The Scoop...

Mainframe memories

Founded in 1982, Autodesk gained early success with the introduction of the first computer-aided drafting program written not for mainframes but for PCs. The company then rode the PC boom to continuing success. Autodesk went public in 1985 and acquired interior decorating software developer Creative Imaging Technologies a year later. In 1997, the company released its home improvement software line, Picture This Home, and acquired rival CAD software developer Softdesk for $90 million.

Autodesk - working on the drawing board of success

Today, more than four million architects, engineers, and construction clients use AutoCAD's 3-D features to create models and plans for their buildings, bridges, vehicles, and ground plans. Much of AutoCAD's success, like that of Microsoft, came from the dominance of a particular file format. While Microsoft capitalized on DOS to transform itself into an industry titan, AutoCAD saves its files in a format it doesn't share with competitors. Thus, if an architect designs a building using AutoCAD, the engineer who builds the structure must use AutoCAD to open and read the plans. Revising this format slightly every time it issues a new release of the software, Autodesk prevents other companies from cracking the code.

By installing more than 600 AutoCAD licenses at a university in Great Britain, Autodesk is making their software available to 12,000 students studying electrical engineering, architecture, landscape architecture, geography, archeaology, and a large range of other subjects. Thus, the next generation of CAD users will be familiarized with the AutoCAD system, and hopefully remain loyal to it.

Sell-offs and upstarts

In 1998 the Softdesk deal attracted the attention of government regulators, who began investigating Autodesk for antitrust violations. While the Department of Justice never found any wrongdoing on the company's part, Autodesk agreed to sell off to a much smaller rival a new CAD program that Softdesk had been developing. That rival has, however, now created an alliance of Autodesk competitors who are pressuring Autodesk to divulge the secret to its AutoCAD formats while also attempting to crack the code themselves through reverse engineering. By the end of 1999, sales had fallen dramatically, several crucial executives had departed, and the company had cut 350 employees. What happened? The Internet.

Where do we go from here?

Several analysts believe the slump stemmed from Autodesk's inability to morph its business structure and offerings to the demands of the Internet age. The company improved web features for many of its software packages, and in June 1999 formed Autodesk Ventures, an in-house R&D agency for web enterprises. Autodesk Ventures has already hatched one firm, Buzzsaw.com, which handles business-to-business concerns for the construction industry. It has also developed a business-to-business portal that enables construction project participants to work together in virtual space, collaborating and accessing manuals and reference materials through one portal. OnSite, which integrates corporate information systems and mobile tasks, was introduced in May 2000. It enables maps and designs to be viewed on handheld devices, fostering communication between corporate databases and mobile workers.

Autodesk.com

Autodesk has recovered from its early misjudgment of the Internet's capabilities. The company now boasts a significant presence on the World Wide Web, with a web site and e-stores in more than 14 countries. Autodesk is also working to use the web to enhance its software by web-enabling its desktop products, creating browser-based products, and building portals and marketplaces for designers and engineers.

Never let go, Jack

Sales of AutoCAD have leveled off, and today the product accounts for about half of the company's revenues, compared to 80 to 90 percent five years ago. The company has developed or bought geographic information systems, mapping, and special effects applications to pad its income. In 1999, for example, Autodesk paid $520 million for Discreet Logic, a Canadian special effects firm that helped create, among other films, Titanic.

Back on its feet

The company's come a long way since the days of financial trouble and layoffs it experienced late last century. Helping Autodesk's fortunes is its new Inventor software, which facilitates engineering, design, and drafting in 3-D. The product is being touted as the future of 3-D design, which saves approximately 40 to 50 percent of the user's time as compared to conventional two-dimensional drawing. Inventor is predicted to become the new industry standard, leading Autodesk away from its dependence on AutoCAD.

Autodesk is also now recruiting aggressively in an effort to substantially expand its current workforce of about 3,000. The opening of new high-tech offices in New Hampshire is expected to spur recruitment over the next few years.