Revit Wants to be Bought by Autodesk

By Ralph Grabowski, editor, upFront.eZine, Feb 25, 2002

(reprinted by permission)

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  ·  Revit Reading Room - by CADdigest.com

If the government approves, Autodesk hopes to complete its US$133 million-purchase of Revit Technologies by the end of July. Government approval is not a given, however, because the concentration of ownership. How do competitors Graphisoft and Nemetschek feel about it? Graphisoft likes the purchase because it eliminates a competitor; they think Revit will go the way of SoftDesk. I did not hear back from Nemetschek. The share prices of Autodesk, Graphisoft, and Nemetschek all jumped on the news.

The talks began informally last fall, building up to last week's purchase announcement. The acquisition was hinted at in an interview last month by Martyn Day: "In my last meeting with Bernstein, he alluded to the fact that his team is already mapping out the next generation of Single Building Modelers. Bernstein commented: 'It's hard to predict but we have always thought of ADT as a bridging mechanism, in much the same way that MDT was a bridge to Inventor. It's a way of starting to change the way people think about things but whether it's going to last three years, five years, or ten years is something we are trying to figure out at this very minute.'" <http://www.tenlinks.com/NEWS/
ARTICLES/cadserver/adesk_reorg.htm>

At $133 million, this is not Autodesk's largest purchase; the company paid a half-billion for Discrete. Autodesk has plenty of cash in the bank, though, US$505 million at last count. In addition to venture capitalists and private investors, Dassault Systemes owns some of Revit. Purchasing Revit allows Autodesk to thumb its nose at arch-competitor SolidWorks, who helped launch Revit and sits on its board of directors. There is the possibility of a bidding war, perhaps from Dassault, just as when PTC drove up the price tag for SoftDesk, and SDRC increased Dassault's purchase price of Spatial.

This is not the first time Autodesk has purchased a competitive CAD product. Others include Generic CADD, IntelliCAD and Drafix (via SoftDesk), and Re:GIS and UltimateCAD (from Automated Methods). Generic CADD was shut down; IntelliCAD was resold to Visio by government dictate; Drafix was integrated with AutoSketch; Re:GIS became World (now gone); and UltimateCAD was shut down.

In an interview I had with Autodesk vp of building industry Phil Bernstein, he insisted that ADT (Architectural Desktop) will stay. "Our commitment to ADT is unwavering," he proclaimed, pointing out that ADT has 238,000 customers. "I can say that," he added, perhaps highlighting that Autodesk is _not_ saying how many customers Revit has.

In upFront.eZine #266, I reported that Revit emphasized Autodesk is its target, and Autodesk alone. "Problem is," I wrote, "Revit refuses to provide any data to show whether they are getting close to overtaking AutoCAD/ADT, or are even in the game."

During last week's Autodesk conference call, Autodesk ceo Carol Bartz described Revit sales as a "small pilot user base," what she would expect from a "start-up." When I repeated the quotes to Revit ceo Dale Lemont, he sounded shaken, but declared that his company had many happy customers.

An industry insider estimates that Revit had revenues of US$4 million last year. Dividing by an average subscription price indicates a user base of roughly 2,500. I wonder if the pressure to sell came from venture capitalists, who so far have sunk into Revit over US$43 million.

I asked Mr Lemont why Revit was selling itself. The answer: "To sell more copies of Revit." An analyst asked Ms Bartz what Autodesk was getting for the US$133-million purchase. Answer: increased sales, the technology, and a staff of 100. Autodesk also probably likes Revit's subscription revenue model.

Layoffs? None are planned. Relocation of offices? Nope. There may be, however, some Revit employees who find the change in corporate culture uncomfortable.

On the customer side, I am concerned about confusion over Autodesk's long line of AEC products, ranging from Architectural Studio to ProjectPoint (nee Buzzsaw). When I asked about this, Mr Bernstein defend the range, saying that we can no longer rely on a single application to solve all customer problems. I pointed out that Revit was exactly attempting to do that.

During their previous visit to upFront.eZinee, Alex Neihaus and Rick Rundell described version 4 as expanding Revit from "just design" to being part of the overall production process. They spent most of their time accentuated the point that Revit is no longer just for the architect, but also for the structural engineer, the landscape designer, and so on. An Autodesk press release agrees: "With Revit ... building information becomes available for downstream functions like structural engineering, construction estimating and bidding, and facilities management."

Finally, there is the question of product forking. Despite the "miracle" of ObjectARx, AutoCAD and DWG are increasingly no longer the glue that holds together Autodesk products. Forking began in the late '80s with the purchase of 3D Studio -- Autodesk's first post-AutoCAD product to remain independent of AutoCAD. Other forks arrived with MCAD (Inventor), then GIS, and now AEC.

On the AEC side, product forking is out of control, what with Architectural Studio, AutoCAD and LT, ADT, VIZ, Revit, and ProjectPoint. It's the opposite situation from ten years ago, when Autodesk supported (essentially) one CAD program on a half-dozen operating systems: Windows, DOS, Unix variants, OS/2, and Mac. Now Autodesk faces the reverse: supporting a half-dozen CAD programs on a single operating system.