Autodesk, Inc. History

Address:

2320 Marinship Way
Sausalito, California 94965
U.S.A.

Telephone: (415) 332-2344
Fax: (415) 331-8093

Public Company
Incorporated: 1982
Employees: 1,565
Sales: $353.2 million
Stock Exchanges: NASDAQ
SICS: 7372 Prepackaged Software

Company History:

Autodesk, Inc. is the largest design automation software company in the world, with a variety of software products available in more than 85 countries and in 18 languages. Autodesk has holdings in Switzerland, Austria, Spain, Germany, England, Japan, Australia, and the Czech Republic. Its headquarters are located in Sausalito, California, a few miles north of San Francisco.

Autodesk was founded in 1982 by computer programmer and entrepreneur John Walker, whom PC Week columnist Jesse Berst described as 'the most brilliant and the most bizarre person I've ever met.' Walker acquired the software for a computer-aided design program known as AutoCAD from inventor Michael Riddle, in exchange for $10 million in royalties. The following year, his new company, Autodesk, introduced the AutoCAD program to the public. As the market for personal computers and software escalated, Autodesk experienced rapid success. During this time, Autodesk established a unique policy of eschewing conventional management personnel, experienced in business strategies and financial planning, in favor of a management team consisting of computer programmers like Walker.

In 1985, Walker took Autodesk public, and, the following year, he left his position in the company's management in order to pursue his interest in programming. As a result, Walker developed an AutoCAD supplement designed specifically for the construction industry. The supplement, marketed through Autodesk, allowed engineers to generate price quotes and construction schedules from information available in their designs. By this time, 40,000 AutoCAD packages had been shipped for sale.

In the summer of 1987, Autodesk initiated a second issuing of stock, offering 2.5 million shares at $24.00 per share. The capital generated from this offering enabled the company to eliminate some of its debts. In 1988, Autodesk had assets of over $100 million in cash and securities, while revenues increased 40 percent over the previous year. By 1989, Autodesk was enjoying a 60 percent share of the market for personal computer automated design software, with sales worth $117 million.

By the early 1990s, growth at Autodesk, and the company's dependence on AutoCAD, necessitated a restructuring of the company's operations. Five separate support units were created, each overseeing one of the company's five main product lines, all of which were designed for use with AutoCAD. Moreover, the company purchased a 20 percent equity interest in Ithaca Software, producer of the Hoops Graphics System. Hoops Graphics proved valuable when integrated with AutoCAD, resulting in a more user-friendly product, and Autodesk would acquire Ithaca Software in its entirety in August 1993.

In April 1992, Carol A. Bartz was named CEO of Autodesk. Bartz, who had a bachelor's degree in computer science from the University of Wisconsin and had served as a vice-president at Sun Microsystems, became one of only two women to head a major U.S. company in the high technology industry. In addition to her duties at Autodesk, Bartz was a boardmember of Cadence Design Systems, Inc. and Airtouch Communications, Inc., a company owned by Pacific Telesis.

Upon her appointment at Autodesk, Bartz developed three primary goals for the company: building Autodesk into a $1 billion company by 1999, decreasing the company's reliance on AutoCAD as the primary source of revenue, and moving the company into computer-aided manufacturing in addition to design. Bartz also reorganized the company, imposing a more traditional management structure, building a new executive team, and working with software engineers to further tailor AutoCAD to the needs of the public.

In order to sharpen its focus on design automation, Autodesk divested its interests in AMIX, an electronic shopping network, and Xanadu, a database software company, while acquiring Micro Engineering Solutions, a firm concerned with computer modeling software. In 1993, Autodesk purchased the net assets of Woodbourne, Inc., an acquisition which brought Wood-bourne's solid-modeling technology to Autodesk.

That year, a lien was placed on $5 million of Autodesk's fourth quarter profits, as a result of a class action suit filed by stockholders. The plaintiffs had purchased stock in the company between May 6, 1991 and January 30, 1992, and, when Autodesk experienced a 35 percent drop in earnings in the second quarter of 1992, they filed the lawsuit. Although Autodesk maintained that the suit was without merit, the company paid a settlement in an attempt to curb litigation costs. In fiscal 1994, Autodesk expended over $70 million for the repurchase of common stock in order to avoid dilution caused by employee stock plans.

John Walker officially severed his ties with Autodesk in 1994, in favor of engineering special projects in Switzerland. By that time, Autodesk had shipped one million software packages worldwide, and AutoCAD remained the primary source of company revenue. Sales of AutoCAD and AutoCAD updates accounted for 85 percent of Autodesk's revenues in 1994, while net revenues reached $405.6 million, with foreign sales accounting for 58 percent of those revenues.

