Autodesk going subscription-only. Here’s how they can help the industry

Autodesk has announced that they will stop selling standalone perpetual licenses of their desktop software beginning on February 1, 2016. This is only for standalone software, and the change does not impact the Entertainment Creation Suites or Network licenses at this point in time (expect news on that in the future).

This announcement is expected, as it was foreshadowed in October at Autodesk’s 2014 Investor Day by Andrew Anagnost, who is Senior VP, Industry Strategy & Marketing. If you look at ground-breaker Adobe, subscriptions have been very successful for the company and it was the first real-world use case for the post industry. Blazing the way, Adobe’s CC offering has seen subscribers jump from 2.3 million in Q2 2014 to over 3.4 in Q4 2014.

According to Anagnost, the majority of customers new to Autodesk have been choosing desktop subscription instead of purchasing perpetual licenses. This makes sense, as the initial investment is much lower with a breakeven point of around 24 months via annual rental pricing. In general terms, subscriptions make financial sense for companies who wish to keep current on their software and have the flexibility to ramp up and down with short-term additions. In addition, to obtain reasonable pricing facilities generally need to buy into longer term periods such as annual commitments.

Why reveal these plans now? The aim of the announcement is to help customers smooth the transition to the new model and prepare for the change over the next year, instead of catching them off guard with a surprise announcement. It’s a sensible and smart move, as there are certainly issues which need to be discussed. And, in fact, a day after the announcement, we’ve heard that Autodesk reps are being proactive and already visiting facilities to discuss the changes.

In addition to the main news of the end of standalone perpetual licenses, what are some key aspects of this announcement?

• Customers will be able to purchase perpetual licenses until February 1, 2016
• Perpetual license holders will continue to be able to use their software forever
• Perpetual license holders with maintenance will continue to receive updates, as long as the subscription remains active
• New multi-year desktop subscriptions can lock in a price and provide a better value than the currently offered annual terms. For example, a three year desktop subscription to Maya will cost around $4,400 while a perpetual license + maintenance would cost around $5,500 (North American pricing)

The company has prepared a Frequently Asked Questions, which may be downloaded from the Autodesk web site. It contains more details about the move away from perpetual licenses.

This impacts all standalone software sold by Autodesk and not just Media and Entertainment. The lone exception to the standalone software is Flame, which will continue to be sold and marketed in its current form due to its tightly integrated “hardware component,” according to Autodesk’s Anagnost. In our opinion, this honestly seems to be much more of a company business decision than a technical consideration. The fact is, in recent years, Flame hardware is made up of off-the-shelf components, so systems could easily be built by customers who wish to run Flame. That being said, Flame has always been treated as different, so the decision is not surprising.

Why not continue to offer both models (purchase and subscription)? As a company, Autodesk feels that subscription and the cloud is where software is going moving forward and there are significant benefits for all involved. Lower up-front costs, easier upgrades and management, pay-as-you-go, and ramping up and down the number of seats are all benefits, according to the company. Anagnost feels that if a company isn’t a cloud and subscription based software company in 5 years, they won’t be a software company at all. So instead of continuing two different development paths, they aim to focus on one and not dilute resources.

What lessons can Autodesk learn from Adobe?

As a frame of reference to the change in pricing model, Adobe’s implementation has shown that there are real benefits and it is actually acceptable for most customers (or at least many customers). From an individual user standpoint, software updates have been frequent and not tied to major releases locked to financial reporting periods. Having a full suite of applications available is incredibly useful. New features have been been added with relative ease and can be rolled out when they are ready, not when they need to be ready to make the quarter’s financial results. It’s easy for a customer to ramp licenses up and down as needs change. And it is a source of more predictable income for the software developers. When it works, it definitely works.

There have also been teething problems with the Adobe Creative Cloud as well, with users locked out of upgrades and even the ability to run the software at times. And those artists and facilities that don’t keep current on their software will see an increase in price over the long term.

