Luís Miguel Barros • Associate Director, Architect
2020 was a peculiar year in many aspects, as we all know and experience.
One of them was the original 5-page open letter that in July a group of 25 British architecture firms sent to Autodesk, more precisely to its CEO Andrew Anagnost.
Personally, I don’t care much for “open letters”, they always remind me of those “Chihuahua” who bark a lot and don’t bite at all and, frankly, the world was having bigger worries at that time.
However, I followed closely, not only because I became responsible for the implementation of REVIT in S+A, but also because I manage our 80 licenses and their 150,000€ annual cost (Autodesk only… not counting Microsoft, Sketchup, Adobe, Enscape, V-Ray, Rhino, Google, etc).
The developments derived from this letter are what I propose to share below.
Among the best-known signatories of the Open Letter were Zaha Hadid Architects, Grimshaw, Rogers Stirk Harbour + Partners, Wilkinson Eyre Architects, etc.
The letter basically condemned Autodesk for the constant increase in the costs of its BIM software, REVIT, whose acquisition format changed from perpetual license to individual subscription, making licensing cost grow 70% in 5 years. At the same time, it pointed out that the development of this software remained stagnated in that period, without responding to the most basic needs of its users.
Very clearly, it pointed out to Autodesk a direct responsibility on the inefficiency that was being revealed in its businesses, due to the inability of REVIT to keep up with the new needs in the field of Architecture and, due to this, it was becoming a factor of decreased productivity.
The letter concludes by asking Autodesk to provide a “customer-centric, non-adversarial, innovative, progressive and delivery” action plan including, but not limited, to a commitment to cost stability; a commitment to research and development tailored to the unique needs of the Architecture and Design community; a willingness to establish a cultural partnership with its customers based on “trust, empathy and respect” and, above all, “a vision, roadmap and investment strategy that targets adding value and performance for design-based organizations that prioritizes the replacement of Revit from the ground up to reflect the functionality needed for a 21st-century digital industry.”
The first response
A few days after the publication of the open letter, Autodesk’s Senior Vice President, Amy Bunszel, replied. Bunszel is an Autodesk executive with more than 20 years of experience, a “Product” person whose credibility to talk about “functionality” issues is unassailable. But she has no responsibility in the licensing policy implemented in recent years, namely the much criticized “subscription” policy. And it has far less to do with Autodesk’s belligerent and aggressive tactics regarding software audits and how they are used to increase its sales. These are executive decisions of a CEO – Andrew Anagnost – who has to show results to the shareholders of a company that has seen its stock market value grow by 62% in this year of pandemic, much at the expense of an aggressive sales and acquisition strategy, leaving its “Product” without any development.
This is exactly where things started to get complicated for Autodesk.
Autodesk predictably responded in “PR” mode and tried to minimize the damage. Bunszel said: “Although we do not agree with everything in the letter, we are committed to listen”. This comment only served to fuel the fire, and “Social Media” took action. For the vast majority, it was not about cost and performance. Instead, it was about Autodesk’s empty promises to listen to customers when history has repeatedly shown that this is not their modus operandi.
Once again, the typical Autodesk tone emerged: the message was more about how this all made sense to Autodesk and to “some” clients, not about the specific aspects pointed out in the letter: architecture functionality, productivity VS cost, suitability for architectural design offices, etc. After this response, the signatures on the open letter increased to hundreds of offices all over the world.
The second response
With anger increasing online, Autodesk CEO Andrew Anagnost finally responded, about three weeks later. In a “post” he acknowledged i) that the Revit Architecture feature did not progress as quickly as it should, ii) that Autodesk failed to deliver a new generation platform for AEC, iii) that its customers had to cope with multiple changes in the Autodesk business model; but then contested many other points of the original open letter, i) denies that Autodesk is involved in aggressive and cold commercial practices, ii) denies that subscription costs for Autodesk’s software are responsible for flattening the profits of architectural firms, iii) denies that subscription costs are much higher than the old perpetual license model. This was an answer with equal parts of apology and rejection.