Nevertheless, Autodesk had developed several other product lines, including: Generic CADD; AutoCAD LT, a CAD program compatible with Windows; AutoSketch, a two-dimensional drafting program available with either DOS or Windows compatibility; AutoCAD Designer, a program enabling the user to perform solid-model drafting; Advanced Modeling Extension 2.1, another solid-modeling program, which interfaced with AutoCAD; Generic CADD 6.1, a design and drafting program compatible with AutoCAD files; and AutoCAD Data Extension, a program allowing the user to work with multiple drawings concurrently. The company also developed AutoSurf, a program based on AutoCAD Release 12, for two-and three-dimensional design; Autodesk Manufacturingexpert, another program incorporating AutoCAD Release 12; Aemulus and Aemulusmf, allowing interchange between AutoCAD and CADAM files; AutoCAD IGES Translator 5.1, a CAD translation program; Home Series, a program for use in home design drafting; 3D Studio, a program with a variety of modeling and animation applications; and Autovision, a program interactive with AutoCAD Release 12 which enabled users to produce photorealistic still renderings. A pioneer in the exploration of the potential of virtual reality, Autodesk also offered Animator Pro, 3-D Studio, and a Cyperspace Developer Kit.

Autodesk's products had applications in a wide variety of fields, including architecture, engineering, construction, geographic information systems, mechanical design, and videography. Among Autodesk's major clients were Chevron, Kohler, Sony Pictures, and Japan's Nippon Telegraph and Telephone Corporation. Chevron used a combined package of AutoCAD Release 12, ADE software, and an Autodesk Geological Information System program to monitor its assets and leases on land and offshore; Kohler used AutoCAD, AutoSurf, and AutoMill to design plumbing fixtures such as bathtubs, toilets, and sinks; and Sony Pictures employed 3D Studio in plotting camera angles prior to actual filming. In addition, Autodesk earned a $550 million contract to provide CAD 2 to the Naval Facilities Engineering Command.

Autodesk continued to cooperate with other software purvey-ors, forming alliances in which the companies involved produced programs while maintaining their autonomy. In 1993, Autodesk developed a means of using AutoCAD Release 12 on an IBM OS/2 2.0 operating system, and, the following year, Autodesk announced a cooperative venture with Xaos Tools, Inc., intended to produce image-processing software compatible with Autodesk's 3D Studio Release 3. Autodesk also announced the release of AutoSketch 2 for Microsoft's Windows. Other joint ventures included an agreement with Microsoft to develop Microsoft-compatible CAD programs for integration into Microsoft Office; the formation of a consulting agreement with UGC Consulting, a firm knowledgeable about the Geological Information Systems market; and an agreement with Silicon Graphics to jointly develop and release a program integrating a rendering feature of Autodesk's 3D Studio Release 3 into a Silicon Graphics program as well as to develop a Silicon Graphics-compatible edition of Autodesk's AutoVision.

In 1994, Autodesk operated approximately 750 Training Centers worldwide for the purpose of educating users in the applications of AutoCAD and other Autodesk software. Autodesk depended upon a network of dealers, distributors, and direct sales to disseminate its products, and devised a system of cooperation with third party software developers. This system, called AutoCAD Development system, or ADS, was devised in 1990 and was structured to encourage independent software developers to create add-on programs for Autodesk products and new applications for Autodesk's technologies. Over 2,000 independent developers worked to create specialized applications using Autodesk programs in 1994.

In the mid-1990s, Autodesk owned no real property; all facilities for management, product development, marketing, and production activities throughout the United States, Europe, and Asia were leased, including the facilities in Neufchatel, Switzerland, opened in 1993 at an expense of $1.4 million, in order to concentrate Autodesk's European production. Although Autodesk owned most of the equipment used in its business, the company's intellectual property and its network of programming and business talent were regarded as its chief assets.

Autodesk, like many other software companies, was challenged by the effects of software piracy in the early 1990s. In order to combat this practice, Autodesk joined forces with other high technology firms to form several regional organizations, including the Canadian Alliance Against Software Theft (CAAST) and the Business Software Alliance (BSA). The company has prevailed in litigation to protect its copyrights, including a 1994 suit against Cadisys Corporation, the result of which was a $100,000 settlement in Autodesk's favor on May 23, 1994.

As technology in the computer software industry changed, Autodesk remained flexible and willing to explore new technological and business possibilities, hoping to maintain its rank among the leading software companies. Autodesk's expansion into multimedia appeared to be keeping pace with, and even anticipating, market needs for innovations in these fields.

Principal Subsidiaries: Autodesk Retail Products, Inc.; Micro Engineering Solutions, Inc.

Autodesk, Inc. History

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