Let’s be clear, as well, about the Adobe Creative Cloud. There are most certainly cloud aspects to it (such as TypeKit, Behance, and others) and there will be more cloud features added moving forward, but for the majority of facilities and artists we’ve spoken with, the Creative Cloud is largely a new way to pay for and license the suite of Adobe software. And that’s arguably the biggest problem for facilities: the move to a user-based desktop subscription model and away from serial number licensing.

Adobe previously used software installers with serial numbers which made it easy to keep track of licenses in a company. Even better than serial numbers are Autodesk’s multi-seat floating licenses: they simply work and work well. Floating licenses are an incredibly flexible way of granting the right of users to run a particular software package. When an artist stops using a particular piece of software, that license is immediately freed up for someone else to use. To this end, facilities don’t need a license for each and every user since all artists aren’t using the software at the same time.

Large facilities such as Double Negative, MPC, and ILM have large-scale agreements with Autodesk regarding licensing, so this change is likely to have little impact for them. However, if you’re managing a facility with 20 users and 10 licenses, the move to user-based subscription opens up a can of worms. Instead of simply quitting the software, an artist needs to log out of the user-based account and then that login needs to be used by another artist.

According to Anagnost, Autodesk is very much aware of this issue (and others) for facilities and in the next twelve months will be announcing how they plan to make this all work better for customers and hopefully avoid the pushback that Adobe has gotten from facilities. Autodesk has nothing specific to announce at this time, but with the 12-month timetable for end-of-lifing perpetual licenses, the company has time to address concerns that come up from customers.

What should Autodesk take into account in order to truly partner with the industry?

The move to subscription to pay for software is something that a vast majority of facilities and even users accept. That is not problem. But what exactly are the issues that we are looking for Autodesk to solve before cutting the cord on traditional licensing methods?

We touched base with numerous facility tech managers, including Jean-Francois Panisset, CTO of Psyop, and Saker Klippsten, CTO of Zoic Studios, for their view on what Autodesk needs to do in order to avoid the same pitfalls that have hit Adobe’s Creative Cloud in the mind of CTOs. Our takeaway follows…

Floating licenses aren’t broken

First and foremost, from a facility standpoint, there’s absolutely nothing broken with floating licenses. It is an efficient way to provide permissions to run software as well as analyze the use of the software. Any new management system implemented should take the benefits of a floating license server such as RLM into consideration.

Anything user-based is problematic

Facility roles change over time and employees and freelancers come and go. The idea that an individual user and the tasks they perform for a company are consistent over the long term is a fallacy. And since that’s the core essence of user-based licensing, it’s a real problem for the post-production industry.

Sensible user/license management is required

As a trailblazer, Adobe is a good test case for what is wrong about user-based licensing at facilities. Due to the above-mentioned realities about artists at facilities, system administrators have to spend an inordinate amount of time developing convoluted workflows to deal with this issue. Generally, they create a number of “generic” facility users, such as fxguide_user01, fxguide_user02, fxguide_user03, etc. They then have users log in and out as directed by producers and scheduling as the job requires. However, errors can often happen and it’s a drain on resources to manage. It also requires systems to be connected to the internet, which is also a problem (see below).

One solution would be for the manufacturers to have support for something like Active Directory. This would allow a facility to bridge its users with the software package users, creating a system that’s easier to manage. They would still have to create custom hooks to get the job done, but it would be preferable to the current Adobe Creative Cloud for Teams process.

Offline licensing is critical

Software needs to be able to be run and licensed on machines that aren’t directly connected to the internet. This is especially an issue when working on features, as MPAA guidelines require isolation of the creative workstations from the internet at large. A facility such as Zoic is visited several times a year by companies to ensure that they are meeting the security guidelines of the studio. Thus, Adobe’s requirement of having the software “phone home” has been incredibly problematic for facilities. The same holds true for Avid, as well.

