warned not to expect major profits.

As usual, the Q&A session proved particularly interesting. One questioner asked about the status of competitors in GIS. Bartz noted that Bentley's situation in the market was about the same and that small companies in Europe were starting to gain traction. ESRI, she suggested, which traditionally goes after large deals, is finding them harder to win. In contrast, Autodesk is positioned well to make deals of all sizes. Bentley notes regularly that it has users with many seats, while Autodesk typically serves smaller seat installations.

An analyst asked about whether subscriptions would take away from short-term revenue. Bartz said that now, while the subscriptions come with upgrades, there will be limited impact, but that down the road there would be a larger effect.

The channel was the subject of another query. Fifty-five percent of the channel met its quota this quarter, and Autodesk has decided to revamp expectations and further encourage partners during this challenging economic period. Direct sales account for 24% of overall sales.

Q1 of fiscal 2004 (February-April 2003 on the calendar) will see a new AutoCAD release, along with all of its "family" of products. Per policy, the third release back will no longer be supported.

A question about location-based (LBS) services revealed that Autodesk technology is under trial with two U.S. carriers, while in Europe one trial has come to contract, one is still out, and a third has just gotten underway. The company has nothing to announce on the trials at this time, but is "feeling very good" about the progress.

Bass' participation on the call was interesting. Expect him to become more involved in running the company in the future. The layoffs were inevitable in this economy and it's not clear how the cuts will be administered across the groups. Perhaps since GIS is doing so well, it will be spared some pain?

©Copyright 2002 by Professional Surveyors Publishing Co., Inc.

About the Author

Adena Schutzberg has ten years experiencing using, developing and marketing mapping and GIS products. She’s worked as a CAD/GIS manager in a consulting firm, and held positions at GIS vendors ESRI and Cadcorp. She launched GIS Monitor and the Ultimate Map/GIS Directory while at TenLinks.com. She currently runs a GIS consulting business and is an editor for Professional Surveyor.

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