The article was written by Motek Moyen Research Seeking Alpha’s #1 Writer on Long Ideas and #2 in Technology – Senior Analyst at I Know First.



Autodesk Stock Forecast

Summary:

After buying Indeeo’s vector illustration software iDraw, Autodesk renamed it to Graphic last year.

Unfortunately, Autodesk has failed to update the Mac-only iDraw/Graphic software.

It seems to me that Autodesk is losing interest in competing with Adobe’s $19.99/month Illustrator CC vector drawing software.

I hope that Autodesk will reinvigorate its strategy to compete better with Adobe’s Creative Cloud.

Autodesk needs to compete more with Creative Cloud because nobody else is big enough to challenge Adobe.

I wrote about how Autodesk (ADSK) is trying to challenge Adobe’s (ADBE) almost-monopoly grip on print/web design software. Adobe has purchased photo-editing and vector illustration software to try challenging Adobe’s Photoshop and Illustrator CC software.

Autodesk bought French company Alias in 2006 to get its SketchBook Pro software. SketchBook Pro is a good vector drawing alternative to Adobe’s $19.99/month Illustrator CC program. Buying Alias also allowed Autodesk to try and challenge the motion graphics software Adobe After Effects with Maya. Autodesk also sells Flare as an alternative compositing tool for video editing professionals.

Adobe’s $9.99/month Photoshop CC is now also challenged by Autodesk’s $1.99/month Pixlr Pro photo editing software. Autodesk bought Pixlr in 2011. I also wrote about Autodesk’s purchase of Indeeo last year. Autodesk renamed Indeeo’s Mac-only iDraw to Graphic. It’s a $29.99 one-time-payment software that aims to compete with Illustrator CC.

Unfortunately, Autodesk’s efforts to challenge Adobe’s Creative Cloud software products seems to be half-hearted. Autodesk’s stock price is being outperformed by ADBE. Adobe’s almost-monopoly grip on print/web/motion graphics design software remains unchallenged. This is sad because Autodesk has the assets, resources, and global presence to really challenge Creative Cloud.

Autodesk Is Not Properly Developing Its Acquired Software Assets

The simple explanation why Autodesk is failing to compete with Adobe is that it doesn’t seem to know how to properly leverage the software products it acquired. Adobe is keen on updating its Creative Cloud software products. On the other hand, Autodesk seems content buying a software and then forgetting to update it.

One example of this bad habit of Autodesk is its treatment of Indeeo’s Mac-only iDraw software. After renaming it to Graphic last October, Autodesk failed to issue new updates for it. Yes, Graphic is a cheap $29.99 alternative to Illustrator CC. However, its lack of new updates and bug fixes makes it unattractive even for amateur graphic designers.

(Source: Autodesk)

Impressing the professional designer means Autodesk should never trying selling him/her a software that lacks regular updates/improvements. Furthermore, Autodesk’s CAD and 3D modeling software like AutoCAD and Maya are very popular on the Windows platform. However, Autodesk has yet to issue a Windows version of Graphic. Improving its chances of challenging Adobe requires Autodesk to also offer its vector illustration program outside the Mac platform. Adobe’s Creative Cloud is not Mac-only.

The tardiness of Autodesk in porting Graphic to the Windows platform is a sign that the current management is not yet fit to challenge Adobe. Serif, the maker of the very popular Mac-only $49.99 Affinity Designer vector illustration program is already beta-testing the Windows version. Affinity was released on the Mac only last July 2015.

My point is that Autodesk knows how to identify and buy good software products that could rival Creative Cloud products. Unfortunately, Autodesk is clumsy when it comes to actually marketing them.

Competing With Adobe Requires the Support of The Creative Industry

Creative professionals and the creative industry itself will continue to ignore Autodesk’s alternative software products because of their lack of regular updates. Competing with Adobe’s Creative Cloud requires Autodesk to match Adobe’s consistency in updating its software with new features and improved performance.

The creative industry is also not Mac-only. There are millions of designers and graphic artists who use Windows platform. Graphic’s future growth require it to go outside its Mac-only limitation. I cannot expect professional designers to seriously use Graphic, Pixlr Pro, and SketchBook Pro on their daily tasks if Autodesk itself is being a laggard in updating/improving them.

Without the backing of the professional creative industry, Autodesk cannot expect to seriously compete with Adobe Creative Cloud. It only takes regular software updates to make Graphic and Pixlr Pro to eventually win the respect of a professional designer. Autodesk is failing in this regard and it must be addressed.

Conclusion

Due to the continuing failure of Autodesk to properly compete with Creative Cloud, Adobe is posting record quarterly revenue. The monthly subscribers of Adobe Creative Cloud is now more than 7 million. Autodesk’s management should try harder on how it could steal some of that 7 million subscribers of Adobe.

Autodesk has long-term economic benefit if it can compete better with Adobe. The multi-billion web/mobile design industry needs an alternative software suite to Creative Cloud. Autodesk’s future growth prospect is better if it goes outside its heavy reliance on its AutoCAD and 3D modeling software.

I am still endorsing ADSK as a Buy for long-term investors. It is a leader in CAD/CAM software that is also trying to make inroads on Adobe’s turf. The long-term 1-year algorithmic forecast for ADSK is also screaming a Buy signal. Disclosure, I’m long ADBE.

