CRN Interview: Carol Bartz, Autodesk

Autodesk is celebrating its 20th anniversary this year. Chairman and CEO Carol Bartz discussed the design and digital media software vendor's product strategy, evolving sales model and efforts in location-based technology and Web services in an interview with CRN Editor/Strategy Heather Clancy.

CRN: Could you discuss your mission to make sure that 'Autodesk' doesn't just equal 'AutoCAD'?

BARTZ: When I came [to Autodesk 10 years ago, we were predominantly, i.e. 95 percent, AutoCAD. At the time, the board was saying, 'We're a one-product company. We've got to get beyond one product.' But, put differently, our customers had taken AutoCAD into areas and markets that clearly were represented by different groups of engineers, disciplines, architects and so forth. And for us to continue to serve these customers, we had to make AutoCAD more specific, or diversify for them. So that was the mission 10 years ago. If you look at the company now, we're 30 percent AutoCAD, and the rest is other products. And it's predominantly products in the building design industry, the manufacturing industry and the GIS [geographic information systems area, which tends to be the management of spatial information, telcos, utilities, cities, counties, states, etc. Of course, about 17 percent to 20 percent of our business is in entertainment media--[notably in moving media, whether it's the Web, broadcast or feature films for special effects, editing, composition and that sort of thing. The way I like to say it is, if you look around you, if God didn't make it, one of my customers probably did. It's really about creating the world, and that's both the physical world--the office buildings we're sitting in, the roads we drove in on--and the entertainment world that we're looking at. More and more of the interesting content you're seeing on your TV, game console or whatever is created by an Autodesk customer.

So that's how it all ties together. For the past 20 years, we've focused on helping customers create that design information, whether it's digital media or design information that would go into a blueprint, a schematic or a 3-D model. I'd say the next 10 years is about not only how they continue to create it, but also how they actually leverage the information throughout the length [of time of whatever it is they are creating. The very worst thing that can happen now is that after all this very detailed geometry and precision, most of these designs automatically go to paper, and the rest of the process--sending information out to suppliers so they can bid, finding out where a pipeline is underground so you can dig, understanding what's in the transformer in the phone pole--that's also on paper. So where all of this information could be kept--whether it's on a wireless handheld or on a hosted service pushed down to the construction site--is where it's really going to make a big difference. The beauty of our market is people are going to build things forever. But the way to actually get the job done in the future will really change.

CRN: Is that the strategy behind Autodesk's location-based services effort?

BARTZ: Location-based services is a little different. That's actually using our experience in software in the GIS world and taking it to the telcos and the car companies so they can add location as a premium service to their offerings. So that's a way of leveraging experience in software design and taking it into an entirely different market.

CRN: Can you describe how it's deployed?

BARTZ: It's actually middleware, the processing. If you have a [cell phone with a smart chip on it that says, 'I'm at Broadway and Main, and my next appointment is uptown. I want to find out directions to get there,' or 'I want to know when my favorite Italian restaurant is open,' it literally knows where you are. Our software does the processing to give you the directions, to load all the content databases, to give you the restaurant menu for the restaurant, etc. So it's an aggregator of content, it's the routing software and it has the base maps in it. It's the realtime processing to send you back the information.

CRN: What is your hope for that business?

BARTZ: Well, it's too early to tell. We're really giving the business three years to see if there's a market or if we have the right technology. But it is pretty clear to us that as wireless companies are trying to add more data services, voice is getting pretty free. I mean, nothing is really free, but think of how many free minutes you get these days and so forth. They're going to want people like us to charge for other services, whether it's SMS--[i.e. short messages--or whether it's friend-finders, such as 'Gee, I'm here. I wonder if any of my registered buddies are in the area so we can get a drink?' It's all kinds of things.

CRN: What role will Web services or the ASP model play in Autodesk's future?

BARTZ: Well, to really make this idea of leveraging design information work, the Internet has to be in the middle of that. If you're going to push information to your supplier in Taiwan to get a bid on some parts you're thinking of engineering, the way to do that is to push those heavy drawings over the Internet. There are obviously applications involved in that and different technologies in security, compression, etc.