The apology is classic corporate talk: buzzwords about product development, customer attention statements, promises to do better. In contrast, rejection is much more exciting. Much more exciting is the inclusion of the rather sarcastic allegation that for the original seventeen signatories of the open letter, Revit’s annual licensing fees represented only 0.63% of its 2019 revenues…
Now, with a subscription to Revit costing 2950 euros, this would mean that, for example, ZHA (Zaha Hadid Architects), with its 600 employees, of whom 500 will be Revit users, would have an annual subscription cost of 1.47 million euros and, by Anagnost accounts, revenues of 234 million euros.
It turns out that in 2019 ZHA’s revenues, considered the best ever, amounted to 62 million euros… so its subscription costs for Autodesk would actually be 2.4% of revenues.
By the same accounts, S+A should have had revenues of 24 million euros… Someone has been putting the comma in the wrong place.
I would like to point out that, although I do not agree with Autodesk, I am not necessarily in favor of ZHA and the other members of the letter. Yes, I am equally an architect, but it is notoriously hypocritical of Patrick Schumacher to complain about the cost of software and at the same time defend unpaid internships in architecture, “unpaid or low paid internships have nothing to do with exploitation…they are mutually agreed exchanges“.
Very few will recall the controversy that came to public attention in March 2019 over the outrageous conditions of unpaid interns at Junya Ishigami’s Japanese architecture office (designer of the Serpentine Pavilion that year) – weeks of 6 days, 13 hours a day and interns having to bring their own computers and software – which triggered the discovery that this practice had been used extensively everywhere, especially in so-called “starchitects” for many years. There is a fantastic and well-documented article here by an Australian architect who, perhaps even for that fact, has a clarity that only distance can give.
By making REVIT a SaaS (Software-as-a-Service) whose only way to use it is to have an individual account at Autodesk, mobilizing a “police force” of invasive, aggressive and well-documented audits, articulated with government entities and hidden in the “small letters” of subscription contracts that nobody reads, its abusive use has been almost totally eradicated.
Even considering that negotiating with Autodesk 500 subscriptions is not the same as negotiating 80, I doubt that these competitors will pay for each one the same as us, but what I know for sure is that when the model was perpetual licenses, the quantity of licenses could bring discounts of 70% or more on purchases.
Although the “subscription per user” model undoubtedly makes the costs higher, the fact is that it levels the value by all players in the market – which may have provoked this stronger reaction from our peers. If they benefit from the hundreds of trainees who want to resume and are willing to work without due payment, they are now forced to pay for the license to use the same software.
None of this, however, invalidates a harsh reality: Autodesk’s software costs more per employee and per year than all the other software combined (Microsoft, Sketchup, Adobe, Enscape, V-Ray, Rhino, Google, etc.). It is of the most elementary justice that we demand quality, functionality, innovation and it is intolerable that this software is part of the problems and useless in finding solutions.
The “value” of Architecture
For years linked to the design offices, surely Autodesk, which is an American quoted corporation, saw for a long time that its growth potential was in the rest of the construction industry and not in Architecture and Engineering… Holder of a real monopoly, it realized the obvious: the value chain in design and construction (AEC – Architecture, Engineering, Construction) was all in “Construction”, being understood as everything that follows the project: consulting, supervision, construction, management, real estate development, sales…
After all, the designers all together “value” a mere 6 to 8% of the overall cost of building a development. A real estate company charges 5% of the sales value of a space designed by us… A simple, conservative exercise of putting the sales values at 2.5 X the construction values, shows well where the weight in this value chain is. And Autodesk has spent the last 5 years positioning itself to sell to Construction Owners, Real Estate Developers, Real Estate Consultants… and REVIT has no interest for them.
However, by neglecting your “product” for more and more “sales” you are falling into a well-known trap. It is worth reviewing this passage from a 1995 interview with Steve Jobs about the relationship between product and marketing in a monopoly company…
At S+A, as an Architecture Company that values innovation and quality, we must be careful not to become hostages of a tool that becomes a by-product whose future incapacities may undermine our desire to innovate and permanently increase quality. And much less resign ourselves to this secondary role in a market where only the vision, concept and creative synthesis of an architect can give body and value to something that is then explored. It depends on us to give less “shots in the foot” …