The requirements are so stringent that every 30 days Klippsten had to actually physically move each machine to a different location in the facility, plug it into a switch, and let it phone home to Adobe. Once this 30-day clock is reset, he can then take the machine back to artist location. The computer needs to be isolated both physically and network-wise.

Adobe does have limited support for a proxy server which allows authentication through a local machine, but this is only available for the Creative Cloud Desktop application and not the individual creative applications such as After Effects or Premiere. Thus, updates can work via proxy, but not permissions to run a particular software package.

The bottom line is that Klippsten feels that the software companies aren’t really thinking about the position in which facilities are being put from a security perspective. “From the studios, we get the pressure that we have to lock everything down,” says Klippsten, “but yet the people who are supposedly partners with us in this industry completely ignore that fact.”

Robust reporting tools and analytics are required

Another one of the benefits of using a floating license server (something like RLM) is that it is extremely easy to track use of a particular piece of software. It’s incredibly valuable for facilities to determine whether or not they need more (or less) licenses for an application.

“We look at licensing from the analytics side,” says Klippsten. “How many licenses are being used? How often are they being used? It dictates how we develop as well…do we need to spend more time developing workflows for Nuke or Maya because more people are using that application. It also helps us forecast our needs for next quarter or even next season.”

It comes down to manufacturers helping legitimate users of the application by building more tools and reporting, instead of figuring out new ways to fight privacy…which will likely be inevitable anyway.

A “facility” or “enterprise” can be as few as 10 or 15 seats

Panisset, Klippsten, and others agree that managing an isolated user-based subscription mechanism such as Adobe CC becomes problematic at 10 or 15 seats. The amount of time spent working around its limitations gets in the way of other work that needs to be done at a facility.

Zoic recently signed up to Adobe’s “Enterprise” plan, which we’ve heard has been priced more aggressively than it has in the past. The enterprise plan effectively allows a company to license the software much in the same way it used to be licensed. So now, the team at Zoic doesn’t need to worry about the network connection we mentioned above. The issue is that the plan is generally marketed towards companies with at least 150 seats, so there’s a huge gap between that number and the 10 seats at which management becomes problematic.

Software suites generally don’t work for facilities

The reality with suites is that they should be targeted at individual users rather than at facilities. While the package does contain multiple software packages, licensing requires that they still only be used by one individual user. So when purchasing the Entertainment Creation Suite Ultimate while one might think they get one license each of Maya, Max, Mudbox, and MotionBuilder — they may still effectively only be used by a single user. For a facility, they would much rather pay a premium and have floating licenses for each of those packages.

While this article is largely centered around Autodesk, this is an incredibly common complaint against the Adobe Creative Cloud. Artists at a facility don’t need access to all of the applications in the suite. You’d be hard pressed to find artists or editors who need access to Dreamweaver, Muse, InDesign, and others. They exist, but they are few and far between and and it would be more efficient for facilities to distribute access in a different way.

If the problems aren’t solved, facilities will look elsewhere for software

When one examines all these issues together, it is clear how a user-based subscription model is problematic for facilities in our industry. In fact, one of the system admins went so far as to say that they would migrate away from using Photoshop if an app like The Foundry’s Mari became more full featured. They would gladly pay a higher price for the software, since the RLM licensing solved so many of the issues they spend time working around.

Even seemingly benign issues such as launch times and dealing with logins can have a big impact on the bottom line for a facility. For a facility such as Zoic with a large number of artists, the amount of savings can be significant. According to Klippsten, shaving a minute off a repetitive task can save hundreds of thousands of dollars over an 8 month period. So they look everywhere to find areas where they save time instead of wasting it.

The next 12 months

This transition is not simply about the post industry. The change in licensing impacts the entire Autodesk product line and many of the issues discussed here impact many other industries.  Other software companies have said they’ll make things right for facilities, but in the end haven’t actually followed through. The team at Autodesk seems serious about addressing these important issues and we hope they do. But more importantly, it’s the system administrators and CTOs that hope they do.