But let's consider application hosting. I think it's pretty clear that in the construction market, having a hosted service will probably be the way it works. Because when you come together to make the building, that's a one-time event for that group of people. You have a unique owner, contractor, subcontractors, etc. When that building is done in two years, they all split and are off on different jobs. There's no IS department that people are going to put together just to run that project. So that as a hosted service looks pretty compelling, and that's what we're seeing in Buzzsaw [an Autodesk online collaboration service for the building industry. In the manufacturing space, I think [services will be both hosted and installed. It's fascinating, because we thought most manufacturing companies would want to install. It turns out that when you sit down with their CIOs, they're saying, 'Wait a minute, why would I want to run something 24x7?' If you look at our product Streamline [an Autodesk online collaboration service for manufacturing, it's the ability to move engineering data throughout the enterprise, to your external supply chain, out to customers and so forth. You can either control that behind your firewall, and you work out how you get through the firewall and out to the customers, or you can use it as a hosted service.

CRN: What has to happen on the bandwidth side for Autodesk to see more product penetration?

BARTZ: Just as our customers can't get enough performance, they can't get enough bandwidth. Let's start with media, for instance. The idea of on-demand streaming media--the idea of having really sophisticated moving content--will only make our available market bigger for the whole Discreet side of the business. On the engineering side of the business, a fairly moderate-sized mechanical assembly [diagram can easily be over 100 megabytes. And when I say moderate-sized, we're talking really moderate-sized. Our customers push a lot of data around, and I think that's mainly the reason why it's been analog. If you think of most companies, you've got a back office with SAP and Oracle Financials. You've got PeopleSoft, Siebel and all of that stuff. But no one has automated how engineering information moves around, because it's complex, heavy data. So bandwidth is very important.

CRN: What's your vision in terms of Autodesk's sales model, and how you balance the direct-sales activities with the channel?

BARTZ: We have a partnership with a wonderful channel, and I actually think we have one of the best histories and the best channels in high-tech. So I feel very proud about it. When you are in times of technological change, as we are now with this idea of leveraging design information more into collaboration, companies want to hear from the vendor. It really is about going in there and doing the evangelism, sharing how you see the future. It isn't about, 'Here are three new features in Inventor [an Autodesk's 3-D design product or AutoCAD.' Our dealers are very well-equipped to do that. But when you're saying there's a new way to think about doing these things, it is best to create a market from the vendor. Everyone forgets, by the way, that for the first two years Autodesk was a direct company. Once we really understood how the product would work and how to sell it and started getting a little pull in the marketplace, it was ideal for a dealer channel.

We're in this stage now where it's very clear to us that our dealer partners are important and will be forever. And I'm using the word 'forever' because I mean it. But the Fortune or the Global 500 companies really need to understand the [evangelism strategy and that we're best-suited to do that. By the way, in doing that, you're teaching the channel and bringing the channel with you into these accounts. In many cases, the channel still is doing the installing and the training and that sort of thing. But it's hard to put that 'evangelize' message out to our dealers and say, 'OK, good luck. Go with it. But you might not get a sale for six months.' I mean that's not how they work.

CRN: Does Autodesk have specific rules of engagement for channel partners?

BARTZ: Absolutely. The rules of engagement are laid with the channel all over the world, because we value the channel and know that they have to understand. By the way, understanding means that there always is change. Anytime a vendor or channel says the way it is is the way it will always be, it doesn't work. That's not how business is.

CRN: What's Autodesk's position on consulting services?

BARTZ: We just hired an executive vice president of consulting services, Tom Vadnais. We already have a few hundred employees in this area, and they were mainly around consulting in our GIS design server business but are starting to reach out to the manufacturing part of the business as well as around Buzzsaw [building industry clients. Our view on [services is that customers are asking us to help them become more productive, to help them get their initial data structures right when you talk about Streamline and Buzzsaw. So we see more of the 'product productivity' sort of consulting as opposed to the turnkey EDS [type where we're going to kind of own it and run it for you.

CRN: What opportunity do you see in the government market?

BARTZ: Some of the first things that we're seeing are some opportunities around homeland security. For instance, there's a government mandate that by the end of 2003 or 2004, they need to understand the layouts of all the government buildings. One of the issues around Sept. 11 was that there wasn't clarity about who was on all those floors and even what companies were on some of those floors. We're also working with the state of Florida and counties in Florida to provide online layouts of schools, so that if you have [an emergency and get a cell phone call that a teacher is trapped in the chemistry lab, you know where the lab is. So there are a lot of issues about how to manage all of the assets that are already there.

CRN: What's Autodesk's position with the SMB arena?

BARTZ: That's been our natural market. We're actually one of the few software companies other than Microsoft that comfortably goes from the single-person architect firm right on up through the top of the Fortune 500 because design and architecture encompass that broad range. In fact, I would say the reason we had such good performance last year and grew the top line and bottom line in double digits--and you can't find many high-tech companies that did that--is because we were so effective in servicing midsize businesses.